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Inside The GSEs

June 23, 2010

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GSE Repurchase Demands Accelerate

Fannie Mae and Freddie Mac are forcing lenders to repurchase a significantly higher volume of troubled mortgages, as the cash-strapped GSEs try to minimize the losses they suffer and invariably pass onto American taxpayers. The pair reported a combined $3.1 billion in lender repurchases during the first quarter, with Fannie reporting $1.8 billion and Freddie $1.3 billion... Read More

FHLBank Member Borrowing Capacity Drops

A number of members of the Federal Home Loan Banks are seeing their financial condition deteriorating and their credit risk rating being lowered, and that’s contributing to an overall decrease in borrower capacity system-wide. That in turn affects how much those members can utilize FHLBank advances, a prime earnings source for the Banks, and can cause some shrinkage in a FHLBank’s ... Read More

GSE Loss Mitigation Activity Skyrockets in First Qtr.

The efforts by Fannie Mae and Freddie Mac to facilitate the Obama administration’s foreclosure prevention programs, by all measures, skyrocketed in the first quarter, according to a new analysis by Inside The GSEs of data from the Federal Housing Finance Agency.Total home retention efforts jumped to 214,729 in the first quarter, up 84 percent from the... [Includes one chart] Read More

As GSEs Delist, Experts Mull the Implications

Last week’s announcement that Fannie Mae and Freddie Mac were being directed by their regulator to delist from the New York Stock Exchange didn’t surprise many observers, but it did raise some important public policy considerations. “Delisting likely would have occurred long ago if the companies’ actions were not so prominent in the financial markets and they were not in part agents... Read More

Fannie Faces $7.25 Million ERISA Lawsuit Payout

The U.S. District Court for the District of Columbia recently gave preliminary approval to a $7.25 million class-action settlement of a legal dispute alleging breaches of fiduciary duties on the part of Fannie Mae and the fiduciaries of its employee stock ownership plan under the Employee Retirement Income Security Act. The case applies to all current or former participants in or... Read More

Freddie Says BofA, TBW Demands Could Cost $10 M

As a number of creditors fight over the remains of one of Freddie Mac’s largest seller/servicers, the now-defunct lender Taylor Bean & Whitaker, the GSE is fighting a legal demand for documentation that could involve millions of pages of information and cost millions of dollars to produce. In recent months, Bank of America, BNP Paribas, and the Federal Deposit Insurance Corp. joined in a... Read More

Treasury Holdings of GSE MBS Increase

The Treasury Department purchased $3.84 billion in Fannie Mae and Freddie Mac mortgage-backed securities last month, the first increase all year, bringing the agency’s account balance of such purchases to $185.60 billion as of the end of May. Treasury’s program to support the GSEs via MBS purchases began in September of 2008, the same month that Fannie and Freddie were placed in... Read More

GSEs Face No Repercussions Over Goal Failures

Fannie Mae appears to have done a better job in meeting its housing mission goals than rival Freddie Mac, according to a preliminary review by the Federal Housing Finance Agency, but neither GSE will have to submit a remedial plan for their respective goal failures. The FHFA has determined a number of goals weren’t feasible due to market and economic conditions, so the GSEs are off the hook... Read More

FDIC’s Bair Calls for Decisive Policy on GSEs

Federal Deposit Insurance Corp. Chairman Sheila Bair last week called for policymakers to make GSE reform the top priority after regulatory reform is enacted – and to finally and definitively spell out exactly what role the government will have and what role the private sector and the marketplace will fulfill. “To the extent that the government wishes to promote homeownership and stability in the... Read More

News In Brief

FHLB Advances Set to Avoid Reg Reform Bill Restriction: The Federal Home Loan Banks and their allies are poised to achieve a potentially significant... ‘Fiduciary Duty’ Language Stalls In Conference Committee: As lawmakers continued to work to merge the Senate and House versions of financial regulatory reform... Read More

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