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Inside The GSEs

December 14, 2012

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New FHFA Director Nominees Floated

Despite the ever-increasing volume of political chatter that the White House is poised to nominate a new director of the Federal Housing Finance Agency, industry observers tell Inside The GSEs they aren’t altogether convinced the Obama administration is able or even willing to effect agency regime change and assume full ownership of the GSEs at this time. Following President Obama’s re-election last month, speculation shifted quickly from “if” to “when” Edward DeMarco, a Bush-era hold-over who recently began his fourth year as the FHFA’s “temporary” head, would be replaced. Read More

OIG: FHFA Must Improve GSE Pay Oversight

Despite gains in oversight and reform of the compensation packages for Fannie Mae’s and Freddie Mac’s top-level executives, the Federal Housing Finance Agency needs to beef up its reviews and examinations of the pay packages for the scores of vice presidents and directors currently employed by the two GSEs, according to the Finance Agency’s official watchdog. The FHFA’s Office of Inspector General report released this week noted a “significant cost” involved in the compensation of the two GSEs’ nearly 12,000 employees. Read More

FHFA: FHLBank Deputy Director Cross to Retire

The Federal Housing Finance Agency announced this week that Steven Cross, the FHFA’s deputy director of the Division of Federal Home Loan Bank Regulation, will retire from the agency in March 2013. Cross served as the Finance Agency’s overseer of the 12 FHLBanks since the FHFA was created in October 2008, while simultaneously serving as the agency’s chief operating officer from September 2009 to December 2011. FHFA Acting Director Edward DeMarco credited Cross’ “vital role” during a “period of upheaval in the housing and financial markets and significant development and change at FHFA.” Read More

Dems Push GSE Writedown As Part of Fiscal Cliff Deal

Democrats are making another attempt to require the forgiveness of principal on delinquent mortgages guaranteed by Fannie Mae and Freddie Mac as the White House and lawmakers are in talks to avoid the pending fiscal cliff. This week a group of 18 House Democrats dispatched a letter to President Obama and congressional leaders of both parties urging them to expand assistance to borrowers as part of any tax increase and spending cut resolution package. “Given the clear benefits of providing assistance to underwater borrowers, as well as the significant savings for the American taxpayers, we believe that provisions expanding such assistance should be part of any deal to resolve the fiscal cliff,” the members wrote. “At a minimum, such legislation should require that Fannie Mae and Freddie Mac offer principal reduction loan modifications to borrowers who are net present value positive.” Read More

Another G-Fee Hike by Congress Avoided For Now

Despite House passage of an immigration bill that would squeeze revenue from Fannie Mae and Freddie Mac guaranty fees, the measure doesn’t look like it’s going anywhere in the Senate but industry groups remain wary of future attempts to pickpocket the GSEs. Two weeks ago, the House passed H.R. 6429, the STEM Jobs Act of 2012, which would provide visas for qualified workers in the fields of science, technology, engineering and mathematics (STEM). … Read More

Fannie, Freddie Suspend Holiday Evictions, Draw Criticism

In what has become an annual tradition, Fannie Mae and Freddie Mac each announced last week that all foreclosure-related evictions of single-family and two-to-four unit properties are suspended nationwide until after the New Year. “We are instructing our foreclosure attorneys to suspend pending eviction lockouts on foreclosed homes in order to provide a greater measure of certainty to families during the holiday season,” said Tracy Mooney, Freddie’s senior vice president of servicing and REO. Read More

FHLBank Agency MBS Investments Decline in 3Q12

Fannie Mae and Freddie Mac mortgage-backed securities remained the preferred investment choice of the 12 Federal Home Loan Banks during the third quarter of 2012, with a slight decrease from the previous quarter, according to a new analysis and ranking by Inside The GSEs based on data from the Federal Housing Finance Agency. Meanwhile, Ginnie Mae securities posted a modest increase within the FHLBank system during the period ending Sept. 30, 2012. Read More

Lukewarm Support for FHFA’s GSE Securitization Plan

Industry groups are lukewarm but supportive overall of the Federal Housing Finance Agency’s efforts to modernize Fannie Mae’s and Freddie Mac’s securitization process but they remain concerned about changing servicing models, according to comment letters submitted to the agency. In September, the FHFA in a white paper proposed a framework for both a common securitization platform and a model pooling and servicing agreement with a request for public comment. The proposed infrastructure has “two complementary goals” – to replace the outmoded proprietary infrastructures of the GSEs with a common, more efficient model and to establish a framework that’s consistent with multiple states of housing finance reform, including greater participation of private capital in assuming credit risk. Read More

FHFA Rebuffs Motion to Exclude MBS Sample Method

The federal judge in charge of overseeing the multiple lawsuits filed by the Federal Housing Finance Agency against non-agency mortgage-backed securities issuers for allegedly misrepresenting deals that were sold to Fannie Mae and Freddie Mac rebuffed yet another motion by the banks to curtail the suits. Last week, Judge Denise Cote of the U.S. District Court for the Southern District of Manhattan rejected a motion to exclude an expert report describing the Finance Agency’s proposed… Read More

MGIC Finalizes Pool MI Settlement With Freddie

MGIC Investment Corp. announced it has met all its obligations to Freddie Mac, formally putting an end to the mortgage insurer’s dispute with the GSE over pool MI coverage. MGIC Investment Corp. this week transferred $100 million to its subsidiary, Mortgage Guaranty Insurance Corporation to maintain approval from Freddie to sell coverage as part of the overall $267.6 million settlement agreement. All other conditions by Freddie to continue the GSE’s approval of MGIC Indemnity Corp. (MIC) as a limited mortgage insurer are satisfied through Dec. 31, 2013, according to MGIC Chairman and CEO Curt Culver. Read More

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