Legislative reform of Fannie Mae, Freddie Mac and the FHA will take years, according to panelists at the Mortgage Bankers Association's annual convention.
The incredibly shrinking refinance market helped continue the shift in the mix of single-family mortgages securitized by Fannie Mae and Freddie Mac in the month of September, according to a new Inside The GSEs analysis.
Legislative sources say the partial government shutdown did not significantly impede the Senate Banking Committee’s work toward finding a solution to Fannie Mae and Freddie Mac.
The Federal Housing Finance Agency is requiring Fannie Mae and Freddie Mac to promptly notify the agency whenever they detect fraud “or other financial misconduct” with any business entity they have done business with during the past three years.
Meanwhile, sources told Inside Mortgage Finance that the FHFA is looking to extract several billion dollars from Bank of America to settle claims that its Countrywide Financial division sold the GSEs toxic MBS.
Still, one industry lobbyist warns that with Cory Booker’s election to the Senate, the White House may be willing to exert more influence to advance Mel Watt’s nomination to head the FHFA.
Since the summer, the regulator has been pondering reducing the current $417,000 maximum loan limit and the “high cost” limit of $625,500. At the earliest, a change could come by January.
The low profile of the FHLBs, which has served the system so well in the past, has become a “sizable policy risk” as the relatively few people who will be directing housing finance reform know what the system does.
Mortgage banking officials tracking the issue believe that if the agency is going to lower Fannie Mae/Freddie Mac loan limits for 2014 it will need to codify those changes by mid- to late October to give lenders time to update their technology systems.