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Inside The GSEs

May 12, 2010

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Senate Rejects Thorough GOP Plan on GSEs

The Senate this week rejected a detailed plan sponsored by Republican lawmakers that would end the government’s conservatorships of Fannie Mae and Freddie Mac, after a spirited debate that often focused on which political party was responsible for the GSE losses incurred by taxpayers. Democrats rejected the GOP plan because they said it would create nothing to replace the huge role... Read More

FHLBanks See 1Q Earnings Drop Substantially

The Federal Home Loan Banks saw their net income plunge from $552 million in the fourth quarter of 2009 to $325 million in the first quarter of this year, a fall of 41.1 percent, according to preliminary, unaudited figures released last week by the FHLBank Office of Finance. The OF attributed the fall-off mostly to net losses on derivative and hedging activities, which were... Read More

FCIC Documents Fear Prompting Conservatorships

The Financial Crisis Inquiry Commission last week released documents showing the growing fear government officials felt that led to the federal takeover of Fannie Mae and Freddie Mac in 2008. For instance, back in February 2008, Federal Reserve Bank of New York officials informed personnel at the Treasury Department of their worry that, after Fannie and Freddie reported worse-than... Read More

Cox Blames FNM, FRE for Fueling Risky Mortgages

Former Securities and Exchange Commission chief Christopher Cox told the Financial Crisis Inquiry Commission last week that Fannie Mae and Freddie Mac, as “shadow” banking institutions, helped drive the mortgage industry’s support for risky mortgages and the resulting bubble that burst with such dramatic consequences for the housing market and the economy. “They stimulated the creation... Read More

Accounting Change Roils Fannie, Freddie

The Financial Accounting Standards Board’s decision last year to change the accounting standards governing the transfer of financial assets and the consolidation of variable interest entities is, as expected, wreaking almost as much havoc on the financial statements of Fannie Mae and Freddie Mac as the collapse in the housing market and the recession. VIEs are vehicles... Read More

Fannie, Freddie Lose Another $18 Billion

After their losses peaked at $33.16 billion in the first quarter of 2009, Fannie Mae and Freddie Mac have seen their continuing losses shrink to the point where the pair lost “only” $18.22 billion in the first quarter of the year. However, thanks to a new accounting treatment from the Financial Accounting Standards Board that exerted widespread effects throughout... [Includes one chart] Read More

FHFA Still Has Portfolio Holdings Reg on its Agenda

The Federal Housing Finance Agency still has three important regulations on its regulatory agenda to develop and finalize for Fannie Mae and Freddie Mac, one of which has to do with portfolio holdings in a post-conservatorship world. On Jan. 30, 2009, the FHFA issued an interim final rule that limits the portfolio holdings of Fannie and Freddie... Read More

FHFA Might Place More Limits on FHLB MBS Holdings

Last week, the Federal Housing Finance Agency issued a notice of proposed rulemaking on the subject of Federal Home Loan Bank investments that indicates the agency is considering placing additional limits on the Banks’ mortgage-backed securities holdings, especially non-agency MBS. In its notice, published in the May 4 Federal Register, the FHFA indicates it is proposing to... Read More

News In Brief

FHFA to ‘Refresh’ FHLB Membership Rules to Align With Public Purpose: The Federal Housing Finance Agency plans to revise the rules for membership in the Federal Home Loan... Rep. Garrett Asks Senate to Add Covered Bonds to Reg Reform Bill: Reps. Scott Garrett, R-NJ, and Spencer Bachus, R-AL, have written to the leadership of the Senate... Read More

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