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Inside The GSEs

November 9, 2005

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House GSE Bill Foundering After Floor Victory

The House voted overwhelmingly last month in support of H.R. 1461, but most observers believe there is little chance the vote will spur Congress to finalize a GSE reform plan this year. “I just don’t see how [H.R.] 1461 in its present form can move forward,” said Bert Ely, an industry consultant and GSE critic. “It’s a near certainty that we won’t see GSE reform this year. And I think it’s a reasonable possibility that... Read More

FHLBanks Satisfied with House Reform Plan

Most Federal Home Loan Bank observers are satisfied with a version of GSE reform that was approved by the full House late last month.H.R. 1461 would set up a new regulator for Fannie Mae and Freddie Mac as well as the Federal Home Loan Banks. The Federal Housing Finance Agency would replace the current Office of Federal Housing Enterprise Oversight and Federal Housing Finance Board. But the new regulator... Read More

Computer Glitch Causes More Headaches at Freddie

Reports that Freddie Mac had completely resolved its accounting problems have apparently been exaggerated, as the GSE announced this week that it’s reducing its reported earnings 12.5 percent because of a computer error in a legacy system. Officials said the revision reflects the correction of interest accruals recorded for certain mortgage-related securities that have been improperly quantified since 2001. Specifically, an older computer system overestimated the interest income earned by... Read More

GSE Share of Overall Market Continues Decline

Fannie Mae’s and Freddie Mac’s share of the mortgage market continues to decline as the popularity of nontraditional mortgages continues to grow. According to recent data tracked by Inside The GSEs, Fannie and Freddie and the Federal Home Loan Banks accounted for approximately $653.6 billion of an estimated $2.3 trillion in total originations through nine months of 2005. That works out to a market share of just 28.4 percent – down from... Read More

Housing Groups Remain Opposed to AHF Restrictions

Housing advocates who tried to stop GOP lawmakers in the House from adding last-minute restrictions to a GSE reform bill in the House last month are set to carry their fight over into the Senate. H.R. 1461, which would create a new regulator for Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, passed by an overwhelming 331-90 margin during a House floor vote. But Republicans and Democrats sparred... Read More

Fannie Meets Capital Surcharge: What Next?

Wall Street reacted positively overall to news that Fannie Mae had met its regulatory surcharge on retained capital, but some analysts are less optimistic than others about the giant GSE’s ability to ramp up its earnings in the coming months. The Office of Federal Housing Enterprise Oversight announced last week that Fannie had met a 30-percent regulatory surcharge on its minimum capital that went into effect on Sep. 30. The surcharge... Read More

Freddie Claims LP Could Serve Subprime Borrowers

Freddie Mac officials didn’t make any friends in the subprime industry with recent claims that one fifth of subprime borrowers could be approved for GSE-funded loans. According to Peter Zorn, Freddie’s vice president for housing economics, about 20 percent of the applications that are submitted to the company’s Loan Prospector underwriting system by... Read More

New Lobbyist at Freddie, Same Hefty Budget

Freddie Mac might have a new top lobbyist, but it doesn’t look like the GSE has changed its approach to spending big money to push its agenda on Capitol Hill. According to Political Moneyline, a nonprofit that tracks political contributions, the smaller GSE spent $7.26 million on lobbying activities on Capitol Hill through the first six months of the year. That placed Freddie fourth among active lobbyists, behind number one... Read More

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