The status quo in the MBS market – suffocating domination by Fannie Mae, Freddie Mac and Ginnie Mae – isn’t likely to change for the next five years, or longer, according to industry experts at this week’s ABS East conference in Miami sponsored by Information Management Network. Although a number of industry groups have offered proposals similar to the third option outlined by the Treasury Department in its reform white paper – a more competitive market of issuers backed by private capital that issue MBS with backstop guarantees from the government – those proposals are far from uniform, said Laurie Goodman, senior managing director at...
“Is a 30-year FRM always the best option for consumers?” asked Sen. Richard Shelby at a hearing held by the Senate Banking, Housing and Urban Affairs Committee this week. The Alabama Republican was raising an issue that lies at the foundation of any new mortgage finance system the government may try to cook up. The 30-year FRM, a staple in the U.S. housing market for generations, has come to rely on the separation of credit risk and interest rate risk that results from a government-backed mortgage securitization system. “Securitization by Fannie and Freddie make them possible,” said John Fenton, president and CEO of Affinity Federal Credit Union. “Without...
The Senate voted this week to reinstate the higher conforming loan limit that expired at the end of September, heeding calls by the real estate and mortgage industries. On a vote of 60-38, lawmakers passed an amendment to the FY2012 funding bill, S. 1596, for the Department of Housing and Urban Development, which, among other things, would raise the maximum loan amount that can be guaranteed by FHA, Fannie Mae and Freddie Mac. Introduced by Sen. Robert Menendez, D-NJ, the amendment restores the 125 percent median home price formula used to calculate the temporary higher loan limits in effect prior to Oct. 1, which was up to $729,750 in certain high-cost areas of the country and lower in other jurisdictions. After Oct. 1, the new loan limit calculation was ...
Despite the sound and fury from publicly peeved House Democrats directed at Federal Housing Finance Agency Acting Director Edward DeMarco, including calls for him to step aside, the consensus among industry insiders and those in the know on Capitol Hill is – good luck finding anyone else willing or able to jumpstart the underperforming GSE refinance plan while obeying the FHFA’s restrictive regulatory mandate.
Any changes that would restrict membership or narrow the Federal Home Loan Banks’ mission should come first from Congress not by administrative fiat, Bank officials told House members this week.FHLBank of Dallas Chairman Lee Gibson testified before the House Financial Services Subcommittee on Oversight and Investigations that explicit Congressional guidance is both necessary and proper before any fundamental alteration of the FHLBank system is imposed.
The Federal Housing Finance Agency needs to explain why it hired expensive outside counsel instead of dispatching government lawyers in its massive litigation against the nation’s big financial institutions, as well as just how much the agency expects to recoup from the effort, according to a senior Republican congressman.
As the Federal Housing Finance Agency ponders possible improvements to the government’s Home Affordable Refinance Program, calls from different corners of the industry are growing louder for the FHFA to end fees charged to borrowers who refinance Fannie Mae and Freddie Mac mortgages.
The Federal Home Loan Bank of Chicago’s long awaited capital stock conversion plan has received the thumbs up from the Federal Housing Finance Agency, moving the Bank a giant step toward regaining equal footing with its fellow FHLBanks.
Fannie Mae and Freddie Mac issued $177.19 billion in single-family mortgage-backed securities during the third quarter of 2011, a modest 14.3 percent improvement following two straight quarterly declines during the first six months of this year.The recent July-September cycle represented one of the weakest quarters historically for GSE MBS production since the financial markets crashed at the end of 2008.
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