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Inside The GSEs

March 23, 2012

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FHFA Pay Cut Complicates GSE CEO Search

The Federal Housing Finance Agency is looking for two good chief executives who are willing to work a “thankless job” for substantially reduced pay and the chance to oversee the transition of Fannie Mae and Freddie Mac from private companies to government entities and perhaps eventually out of business altogether. Working closely with the two GSEs, the Finance Agency is in the midst of discussions with candidates to fill the CEO vacancies at both Fannie and Freddie, according to FHFA Acting Director Edward DeMarco. Read More

FHFA REO Rental Program Woos Investors

The Federal Housing Finance Agency is reportedly attracting some big investors as it proceeds with its initiative to dispose of GSE and government-held real estate-owned properties, but some industry observers question whether the fledgling program can be modeled in a way that makes business sense. Earlier this month, the FHFA announced the first pilot transaction under its REO initiative, which is targeted to the country’s “hardest-hit” metropolitan areas, including Atlanta, Chicago, Las Vegas, Phoenix and… Read More

HARP Refis Down in December Despite New Changes

The Home Affordable Refinance Program recorded a significant decrease in December despite the implementation of some new HARP 2.0 standards that took hold during the final month of 2011, according to the Federal Housing Finance Agency. The FHFA’s latest foreclosure prevention and refinance report released this week noted that all HARP refis fell 36 percent to 23,323 in December from 36,304 in November. Read More

‘Unlimited’ Treasury Support of GSEs Expires Dec. 31

Unless Congress takes legislative action by the end of the year, Fannie Mae and Freddie Mac’s “unlimited” pipeline of cash support from the U.S. Treasury will be significantly dialed back, a paper by Deutsche Bank cautions. Although agency mortgage market observers have assumed that the Treasury will extend the taxpayers’ unlimited line of credit to the GSEs before the Dec. 31 deadline, a close reading of the authorizing legislation suggests that the Treasury may not be able to extend unlimited support without the approval of Congress, noted Deutsche Bank. Read More

OIG Digs FHFA on Oversight of Fannie Underwriting

Although the Federal Housing Finance Agency has taken steps to ensure that the GSEs’ mortgage purchases conform to certain underwriting standards, the Finance Agency’s oversight of underwriting standards is limited and requires more attention, the FHFA’s official watchdog concluded this week. The FHFA’s Office of Inspector General found in its audit of FHFA oversight of Fannie Mae’s single-family mortgage underwriting standards that the agency lacks a formal process for reviewing underwriting standards and variances. Instead, it informally reviews and comments on Fannie’s proposed credit policy changes. Read More

FHFA GSE ‘Scorecard’ Maps Conservatorship Goals

The Federal Housing Finance Agency has announced its roadmap for managing its conservatorship of Fannie Mae and Freddie Mac as it moves toward its ultimate end of reducing GSE market share and building a new secondary mortgage market infrastructure. Two weeks ago, the FHFA rolled out its 2012 “conservatorship scorecard,” which provides more details about the Finance Agency’s revamped strategic plan that was announced last month. Read More

FHFA Excludes GSEs From Private Transfer Fees

Fannie Mae, Freddie Mac and the Federal Home Loan Banks will now be prohibited from taking on mortgages “encumbered by certain types of transfer fee covenants and in certain related securities” under a final rule issued last week by the Federal Housing Finance Agency. The FHFA’s final rule, published in the March 16 Federal Register, generally applies, with some exceptions, to private transfer fee covenants created on or after Feb. 8, 2011, the publication date of the Finance Agency’s proposed rule. Read More

Freddie Hikes Servicer Fees on Reporting Noncompliance

Effective Sept. 1, Freddie Mac will assess a Reporting Noncompliance Compensatory Fee of up to $15,000 on servicers that fail to report on at least 75 percent of the loans they service by the fifth business day after the accounting cycle cutoff, the GSE noted in an alert to servicers last week. Freddie has upped the fine it will levy from $250 to $5,000 against any servicer that falls short of the GSE’s reporting rules. A second violation in one 12-month period will result in a $10,000 fine, previously $550. Read More

Group Sues FHFA for MBS Lawsuit Documents

A conservative, non-partisan public interest group has filed suit against the Federal Housing Finance Agency, claiming the FHFA has improperly denied the group’s request for documents relating to the Finance Agency’s decision to sue 17 financial institutions last fall on behalf of Fannie Mae and Freddie Mac over alleged misrepresentations of mortgage-backed securities.Last week, Judicial Watch filed its lawsuit in the U.S. District Court for the District of Columbia after the FHFA denied the group’s Freedom of Information Act request for documents related to the agency’s litigation. The Finance Agency argued that as private companies, FOIA requests do not apply to Fannie and Freddie. Read More

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