Fannie Mae and Freddie Mac this week both celebrated large second-quarter profits that easily exceeded their installment payments to the U.S. Treasury as the price of government conservatorship, but buried in their earnings report was the hard truth lenders know too well: contentious buyback demands showed no sign of letting up. Our expectation [is] that the amount of our outstanding repurchase requests to seller/servicers will remain high and that we may be unable to recover on all outstanding loan repurchase obligations resulting from seller/servicers breaches of contractual obligations, Fannie said. As of the end of June, the two government-sponsored enterprises had...[Includes one data chart]
Hardball conditions imposed by Freddie Mac in order to permit lenders to continue selling loans insured by Mortgage Guaranty Insurance Corp., over the objections of state regulators, has cast a cloud over MGICs already uncertain prospects. Fannie Mae has approved a new MGIC insurance entity that also has the backing of the insurance companys home state regulator, the Office of the Commissioner of Wisconsin. But MGIC warned investors last week that Freddies Aug. 1 approval of the new unit is conditional and could be withdrawn at any time and ends Dec. 31, 2012. Freddie says it can and will pull...
Encouraged by the performance so far of the recently revised Home Affordable Refinance Program, the Federal Housing Finance Authority announced this week it is working to expand the pool of borrowers eligible to refinance through HARP by aligning Freddie Mac policies with Fannie Maes. The agency announced the additional tweaks to HARP at the same time it said it would not sanction a Treasury Department-endorsed effort to allow the two government-sponsored enterprises to write down mortgage principal as part of loan modifications. The FHFA said that Freddie will soon issue...
The Federal Housing Finance Agency this week said that it will announce new gradual adjustments in MBS guarantee fees charged by Fannie Mae and Freddie Mac. The adjustments will take effect late in the year, said the FHFA, which plans to reveal the changes by the end of this month. MBS guarantee fees rose...
A much-anticipated Senate vote on the nomination of Carol Galante as FHA commissioner and assistant secretary of housing with the Department of Housing and Urban Development failed to materialize this week, reportedly due to the continuing Republican efforts to block her appointment. Word spread that a vote would take place after Senate Majority Leader Harry Reid, D-NV, and Senate Minority Leader Mitch McConnell, R-KY, last week tentatively agreed to vote on the nomination sometime this week. But that has not happened. Both positions have been vacant since ...
Despite intense lobbying and political pressure from the Obama administration and Congressional Democrats, the Federal Housing Finance Agency announced this week it will hold fast to its original conclusion and not agree to Treasury Department requests to allow Fannie Mae and Freddie Mac to offer principal forgiveness modifications. Despite the incentives offered by Treasury to pay the government-sponsored enterprises to write down principal under the Home Affordable Modification Program using Troubled Asset Relief Program funds, FHFA Acting Director Edward DeMarco concluded the benefits of implementing HAMPs Principal Reduction Alternative did not outweigh the risks to the taxpayer-backed GSEs. Given our multiple responsibilities to conserve the assets of Fannie Mae and Freddie Mac, maximize assistance to homeowners to avoid foreclosures, and minimize the expense of such assistance to taxpayers, FHFA concluded...
The investor group that had been seen as the most formidable opponent to Bank of Americas proposed $8.5 billion MBS settlement pulled out of the fight this week. Walnut Place submitted a motion to New York State Supreme Court Judge Barbara Kapnick, which she granted, to formally withdraw its objection to the BofA settlement. Walnut Place respectfully requests that it be permitted to withdraw as an intervenor in this proceeding, the investor group wrote to the judge. Walnut Place, which represents...
There appear to be no immediate plans to move the GSEs beyond conservatorship status but news this week that the Federal Housing Finance Agency is actively investigating the possibilities of receivership may be designed to attract the attention of thus far indifferent policymakers and snap official Washington into action, say industry experts. The FHFA this week confirmed that it has commissioned the consulting firm PricewaterhouseCoopers to create contingency plans for taking Fannie Mae, Freddie Mac and the Federal Home Loan Banks into receivership. A Finance Agency spokesman said the hiring of PwC, which was not officially announced, is just one of a number of ordinary regulatory activities that the FHFA is authorized and obligated to pursue under the authority granted the agency by the Housing and Economic Recovery Act of 2008.
The Federal Home Loan Bank system is one of three potential hosts for a proposed new refinance program unveiled this week by a Senate Democrat aimed at rescuing underwater homeowners without direct federal assistance. Oregon Sen. Jeff Merkleys proposal spelled out in a white paper titled The 4% Mortgage: Rebuilding American Homeownership would create a temporary government-backed trust to purchase eligible mortgages issued by private lenders. The RAH Trust would be funded by the federal governments sale of bonds to investors. The plan would allow underwater borrowers who are current on their mortgages to refinance at a lower interest rate.