FHFA

Browse articles from all of our Newsletters related to FHFA.

August 17, 2018 - Inside The GSEs

GSE Roundup

Fannie’s Eighth RPL Sale. Fannie Mae began marketing its eighth sale of reperforming loans this week. It consists of approximately 18,400 loans, having an unpaid principal balance of $3.59 billion, and is available for purchase by qualified bidders. Reperforming loans are mortgages that were previously delinquent, but are performing again because payments ....


August 17, 2018 - Inside The GSEs

FHFA Issues Guidance on Federal Home Loan Bank Advance Pricing

New guidance issued to the Federal Home Loan Banks focuses on making sure the banks are properly pricing the funding they offer. The Federal Housing Finance Agency said the banks have introduced a diverse array of advance products to meet the changing needs of their members over the years. In a recent advisory bulletin, the regulator directs the banks to be certain that the cost to issue debt, plus administrative and operating costs, does not surpass the minimum ...


August 17, 2018 - Inside The GSEs

More Oversight of GSE Multifamily Seller/Servicer Relationships

As the GSEs’ share of the multifamily market continues to grow, the Federal Housing Finance Agency wants them to take more precautions when selecting and monitoring their multifamily seller/servicers. The regulator issued an advisory bulletin this week outlining expectations for Fannie Mae and Freddie Mac to institute proper controls and perform monitoring to identify and manage risks associated with ....


August 17, 2018 - Inside The GSEs

Fannie, Freddie Could Need $77.6B Bailout in Extreme Economic Crisis

The Federal Housing Finance Agency’s recent stress test results show that the GSEs could need up to $77.6 billion in a severe economic crisis. But quarterly earnings continue to show a profitability that cancels out the need for a bailout. Required annually by the Dodd-Frank Act, the test of severely adverse scenario is based on Fannie Mae and Freddie Mac portfolios as of Dec. 31, 2017....


August 17, 2018 - Inside The GSEs

List of Clarifications Needed Prior To Single Security Launch

With the launch of the single security less than a year away, there are some uncertainties that Fannie Mae, Freddie Mac and the industry expect to have cleared up before making the switch next June. They range from ensuring fungibility between Fannie and Freddie securities, to creating more regulatory clarity, preparing third parties and determining how the Securities Industry and Financial Markets Association will consider the new security in the to-be-announced market....


August 17, 2018 - Inside The GSEs

Watt Faces Controversy in Final Months as FHFA Director

Federal Housing Finance Agency Director Mel Watt has been under a lot of scrutiny as his tenure winds down by yearend. Some observers claim the FHFA is allowing the GSEs to introduce pilot programs that conflict with the primary market. There is a sexual harassment allegation against Watt. And he is reportedly being investigated for intimidating the agency’s inspector general....


August 17, 2018 - Inside The GSEs

Mayopoulos at Center of Recent IG Management Alert

A heavily redacted Federal Housing Finance Agency Inspector General management alert about credit scores, published in late July, involved Fannie Mae CEO Timothy Mayopoulos, sources confirm. The 15-page report only mentioned that a “senior executive” was involved in a conflict-of-interest administrative review pertaining to alternative credit scores. It said that the executive did not disclose “critical information” about potential conflicts of interest arising from a personal relationship. Based on the IG report, it seems that Mayopoulos did disclose and recuse himself from business decisions related to alternative credit scores. But the IG report appears to take issue with the fact that he did not “fully disclose” the information.


August 16, 2018 - Inside Mortgage Finance

FHFA Details Requirements for Setting Minimum Pricing for FHLBank Advances as Some Become More Complex

The Federal Home Loan Banks are offering a growing array of complex advance products and the Federal Housing Finance Agency wants to make sure they price the funding appropriately.


August 9, 2018 - Inside Mortgage Finance

Fannie/Freddie Regulator is Drawing More Attention in Waning Months of Watt’s Tenure

Mel Watt isn’t likely to ride quietly off into the sunset as his term as director of the Federal Housing Finance Agency draws to a close at the end of this year.


