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Inside The GSEs

November 4, 2009

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SIGTARP Slams Freddie’s HAMP Performance

Freddie Mac wasn’t set up to be the traffic cop for a president’s housing rescue plan, and it shows. The Special Inspector General of the Troubled Asset Relief Program examined the GSE’s role as compliance agent for the Obama administration’s Home Affordable Mortgage Program and found Freddie wanting on a number of levels. The TARP’s Office of Financial Stability “observed that Freddie Mac... Read More

Non-Agency MBS Continue to Haunt FHLBs

The third quarter of 2009 wasn’t much of a treat for five Federal Home Loan Banks that reported net losses for the period. Deteriorating non-agency mortgage-backed securities were once again the culprit, knocking the collective system’s financial performance into the red during the quarter. The Banks’ combined net loss for the third quarter of 2009 came to $165 million, compared to combined net... Read More

GSE Market Share Growing in 2009

Fannie Mae and Freddie Mac piled up record market share numbers during the third quarter of 2009, although some of the gains reflect timing issues in the mortgage finance system. New business volume at the two GSEs accounted for a record 87.7 percent of mortgage originations during the third quarter. Fannie and Freddie did a combined $359.5 billion of new business during the period, with 89.9 percent... Read More

No Pay Czar Clampdown on GSE Exec. Compensation

The Obama administration’s “pay czar,” Kenneth Feinberg, has retroactively slashed the compensation of a number of executives at seven huge firms that have received billions of dollars in federal aid, and may yet make further cuts, as the post-bailout-and-bonus backlash intensifies. But there are no indications the axe will fall on the chiefs at other beneficiaries of the U.S. taxpayers’ largess... Read More

Higher Loan Limits OK’d as Housing Fund Languishes

President Barack Obama last week signed into law legislation that extends through the end of 2010 the increased maximum size of loans that Fannie Mae and Freddie Mac are allowed to buy, giving a little more life to the $729,750 GSE jumbo mortgage market. Congress approved the extension of the temporary limits on Oct. 29, after the administration called upon lawmakers to act. The legislative vehicle... Read More

“Personnel Risk” Still a Problem at Fannie, Freddie

Fannie Mae and Freddie Mac continue to face some major staffing problems as the two companies linger in federal conservatorship and face an uncertain future, pending the will of Congress and the Obama administration.“Personnel risk at both enterprises remains a major challenge and risk going forward,” Federal Housing Finance Agency Acting Director Edward DeMarco said in testimony on Capitol Hill... Read More

GSEs See Subtle Shift in 2008 HMDA Demographics

The share of African-American and Hispanic borrowers among loans sold to Fannie Mae and Freddie Mac declined slightly in 2008, according to a new analysis of Home Mortgage Disclosure Act data by Inside the GSEs. Hispanic borrowers accounted for 4.9 percent of Fannie’s business last year, down from an 8.0 percent share in 2007, and a similar drop – from 7.1 percent to 5.0 percent – was recorded at... Read More

GSEs Performed Poorly on Goals, FHFA Confirms

Fannie Mae and Freddie Mac, as widely expected, failed most of their 2008 affordable housing goals, the Federal Housing Finance Agency confirmed in the annual housing report it sends to Congress. And 2009 housing goals have all been lowered, including some multifamily goals that have been cut to levels “well below” the GSEs’ actual performance in recent years. “However, due to conditions in the... Read More

FHFA to Scrap Cap on FHLB Director Pay

In another gesture towards helping the Federal Home Loan Banks attract and retain directors for their boards, the Federal Housing Finance Agency issued a proposed rule in late October that would dump the statutory caps that were placed on the annual compensation that could be paid to the directors. "The proposed rule would allow each FHLBank to pay its directors reasonable compensation and expenses... Read More

News in Brief

The Federal Home Loan Bank of Boston, continuing to struggle to return to profitability, has decided to cut expenses by at least 5 percent, or $3 million, by eliminating 18 staff positions. The personnel cuts are a part of a larger plan the Boston Bank is instituting to help bring itself back into the black after losing $105 million in the third quarter of 2009, on top of $4 million in... the second quarter and $83 million in the first. Read More

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