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Inside The GSEs

May 26, 2010

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Treasury: GSE Restructuring Up Next

With comprehensive financial regulatory reform legislation almost wrapped up, the next big priority for the Treasury Department will be the overhaul of Fannie Mae and Freddie Mac, a top official said during a meeting with industry officials last week. “After financial regulatory reform, Treasury will move forward with GSE reform,” said Sarah Apsel, a policy adviser... Read More

Reg Reform Bill Could Slam Advance Business

The Federal Home Loan Bank advance business – a chief driver of the Banks’ earnings – is already down 9 percent through the first quarter of this year, and it could get a lot worse if the regulatory reform bill that passed the Senate last week is enacted as it’s now written. Both the Senate and the House iterations of the reform legislation contain language prohibiting... Read More

Reg Reform Could Hurt GSE Hedging Strategies

Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks could find themselves severely constrained in their ability to hedge the substantial interest-rate risks they face on the trillions of dollars of mortgage assets they own under the financial regulatory reform legislation approved last week by the Senate. An amendment that was incorporated into S. 3217.... Read More

Fannie, Freddie Assume New Roles With UMDP, HVCC

The transformation of Fannie Mae and Freddie Mac into the federal government’s jack of all trades when it comes to housing issues continued over the last week, with the two GSEs assuming two new roles, despite concerns the companies may not be up for the extra responsibilities and arguably already have their hands full. This week, the Federal Housing Finance... Read More

Is Fannie’s VIE Accounting on the Up-And-Up?

Fannie Mae might be the only financial entity that’s benefiting from a new accounting standard on the transfer of financial assets and the consolidation of variable interest entities, vehicles by which Fannie and Freddie Mac were able to keep trillions of dollars of mortgages backing GSE securities off their balance sheets. However, as of Jan. 1, 2010, both companies... Read More

Fed Stands to Increase its ROI on GSE Purchases

The Congressional Budget Office this week projected that the Federal Reserve’s actions to stabilize the financial system – including its massive support of Fannie Mae, Freddie Mac and the Federal Home Loan Banks – will return to the Treasury in fiscal years 2010 and 2011 more than double the amount it remitted in FY2009. “CBO projects that remittances will grow from... Read More

FHLBanks Keep Buying GSE, Ginnie vs. Non-Agency

The Federal Home Loan Banks continued to snap up agency mortgage-backed securities in the first quarter at the expense of non-agency, with interest in Ginnie Mae securities growing at multiples higher than that in GSE securities, according to the latest analysis by Inside The GSEs of data provided by the Federal Housing Finance Agency... [Includes one chart] Read More

News In Brief

DeMarco Urges Caution In Imposing Financial Crisis Fee on the FHLBanks.... FHFA Tells Congress of its Concerns With Fannie, Freddie, and the FHLBs... FHFA Issues New Mechanism For GSE Compensation Info... Read More

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