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Inside The GSEs

October 15, 2008

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GSEs Face Sea Change in Counterparties

If things weren’t tough enough for Fannie Mae and Freddie Mac in terms of rising mortgage losses and recently being seized by Uncle Sam, the ongoing crisis in the financial markets has resulted in a major transformation of the companies the GSEs depend on for business. From mortgage lenders and servicers, to private mortgage insurers and... [Includes one chart] Read More

Regulators Favor FNM, FRE, Not FHLBanks

The Federal Home Loan Banks may be victims of their own success. A credible argument can be made that the GSE regulatory playing field is tilting in favor of Fannie Mae and Freddie Mac, while the Federal Home Loan Banks are seeing all the calls from the officiating crew going against them. Most significantly for the FHLBanks, the Federal Deposit Insurance Corp. made advances less... Read More

GSE MBS Volume Fades in 3Q08

Business volume in the GSEs’ core mortgage-backed security guaranty programs dropped sharply during the third quarter of 2008 as the U.S. housing industry and economic activity continued to decline.Fannie Mae and Freddie Mac produced $171.64 billion of new MBS during the third quarter, a 43 percent drop from the previous period. It was the lowest quarterly GSE... [Includes one chart] Read More

Fannie Staff Facing Cuts, Despite Assurances

As many as 70 Fannie Mae staffers have seen their positions eliminated in the last few weeks – above and beyond the recent executive and lobbying departures – despite plenty of previous assurances to the contrary by the new senior management, according to unconfirmed reports. When the Federal Housing Finance Agency put Fannie and rival Freddie Mac into federal conservatorship... Read More

Fannie Lets Servicers Enjoy the Float Once Again

Fannie Mae last week reversed course and allowed an unspecified number of its mortgage-backed securities servicers to take advantage of the “float” resulting from holding principal and interest payments due the GSE. Fannie took the step after the Federal Deposit Insurance Corp. yielded to pressure from mortgage industry groups to amend some of the deposit insurance rules for accounts held at... Read More

GSEs Poised to Buy up $40 Billion a Month in MBS

Bond traders are expecting to see Fannie Mae and Freddie Mac purchase a combined $40 billion a month in underperforming mortgage-backed securities, as part of the federal government’s broader effort to cleanse the financial markets of troubled mortgage-related assets and jump-start the free flow of credit and capital. The upcoming purchases are said to be mostly subprime, Alt A and... Read More

Did FHFA Manipulate GSE Capital Requirements?

Can you fail to satisfy a capital requirement you don’t know you even have? If you’re Fannie Mae or Freddie Mac, the answer appears to be yes. Last week, in a highly unusual move, the GSEs’ regulator, the Federal Housing Finance Agency, issued an announcement declaring Fannie and Freddie as undercapitalized during the second quarter, calling upon its new discretionary authority... Read More

FHLBanks Might Provide $100 Million in H4H Support

The 12 Federal Home Loan Banks just got a little more relevant and useful to their members, but only about $100 million worth. Last week, their new regulator, the Federal Housing Finance Agency, issued an interim final rule that will enable members of the Banks participate in the new HOPE for Homeowners program. However, only about $100 million will be available, so the positive effect in... Read More

News In Brief

FHLBank of Chicago Tries to Resurrect MPF Program, With Help from Fannie: The Chicago FHLBank and Fannie Mae have struck a... Fannie Finds Little Market Value For FASB Proposed Revision to Rule: Fannie Mae doesn’t see much use for a proposed tweak to the... FHFA Increases GSE Oversight Budget by 14.8 Percent: The creation of a new regulatory oversight apparatus is costing Fannie Mae... Read More

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