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Inside The GSEs

July 22, 2011

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Draft Margin Rules a Disadvantage for GSEs

Hedging will become much more expensive for Fannie Mae, Freddie Mac and the Federal Home Loan Banks than for anyone else as proposed new rules on the margining of uncleared derivatives will significantly increase the cost of trading, the GSEs warned federal regulators.GSEs regulated by the Federal Housing Finance Agency weighed in via comment letters on the rules proposed in April by the FHFA, as well as the Federal Reserve, the Farm Credit Administration, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency. Read More

Six FHLBanks Want in on BofA Settlement

A coalition of six Federal Home Loan Banks has gone to court seeking formal standing as investors in the proposed $8.5 billion Bank of America settlement over mortgage-backed securities even as court papers reveal investors could be owed a sum three times greater than the current BofA proposal.The Federal Home Loan Banks of Boston, Chicago, Indianapolis, Pittsburgh, San Francisco and Seattle together own certificates in 73 of the trusts that are part of the proposed settlement for which they paid more than $8.8 billion. Read More

Chicago FHLB Adds Nonprofit Lender IFF to Membership

The Federal Home Loan Bank of Chicago recently announced that the nonprofit lender and real estate consultant IFF has joined the Bank as a member.Formerly known as the Illinois Facilities Fund, IFF is the first community development financial institution to join the FHLBank of Chicago and only the sixth CDFI nationally to become part of the FHLBank system. Read More

House Bill Extends Loan Limits by 2 Years

Two House lawmakers, one Republican and one Democrat, have introduced a bill that would postpone a planned reduction of the high-cost loan limits for Fannie Mae, Freddie Mac and the FHA due to take effect this fall.Late last week, Reps. John Campbell, R-CA, and Gary Ackerman, D-NY, filed H.R. 2508, the Conforming Loan Limits Extension Act, which would mandate a two-year extension to keep conforming loan limits at 2008 levels. Read More

CA Tops in GSE Share, Fannie Leads by State

California continues to be the top source of new single-family mortgages for Fannie Mae and Freddie Mac even as Fannie remains the dominant GSE in terms of production through the first half of the year, according to an upcoming special report, GSE Market Profile: First Half 2011 by Inside Mortgage Finance Publications. Read More

House Subcomittee Moves Second Set of GSE Bills

Following contentious debate at times with Democrats, House Republicans last week advanced another installment of six narrow bills that would further curtail GSE activities or increase oversight while in conservatorship.The mark-up by the House Financial Services Subcommittee on Capital Markets and GSEs brings the total number of GOP-backed bills to reform Fannie Mae and Freddie Mac awaiting the full committee’s consideration up to 14 so far. Read More

Freddie’s General Counsel Resigns to Join Law Firm

Freddie Mac’s top lawyer is leaving the GSE after five years to join the law firm of SRN Denton as co-chair of the firm’s global Financial Institutions and Funds sector. Read More

Bill to Curb FHFA Pay of GSE Executives’ Legal Fees Re-Worked

A bill that would limit the payment of legal fees for Fannie Mae and Freddie Mac executives accused of fraud has been sent back to the drawing board for some additional tweaking. Read More

House Bill Would Make FHFA Honor PACE

A trio of House lawmakers from both parties rolled out legislation this week designed to prevent Fannie Mae, Freddie Mac and their regulator from blocking state and local clean energy initiatives that allow homeowners to install green upgrades.PACE, or property-assessed clean energy, programs enable local governments to finance renewable energy and energy efficiency projects such as solar panels, insulation and water conservation systems for their homes and commercial buildings. The financing is paid for by raising the individual homeowner’s tax. Read More

FHFA Issues Guidence on Prudential Standards

The Federal Housing Finance Agency is seeking comments on a long-awaited, recently-proposed rule to establish prudential standards relating to the management and operations of Fannie Mae, Freddie Mac and the Federal Home Loan Banks.The Housing and Economic Recovery Act of 2008 requires the FHFA director to establish standards that address 10 separate areas relating to the management and operation of the GSEs and FHLBanks and authorizes the director to establish the standards by regulation or by guideline. Read More

GSE Underwater Refi Bill Sponsors Try to Gain Steam

The sponsors of bills in the Senate and House that would allow underwater borrowers to refinance with Fannie Mae and Freddie Mac into a lower-rate loan say they are gathering support. Despite the renewed attention, industry observers say passage remains a tall order. Read More

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