Browse articles from all of our Newsletters related to FHFA.

June 15, 2018 - Inside MBS & ABS

FHFA Proposes Capital Regime for Fannie and Freddie Based on Framework the GSEs Are Now Running On

The Federal Housing Finance Agency this week unveiled a proposed rule on capital standards for Fannie Mae and Freddie Mac, acknowledging that the rule would not be imposed on the two government-sponsored enterprises as long as they’re in conservatorship.

June 8, 2018 - Inside The GSEs

FHFA Capital Rule Proposal Not a Recap Plan, Will Seek Input

The Federal Housing Finance Agency plans to propose a new risk-based capital rule for the GSEs based on current operations to replace the old Office of Federal Housing Enterprise Oversight capital regulation. But just like the OFHEO rules, the proposed ones will be suspended as long as Fannie Mae and Freddie Mac are in conservatorship. Having a capital framework is useful when it comes to evaluating business decisions, according to FHFA Director Mel Watt. But he was quick to emphasize that the proposal is not based on some grand scheme to promote recapitalizing the GSEs. In fact, it’s largely an exercise that Watt said is...

June 8, 2018 - Inside The GSEs

Will Mel Watt’s Eventual Successor Wear Two Hats, Like Mulvaney?

Industry insiders are continuing to play the speculation game regarding who might replace Mel Watt as director of the Federal Housing Finance Agency, a position that holds immense power given the role Fannie Mae and Freddie Mac play in the housing market. So far, analysts and lobbyists have identified a handful of potential candidates who might replace the director when his five-year term ends early next year, including Treasury counselor Craig Phillips; Mark Calabria, chief economist to Vice President Mike Pence; and Michael Bright, EVP of Ginnie Mae, among others. Another candidate who has been mentioned is Comptroller of the Currency Joseph Otting, who was sworn into that post in late November of last year.

June 1, 2018 - Inside MBS & ABS

FHFA to Propose New Fannie Mae, Freddie Mac Capital Rules for Decision-Making, Transparency Purposes

In what is largely an intellectual exercise, Federal Housing Finance Agency Director Mel Watt said last week that the agency will propose a new risk-based capital rule for Fannie Mae and Freddie Mac even though it won’t apply while they’re in conservatorship.

May 31, 2018 - Inside Mortgage Finance

FHFA’s Annual Report to Congress Cites Need to Improve Management and Processes at the GSEs

The Federal Housing Finance Agency said it is most concerned about whether the government-sponsored enterprises are resilient and able to quickly recover from a disaster. In the agency’s annual report to Congress released last week, the regulator listed a number of management and supervisory concerns spotted by FHFA examiners in 2017.

May 25, 2018 - Inside The GSEs

GSE Roundup

Treasury Official Sees Major Impact from Single Security. A key Treasury Department official suggested that issuers of non-agency MBS may someday participate in the common securitization platform being developed by Fannie Mae and Freddie Mac. Craig Phillips, counselor to the Treasury, said the industry has made a lot of progress toward the launch of the single security that is scheduled for June 2019. “Industry preparedness is about an eight or nine on a scale of 10,” he said during remarks at this week's secondary market conference sponsored by the Mortgage Bankers Association in New York. Phillips characterized the...

May 25, 2018 - Inside The GSEs

FHFA Seeks Industry Feedback on Collecting Information on AMCs

The Federal Housing Finance Agency is seeking feedback regarding the level of paperwork burden placed on it when it comes to making sure that appraisal management companies meet the minimum reporting and record keeping requirements. A 2015 regulation made it mandatory that states with appraisal management companies, intermediaries between appraisers and lenders, establish a minimum registration and supervision program. And within that requirement, states are to review and approve or deny any application for registration.The FHFA noted that this burden is divided equally among the Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, the Board and the FHFA.

May 25, 2018 - Inside The GSEs

New Fannie Mae, Freddie Mac Shareholder Lawsuits Filed

GSE shareholder litigation activity continues into mid-year with two new cases being filed in the past week. Joshua Angel, a corporate restructuring lawyer and owner of junior preferred stock, filed a lawsuit this week to sue Fannie Mae, Freddie Mac and their respective board of director members who were serving on Aug. 17, 2012, when the Treasury sweep was formalized. Angel seeks to recover damages from the defendants for his pro-rated share of the $10 billion dividend entitlement loss he and other junior preferred shareholders have incurred to date.

May 25, 2018 - Inside The GSEs

FHFA Language Access Plan Addresses Some Concerns

The GSEs recently released their plans to improve the mortgage process for borrowers who have a limited proficiency of English and some point to disclosures as being a critical element of the plan. The Federal Housing Finance Agency has asked Fannie Mae and Freddie Mac to identify language barrier obstacles for potential borrowers, and come up with possible solutions. The agency’s plan established milestones with start dates this year through 2020. Fannie and Freddie are spending the first half of 2018 defining roles and responsibilities for both a resource clearinghouse and a language access working group consisting of housing representatives to work with consumer groups that support LEP consumers.

May 25, 2018 - Inside The GSEs

FHFA Report to Congress Seeks Counterparty Oversight

The Federal Housing Finance Agency seeks oversight of counterparties that provide services to Fannie Mae, Freddie Mac and the Federal Home Loan Banks, according to its 2017 annual report to Congress published this week. In addition to reporting examination activity, the FHFA offers legislative recommendations. The agency discussed the regulated entities’ heavy involvement with third parties who provide “critical services” supporting the secondary mortgage market. The agency said this includes nonbank mortgage servicers for Fannie Mae and Freddie Mac. And while oversight of these counterparties is important to the safety and soundness of the GSEs, the FHFA argued that oversight can only happen now through contractual provisions.