August 3, 2018 - Inside The GSEs

FHFA-OIG Examines Decision-Making Authority Changes

The Federal Housing Finance Agency Office of Inspector General said the GSE boards’ undelegated authority has changed significantly over the past five years. Some items like seller/servicer master agreements no longer need FHFA approval. In a white paper published last week, the IG examined the Federal Housing Finance Agency’s letters of instruction (LOI) to the boards of Fannie Mae and Freddie Mac. The letters were initiated at the start of the conservatorship in 2008, revised in 2012 and updated again in December 2017. They are sent to the GSE boards to define and...


August 3, 2018 - Inside The GSEs

Treasury Supports GSE Appraisal Waivers, Makes Recommendations

Fannie Mae and Freddie Mac have the Treasury Department’s support when it comes to appraisal waivers, according to a newly published report this week from the Treasury on nonbank financials, fintech and innovation. A portion of the report focused on updating activity-specific regulations under the realm of lending and servicing. Treasury explained that it supports the GSEs’ efforts to implement standardized appraisal reporting, their adoption of proprietary electronic portals to submit appraisal forms and the GSEs’ limited adoption of appraisal waivers. The report acknowledged concerns from the appraisal industry but touted the benefits of using the waivers. “While Treasury acknowledges that


August 3, 2018 - Inside The GSEs

With Reform a Priority, White House Takes a Keen Interest in FHFA Job

The White House, according to industry insiders, has formed a small search team to help pick a successor to Federal Housing Finance Agency Director Mel Watt, whose tenure at the agency is imperiled because of recent sexual harassment allegations levied against him by an employee. Watt’s five-year term is scheduled to end in early January 2019, but it’s possible he might be forced from the position much sooner or decide to step down on his own. The 72-year-old regulator – a former Democratic Congressman from North Carolina – has declined to discuss the matter, but issued a statement through the FHFA’s public relations department saying he’s “confident that the investigation currently in progress will ...


August 2, 2018 - Inside Mortgage Finance

Lobbying on the GSE Issue Moves from Congress to the Executive Branch. GOP Leader May Offer Bill Anyway

Although Rep. Jeb Hensarling, R-TX, has vowed to introduce Fannie Mae/Freddie Mac reform legislation sometime this fall, industry stakeholders have shifted their focus to working with the executive branch on the issue. Trade groups have given up on the idea of Congress coming up with a workable solution, believing that change will occur administratively with the Treasury Department working in tandem with the Federal Housing Finance Agency. This belief covers not only ...


August 2, 2018 - Inside Mortgage Finance

An Early Departure by FHFA Director Watt Could Hasten Changes in Secondary Market

The mortgage industry this week was busy trying to handicap what immediate changes might be forced upon the secondary market in the event Federal Housing Finance Agency Director Mel Watt leaves the agency before his term ends in January. An early departure became more likely in the wake of sexual harassment allegations levied against Watt by an agency employee. The allegations surfaced last Friday in a report by Politico. Watt is widely viewed as an effective regulator whose ...


July 26, 2018 - Inside Mortgage Finance

FHFA Halts Alternative Credit-Score Review, No Decision In 2018 as Focus Shifts to Defining Credit Score Standards

After months of gathering and reviewing comments on credit-scoring options, the Federal Housing Finance Agency abruptly called off its plan to announce new guidelines for Fannie Mae and Freddie Mac by the end of this year. The two major credit-score providers aren’t happy with the news.


July 20, 2018 - Inside The GSEs

GSE Roundup

Mnuchin Wants GSE Reform in Next Congress. Treasury Secretary Steven Mnuchin is worried about Fannie Mae and Freddie Mac expanding their already large role in the mortgage market and said he’s not against taking administrative action absent a legislative solution for reforming the mortgage giants. During the secretary’s annual testimony to the House Financial Services Committee late last week, Mnuchin reiterated his position in wanting lawmakers to reform the GSEs and said he expects that to happen in the next Congress. “This is something that I am determined, in the next Congress, should be a major focus of ours, hopefully on...


July 20, 2018 - Inside The GSEs

KBW Speculates EPMI Cap Requirements Indicator of PMIERs

Analysts speculate that the new capital requirements expected for private mortgage insurers will be higher than current standards. Reinsurer capital requirements under Fannie Mae’s new Enterprise-Paid Mortgage Insurance pilot may be an indicator of upcoming private mortgage insurance eligibility requirements (PMIERs), according to analysts with Keefe, Bruyette & Woods. KBW said with PMIERs expected to be finalized around the time the EPMI starts, it’s possible that reinsuer capital standards could be similar to PMIERs 2.0. “If the capital requirements for reinsurers end up being the same as PMIERs 2.0, we estimate the capital requirements for the MIs would be roughly 10 percent higher than under PMIIERs 1.0,” said KBW.


