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Inside The GSEs

June 9, 2010

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Will FASB Wreak More Havoc With GSEs?

Last year, the Financial Accounting Standards Board revised some of its accounting standards in a way that required Fannie Mae and Freddie Mac to overhaul their balance sheets, affecting trillions of dollars of assets. And now, the board is poised to strike again with a fair value accounting proposal that could have a significant impact on the GSEs, depending upon a number of factors... Read More

FHFA Proposes Housing Goals for One FHLB

The Federal Housing Finance Agency has issued a proposed rule that would institute a handful of housing goals for the Federal Home Loan Banks, but only one of the Banks would actually have to comply with the proposal, based on 2009 loan purchase volumes, thanks to the relatively high qualifying threshold trigger. The FHFA proposal would apply to... Read More

Bank, Thrift Advance Use Drops by Nearly a Third

In another sign that Federal Home Loan Bank advance use continues to wane, an analysis by Inside The GSEs of the latest call report data found that bank and thrift institutions continued to pull back from advances in the first quarter – the sixth consecutive quarterly decline – due to increased deposits, decreased loan demand and continued consolidation... [Includes one chart and one graph] Read More

GSE Reform? DeMarco Says Start at the Beginning

When it comes to the future form and function of Fannie Mae and Freddie Mac, policymakers ought to first decide on the federal government’s policy on homeownership, proceed onto how best the government can support that policy, and then figure out what entities would be best suited to facilitate that support. Once that’s done, then policymakers can... Read More

Fannie, Freddie Credit Outlook Remains Tough: S&P

Fannie Mae and Freddie Mac are likely to experience substantial additional credit losses for at least the next three years, in large part because mortgage modification efforts may just be delaying the inevitable, according to a new report by Standard & Poor’s Rating Services. During 2008 and 2009, Fannie and Freddie were aggressive in beefing up their reserves for expected... Read More

Fed Sales of GSE MBS Delayed Until Rates are Raised

The Federal Reserve told Congress recently it doesn’t plan to begin selling off its massive portfolio of Fannie Mae and Freddie Mac mortgage-backed securities until it begins raising rates again. The U.S. central bank “currently does not anticipate that it will sell any of its securities holdings in the near term, at least until after policy tightening has gotten under way and... Read More

Fannie, Freddie Face New Duty-to-Serve Mandate

The Federal Housing Finance Agency has issued a proposed rule that would impose new “duty-to-serve” requirements for Fannie Mae and Freddie Mac as part of its implementation of the Housing and Economic Recovery Act. Given the spotty record the GSEs have had on their affordable housing goals in recent years, their odds of success in satisfying the new mandate... Read More

FHLB Allies Urge Adoption of Advance Exclusion

Ten industry trade groups called upon members of Congress this week to protect the advance business of the Federal Home Loan Banks from a potentially crippling provision in the financial regulatory reform legislation. Both the Senate and the House versions of the legislation contain a prohibition on institutions lending an amount to any unaffiliated company that exceeds 25 percent of the lending... Read More

News In Brief

Hensarling, Maloney Target FHFA, GSEs in New Bills... How About a 345 Percent Return On Your Fannie, Freddie Stock?... ASF Retains Former OFHEO Head Falcon as Advisor... GAO Finds Room for Improvement With FHFA Accounting, Internal Controls... Read More

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