May 25, 2018 - Inside The GSEs

Community Lenders Want Action Taken to Stop MI Volume Discounts

Community mortgage lenders want the Federal Housing Finance Agency to put an end to pricing disparities caused by mortgage insurers offering discounts to Fannie Mae and Freddie Mac lenders based on their size or volume. And they recommend doing so in the same manner the agency solved pricing disparities over guarantee fees. The Community Home Lenders Association wrote the FHFA last week requesting that Director Mel Watt investigate the practice that the trade group says has become more prevalent. CHLA said it puts small lenders and their borrowers at a disadvantage. As a result, some individual CHLA members are even boycotting private MIs that engage in volume discounts.

May 25, 2018 - Inside The GSEs

FHFA Still Monitoring Prepayment Speeds Ahead of UMBS

In an effort to get mortgage-backed securities investors comfortable with the upcoming launch of the uniform MBS, Fannie Mae and Freddie Mac are continuously monitoring their prepayment rates to make sure there’s no divergence between the two, according to the Federal Housing Finance Agency. The FHFA published its inaugural prepayment report this week, increasing transparency ahead of the launch of the UMBS in June 2019. The report will be released on a quarterly basis. With the UMBS, the FHFA wants to ensure that there’s general alignment on the prepayments and noted that consistency is important to the efficiency and liquidity of the secondary mortgage market.

May 25, 2018 - Inside MBS & ABS

FHFA Releases First Report Detailing How It Monitors GSE Prepayment Speeds in Preparation for the UMBS

The Federal Housing Finance Agency went into more detail this week about the steps it is taking to make sure Fannie Mae and Freddie Mac prepayment rates are fairly congruent. And when the difference between the GSEs’ prepayment rates spreads beyond two percentage points, it must be reported to the FHFA’s Single Security Governance Committee for an explanation and remedial actions.

May 24, 2018 - Inside Mortgage Finance

Community Lenders Urge FHFA to Investigate Reports of Private MI Pricing that Benefits Only Large Mortgage Lenders

It doesn’t look likely that the Federal Housing Finance Agency is going to take up a call by community mortgage lenders to look into allegedly unfair volume discounts made by private mortgage insurers to large mortgage lenders.

May 17, 2018 - Inside Mortgage Finance

FHFA Language Access Plan Addresses Some Industry Concerns, Creates Disclosure Questions

By the end of this year, Fannie Mae and Freddie Mac plan to create a clearinghouse of resources such as translated mortgage documents to help borrowers who have a limited proficiency of English.

May 11, 2018 - Inside The GSEs

Seventh Circuit Court Rules Treasury Sweep Not Illegal

Investors arguing that the net worth sweep was unjust hit a roadblock late last week when the Seventh Circuit Court ruled that they can’t claim GSE profits post-conservatorship.This latest ruling also led the Federal Housing Finance Agency to try to influence the outcome in similar cases against the agency. The shareholders sought to overturn a 2017 ruling in which a federal judge went against them and granted the government’s motion to dismiss the complaint. In this case, Christopher Roberts, et al., vs. the Federal Housing Finance Agency et al., similar to other shareholder complaints, investors argued that the...

May 11, 2018 - Inside The GSEs

Mel Watt’s Successor at the FHFA? The Guessing Game Begins

Mel Watt has a good seven months left on his term as director of the Federal Housing Finance Agency, but already the industry rumor mill is speculating on whom the White House might pick to replace him. So far, the names run the gamut – from “reasonable” picks such as Treasury counselor Craig Phillips or acting Ginnie Mae President Michael Bright, to some odd choices: former FHFA acting director Ed DeMarco or current House Financial Services Committee Chairman Jeb Hensarling, R-TX. Few in the industry buy the Hensarling choice except for the fact he’s an arch conservative, something President Trump likes in his appointees.

May 11, 2018 - Inside The GSEs

Think Tanks Say Treasury will Likely Take on Housing Finance Reform

The conversation on GSE reform has shifted heavily as we approach midyear, having gone from optimism on congressional legislation to discussions on administrative options. And two Washington, DC-based think tanks recently offered their thoughts on reform and both point to 2019. Treasury Secretary Steve Mnuchin said last week that housing-finance reform will not happen this year. Karen Petrou, managing partner with Federal Financial Analytics, called this the “death knell” for GSE reform in this Congress. And she added that he didn’t seem sorry to deliver it. “With Mel Watt’s term as Federal Housing Finance Agency director coming to a close, Treasury...

May 11, 2018 - Inside The GSEs

Fannie Mae and Freddie Mac Report Strong $7.2B Profit in 1Q

GSE earnings bounced back to a profitable status, as expected, in the first quarter, with Fannie Mae and Freddie Mac reporting a combined $7.2 billion profit. That number is up from the $9.4 billion earnings hit the GSEs took last quarter due to tax reform that went into effect in December 2017. [Includes one chart.]

May 11, 2018 - Inside MBS & ABS

Recent Ruling Shows FHFA Acted Within Its Powers In Treasury Sweep, Another Win for the Government

The Seventh Circuit Court shot down the chances of Fannie Mae and Freddie Mac shareholders reviving their Treasury sweep claims last week. Investors Christopher Roberts and Thomas Fischer argued that the preferred stock purchase agreement was illegal and robbed shareholders of their profits.

May 4, 2018 - Inside MBS & ABS

Price War on GSE Guarantee Fees Appeared to End in Early 2018 in Response to FHFA Directive on Targeted Returns

Competition between Fannie Mae and Freddie Mac on MBS guarantee fees appeared to play a role in Freddie’s surge in market share during the fourth quarter, but the price war seemed to ease up in 2018.


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