“Rating shopping is alive and well,” Calvin Wong, chief credit officer at Morningstar Credit Ratings, said last week at the ABS East conference in Miami Beach. The Securities and Exchange Commission recently released a rule setting new requirements for the rating services, but Wong warned that the SEC hasn’t done enough to address the issue. He said...
The market for non-agency MBS backed by nonperforming and re-performing home loans has grown exponentially in recent years. However, the sector remains relatively small and regulatory concerns persist regarding servicing practices. At the ABS East conference produced by Information Management Network last week in Miami Beach, Susan Valenti, a director at Wells Fargo Securities, said $1.0 billion of non-agency MBS backed by nonperforming loans and re-performing loans was issued in 2011, followed by $2.0 billion of such issuance in 2012, $5.7 billion in issuance in 2013 and $5.2 billion in issuance thus far in 2014. Most of the deals aren’t...
Attorneys for disenfranchised GSE shareholders have already filed a notice to appeal this week’s surprise dismissal by a Washington, DC, federal judge of the lawsuits challenging the Treasury Department’s 2012 “net-worth sweep” of nearly all profits generated by Fannie Mae and Freddie Mac. However, a legal expert notes that the ruling by Judge Royce Lamberth of the U.S. District Court for the District of Columbia makes a tall order even taller for investors taking on the government.
After six years of government control of the GSEs, Congressional inaction has ensured no legislative solution to housing finance reform anytime soon so the administration must take action, according to a white paper unveiled this week. Clifford Rossi, adjunct professor at the Robert H. Smith School of Business, University of Maryland, College Park, told Inside The GSEs that a legislative fix to GSE reform is the ideal solution.
A federal judge in Florida this week dismissed a lawsuit brought by the National Low Income Housing Coalition seeking to force Fannie Mae’s and Freddie Mac’s conservator to make good on the GSEs’ statutory obligations to contribute to the National Housing Trust Fund. In the summer of 2013, the National Low Income Housing Coalition filed suit arguing that since the GSEs returned to profitability in 2012, the Federal Housing Finance Agency should have directed Fannie and Freddie to begin to pay up.
Efforts to reduce the government-sponsored enterprises’ footprint using guaranty fees and loan limits should be left to Congress, according to Bob Ryan, a special advisor to the director of the Federal Housing Finance Agency. Meanwhile, officials at the Treasury Department suggest that the FHFA does have a role in setting policy that will inform any housing finance reform action by Congress.
The Federal Housing Finance Agency can and should improve its oversight of Freddie Mac information technology investments, concluded a new audit by the agency’s official watchdog. Last week’s Inspector General audit noted that Freddie is making “substantial investments” in IT in order to better support its operations and reduce risk. The GSE’s planned IT expenditures over three years are expected to exceed $1 billion, the IG added.
RSS