Although it's unlikely that Fannie Mae and Freddie Mac will engage in principal reductions anytime soon, a new report from CBO says it could do some good.
Will investors in GSE stock sue the federal government for "sweeping" earnings out of Fannie Mae and Freddie Mac? Meanwhile, PennyMac worries about its "Countrywide" problem.
Bank of America and MBIA announced a settlement this week of a long-running dispute regarding representations and warranties on mortgages securitized by Countrywide Financial. The settlement benefits non-agency MBS wrapped by MBIA, according to industry analysts. The settlement applies to all outstanding rep and warrant claims and all other claims between the bank and bond guarantor. BofA agreed to pay MBIA approximately $1.6 billion in cash and remit to MBIA all of the outstanding notes in the firm that BofA acquired in December. BofA also will terminate...
Fannie Mae and Freddie Mac this week reported a combined $63.3 billion in net income during the first quarter of 2013, which represents a huge dividend to taxpayers on the total $189.4 billion capital infusion they received since going into conservatorship. Together, the two government-sponsored enterprises will have paid $131.6 billion to the Treasury by the end of the second quarter, when the government “sweep” of excess net worth takes place. Under the terms of their bailout, the GSEs never pay down their Treasury draws, regardless of how much they pay in preferred stock dividends or net-worth sweeps. But Fannie and Freddie are...
New York Attorney General Eric Schneiderman announced this week that he plans to file lawsuits against Bank of America and Wells Fargo for failing to comply with servicing standards included in the $25 billion national servicing settlement. Other states appear likely to join the action, though the litigation might not have much of an impact on the servicers, according to industry analysts. “My office has received a significant number of complaints regarding the flagrant violations by Bank of America and Wells Fargo of the loan modification timeline requirements contained in [the settlement],” Schneiderman said in a letter to the committee monitoring the settlement. BofA and Wells, along with Ally Financial, Citigroup and JPMorgan Chase, have had to comply...
The three percent points-and-fees cap for qualified mortgages under the Consumer Financial Protection Bureau’s ability-to-repay rule is likely to push the private mortgage insurance industry away from products that emphasize upfront premiums and towards products built on monthly premiums. As the rule stands now, borrower-paid, non-refundable upfront MI premiums would be included in the points-and-fee calculation, but borrower-paid monthly MI premiums would not. There are two caveats: lenders may also exclude...
Most mortgage industry observers expect the Federal Housing Finance Agency to raise Fannie Mae and Freddie Mac guaranty fees by about 20 basis points this year, but many are convinced that the impact on market practices may be bigger than the magnetic effect on private capital. The FHFA has said it wants to raise g-fees to the point that private capital comes into the market, according to Paul Mullins, a senior vice president and interim head of single-family at Freddie Mac. During remarks at the secondary market conference sponsored by the Mortgage Bankers Association this week, he said “The odds are reasonably good you will see higher guaranty fees.” Already around 50 bps and twice their historic level, the fees charged...
Fannie Mae is set to "give back" $50.6 billion to the U.S. Treasury by June 30, thanks to stellar earnings and accounting treatment of deferred tax assets.
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