Cart

Inside The GSEs

December 6, 2013

View Archived Issues

Senate Dems Could Push FHFA Watt Vote As Early As Next Week

It is no longer a question of “if” the Federal Housing Finance Agency will have a new head but rather “how soon.” When that occurs, the question will shift to “what’s next,” say industry observers. Following its return from Thanksgiving recess, the U.S. Senate could move as early as next Tuesday to vote to confirm Rep. Mel Watt, D-NC, President Obama’s pick to run the FHFA. The nominations of Watt and Janet Yellen to head the FHFA and the Federal Reserve, respectively, are tethered on the Senate’s agenda by design. Read More

Mortgage Insurers Anxiously Await New Capital Rules From FHFA

The Federal Housing Finance Agency is still weighing final risk-to-capital rules for mortgage insurance firms that conduct business with Fannie Mae and Freddie Mac, with a target release date of mid-December, MI executives told Inside The GSEs. MI sources with knowledge of the situation said the FHFA will likely issue a risk-to-capital minimum of 18:1 compared to the current standard of 25:1. Also, there is talk of a phase-in period and “bi-furcation” for legacy versus new companies. Read More

Pending Watt Nomination Affected FHFA’s Loan Limit Direction?

The once deadlocked but now all-but-certain confirmation of Rep. Mel Watt, D-NC, to be the new director of the Federal Housing Finance Agency has left industry observers uncertain as to the continued policy direction of the FHFA. Based on client conversations, Compass Point Research & Trading Analyst Isaac Boltansky speculated in an analysis that the FHFA’s announcement last week to retain its baseline maximum conforming loan limit was influenced by Watt’s widely expected, pending confirmation. Read More

FHFA May Pick CSP Chairman Before It Fills CEO Position

The Federal Housing Finance Agency may be close to picking a chairman to head the common securitization platform project, which still does not have a chief executive officer, according to one source briefed on the matter. This official, who requested his name not be used, said there are two prospects for the chairman slot, “but FHFA still hasn’t decided on one.” The CSP, formally known as Common Securitization Solutions LLC, is a joint venture equally owned by Fannie Mae and Freddie Mac. CSS recently signed a lease on office space in Bethesda, MD, just outside the District of Columbia. Read More

House Bill Would Open FHLBanks To Privately-Insured Credit Unions

Legislation that would allow privately-insured credit unions access to the Federal Home Loan Bank system has been introduced in the House.Introduced last week by Rep. Steve Stivers, R-OH, and Rep. Joyce Beatty, D-OH, H.R. 3584, the Capital Access for Small Community Financial Institutions Act of 2013, would amend the Federal Home Loan Bank Act to allow privately insured credit unions to be eligible for FHLBank membership. Read More

BofA Offers $404 Million To Settle Freddie Buyback Claims

Freddie Mac this week racked up another settlement in the GSE’s recent ongoing series of mortgage buyback deals when Bank of America announced it will pay $404 million to settle repurchase obligations tied to loans sold between 2000 and 2009. The payment also compensates Freddie for “certain past losses and potential future losses relating to denials, rescissions and cancellations of mortgage insurance,” the GSE said. The amount is less $13 million of repurchases already made. Read More

ResCap Deal With FHFA Indicates More MBS Settlements to Come

A Manhattan federal court this week approved a proposed settlement between Residential Capital and the Federal Housing Finance Agency that both clears the way for the former conduit to exit bankruptcy and brings the FHFA one step closer to completing its massive legal action against some of the nation’s top financial institutions.Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York approved the agreement, which is tied to a settlement the FHFA reached with Ally Financial, ResCap’s former parent, in late October. Read More

Administration’s Eminent Domain ‘Wait and See’ Blasted by Senators

A group of four senators has asked the Obama administration and regulators to reject plans by municipalities to use eminent domain to acquire underwater performing mortgages, warning of a dire impact upon the entire mortgage lending space if such a proposal takes root. In a letter dispatched last week to Treasury Secretary Jack Lew and Housing and Urban Development Secretary Shaun Donovan, the bipartisan quartet of senators expressed their dismay that the administration “has been largely silent” on Richmond, CA’s proposal to seize performing mortgages, then refinance them into an FHA product. Read More

FHFA Notes ‘Progress’ Made in Fannie, Freddie Strategic Goals

Fannie Mae and Freddie Mac have finished the underwriting reviews of mortgages they acquired prior to their takeover by the federal government in 2008 and have now recovered more than $18 billion in restitution for breaches of selling representations and warranties, according to a new “progress” report from the Federal Housing Finance Agency. The GSE regulator notes that Fannie and Freddie have each executed multiple risk-sharing transactions, beating their mandated goal of $30 billion. The two also have achieved the Conservator Scorecard Objective of gradually reducing the less-liquid portions of their retained portfolios, according to the Finance Agency’s report. Read More

FHFA Loosens Seattle FHLB’s Consent Order Restrictions

The Federal Home Loan Bank of Seattle announced that its regulator, the Federal Housing Finance Agency, has amended the Bank’s consent order in keeping with its improved financial performance. In October 2010, the FHFA directed the Seattle Bank to implement steps to stabilize its business, improve its capital classification and return to normal operations. Read More

Experts: Remove GSEs From Gov’t Control to Ensure Reform

Reform-minded lawmakers should move with all deliberate speed to restructure, recapitalize and remove Fannie Mae and Freddie Mac from the government’s hands or risk the taxpayers’ stake in the mortgage market, experts told members of the Senate Banking, Housing and Urban Affairs Committee. The committee’s hearing prior to the Thanksgiving break focused on when and how to terminate the charters of the two government-sponsored enterprises, as well as whether current revenue held by Fannie and Freddie should be used to offset the cost of the new system. Read More

Enterprise Endnotes

Freddie Rescinds Fraud Training Requirement. Freddie Mac has withdrawn a requirement announced in September mandating fraud training in Bulletin 2013-13, issued Nov. 15. Freddie had required that seller/servicers provide third-party vendors retained to perform functions relating to origination and servicing of mortgages with training on fraud prevention, detection and reporting. The GSE decided to revisit the issue. In addition, the bulletin updates payment history verification requirements for manually underwritten mortgages, and announces that eligibility requirements applicable to higher-priced mortgage loans, previously announced in August, are applicable to higher-priced covered transactions (as defined in the Consumer Financial Protection Bureau’s ability-to-repay/qualified mortgage rule) and not solely to HPMLs. Read More

GSE MBS Business Activity Drops Monthly, Year-to-Date In November

Fannie Mae and Freddie Mac issued $58.7 billion in single-family mortgage-backed securities during the month of November, a 13.4 percent decline from October but a 4.8 percent drop for the first 11 months of 2013, according to a new Inside The GSEs analysis. Read More

Latest Imf News

More Imf News

Featured Data

More Featured Data

Featured Reports

More Latest Reports

Featured Poll

As homeowner equity continues to build, more and more lenders are launching home equity lending products. Are you thinking of joining this market?

View Results