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Inside The GSEs

January 20, 2010

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Obama May Leave GSEs’ Fate to Congress

GSE watchers seem increasingly of the opinion that the Obama administration has too many fires to put out right now to be able to lead the charge for redefining the government’s role in mortgage finance in the future, and with it, the form and function of Fannie Mae and Freddie Mac. “It was my understanding initially that there was supposed to be a full drill of GSE options. But in... Read More

FHLBs Rolling Out New Advance Products

In an effort to help stimulate the flagging market for Federal Home Loan Bank advances in a competitive funding environment, some of the Banks have begun developing new advance products that might expand their members’ use of the financial instrument. For instance, the Indianapolis FHLBank recently came out with an inverse floater advance, a product that enables members to lock in long-term... Read More

GSE Market Share Eased in Late 2009

Although Fannie Mae and Freddie Mac continued to account for a huge share of mortgage activity in 2009, the GSEs saw their dominance whittled down slightly by stiff competition from the government-insured market as the year wore on. Fannie and Freddie issued some $1.269 trillion of mortgage-backed securities last year, representing 71.5 percent... [Includes one chart] Read More

GSE Credit Losses to Keep Increasing Due to Mods

Fannie Mae and Freddie Mac are likely to see their credit losses continue to grow as long as they are stewards of the federal government and instruments of federal policy to help stave off mounting foreclosures, according to an analysis by Moody’s Investors Service. “The use of these entities to stabilize housing will likely increase their overall credit losses as a... Read More

GSEs Refi 4 Million Loans, Implement 405,000 Mods

Fannie Mae and Freddie Mac remain at the forefront of national loan modification efforts, implementing more than 405,000 trial and permanent loan modifications under the Obama administration’s Home Affordable Modification Program, along with refinancing nearly 4 million loans, as of November 2009, according to the Federal Housing Finance Agency’s third quarter Foreclosure Prevention & Refinance... Read More

Sen. Corker Questions Geithner on GSE Reprieve

Sen. Bob Corker, R-TN, a member of the Senate Banking, Housing and Urban Affairs Committee, last week pressed Treasury Secretary Timothy Geithner about Treasury’s decision to lift the $400 billion combined cap on its support of Fannie Mae and Freddie Mac, which he said provides a blank check for the amount of credit that will be made available to the pair. Corker expressed particular... Read More

Fed Earned $52B on Rescue, Mostly from GSE Buys

The Federal Reserve System announced last week preliminary earnings of $52.1 billion for 2009, up substantially from the $14.4 billion generated in 2008, largely on the strength of the increased earnings on the GSE mortgage-backed securities and GSE debt it purchased last year. “The Federal Reserve Banks’ 2009 net earnings were derived primarily from... [Includes one chart] Read More

Lawmakers Push to Force an IG Appointment for FHFA

A bipartisan handful of legislators is pressing the Federal Housing Finance Agency and the Obama administration to finally name an inspector general for the FHFA, which has been without an IG since the agency was created by the merger of the Office of Federal Housing Enterprise Oversight and the Federal Housing Finance Board. “Fannie Mae and Freddie Mac have become the... Read More

GSEs Helped Provide $23B for State, Local Housing

Fannie Mae and Freddie Mac continued to be called upon to help rescue the housing market on just about every front, this time helping to provide $23 billion in new housing capital to state and local housing finance agencies. This particular type of assistance, in the form of a bond purchase program and liquidity facility, took place under the Obama administration’s Housing Finance... Read More

FHFA Proposes Minority, Women, Disabled Inclusion Regulation

The Federal Housing Finance Agency recently published a Notice of Proposed Rulemaking on Minority and Women Inclusion, under which Fannie Mae, Freddie Mac, each Federal Home Loan Bank and the Federal Home Loan Bank System’s Office of Finance would be required to establish, maintain and adequately fund a diversity program. Each of these entities would be required to "take diversity into account... Read More

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