July 20, 2018 - Inside The GSEs

AEI Panelists Said GSEs Growing Footprint Instead of Shrinking

The GSEs are picking winners, not helping to level the playing field and they are blurring the lines between primary and secondary market activities, according to panelists expressing concern over the mortgage giants’ growing market share. As Fannie Mae and Freddie Mac continue to introduce and test pilot programs, the industry questions why the GSEs appear to be expanding their activities instead of shrinking them. During a panel sponsored by the American Enterprise Institute late last week, six participants from several think tanks and the mortgage industry discussed some of the alleged...


July 20, 2018 - Inside The GSEs

Milken Examines Complications with DTS in Affordable Housing

The Milken Institute said the GSEs’ duty-to-serve policy is more complicated than other affordable housing reform issues because it forces the secondary market to boost lending in the primary market and assumes those private firms are underperforming. The conservative think tank published a paper this week authored by Michael Stegman and Phillip Swagel on the role of duty-to-serve in which it examined the policy and its potential impact on the mortgage market. While DTS currently encompasses manufactured housing, rural housing and affordable housing preservation, Milken said housing finance reform debates have centered on creating a DTS that includes areas beyond those three targets.


July 20, 2018 - Inside The GSEs

FHFA Structure Unconstitutional, Treasury Sweep Completely Legal

A federal court held this week that the single-director structure of the Federal Housing Finance Agency, headed by Director Mel Watt, violates the constitution. The ruling in Collins v. FHFA was handed down in Texas by a three judge-panel for the U.S. Court of Appeals for the Fifth Circuit. It represents the most recent major ruling in a number of Fannie Mae and Freddie Mac shareholder cases filed against the federal government. “We found, after an in-depth examination, that the FHFA is excessively insulated from executive branch influence and is, therefore, structured in violation of the Constitution,” the judges state in their 83-page ruling. And although Congress can create an independent agency, the court determined that elected officials cannot insulate...


July 20, 2018 - Inside MBS & ABS

Fifth Circuit Court Rules FHFA Single-Director Structure Violates Constitution but Treasury Sweep Was Legal

The Federal Housing Finance Agency’s structure was deemed unconstitutional this week by the U.S. Court of Appeals for the Fifth Circuit. And in another rejection for Fannie Mae and Freddie Mac shareholders, the court ruled the Treasury net worth sweep was within the agency’s power.


July 20, 2018 - Inside MBS & ABS

Concerns Resurface About Boundaries of Secondary Market Activity as New Era in Supervision Looms

As the term of Federal Housing Finance Agency Mel Watt winds down, the mortgage industry is getting more vocal about perceived shortcomings in the oversight of the government-sponsored enterprises, including the blurring of lines between the primary and secondary markets.


July 12, 2018 - Inside Mortgage Finance

FHFA Worries About Unintended Consequences of California’s Tough New Privacy Law for Mortgages

The Federal Housing Finance Agency and mortgage lender groups are raising concerns about the new California data privacy law set to take effect in 2020, saying it doesn’t take into account the impact on mortgage lending.


July 6, 2018 - Inside The GSEs

FHFA Anxious About Impact of New California Privacy Bill on Mortgages

Routine financial transactions involving mortgages could face extreme headwinds under a new consumer data privacy bill passed last week in California. So much so that it prompted the Federal Housing Finance Agency to urge state lawmakers to consider the implications of the legislation to the mortgage market. The controversial consumer data privacy bill passed on June 28. It would allow consumers to opt-out of any type of data collection and give consumers the right to have any personal information deleted.


Poll

With mortgage production down noticeably this year from 2017, how many lenders might disappear via M&A or failure during the next 12 months?

10% or less. It’s not that bad out there.

17%

11% to 25%. It’s a challenging market.

48%

25% to 40%. It’s going to be very ugly.

24%

No opinion.

11%