Tag Archives: Fannie Mae

A new report from the watchdog for the Federal Housing Finance Agency (FHFA) charges that the department isn't doing enough to make sure companies doing business with the GSEs are adhering to consumer protection laws. The Office of the Inspector General for FHFA (FHFA-OIG) released an audit report Tuesday examining the agency's oversight of Fannie Mae and Freddie Mac's monitoring of businesses that sell and service loans.

Representation and warranty costs remained elevated in the fourth quarter among top originators, though new and outstanding repurchase claims were mixed for large mortgage companies, according to a recent analysis from KBW. The GSEs continued to drive much of the new and outstanding repurchase claims, with Fannie Mae repurchases totaling $1.9 billion in Q4, down from $2.02 billion in Q3, while Freddie Mac repurchases totaled $638 million, down from $819 million, the report revealed.

Amendments to the Senior Preferred Stock Purchase Agreement (PSPA) between Treasury and the GSEs, agreed to in August 2012 may lead to faster and greater returns to taxpayers but could also potentially leave the enterprises with largely illiquid portfolios, according to a report from the Federal Housing Finance Agency's Office of Inspector General (FHFA OIG). The amendments addressed several terms of the PSPAs. One of the most notable changes was the change in dividend structure.

Speaking before the House Financial Services Committee at a hearing Tuesday morning, Federal Housing Finance Agency (FHFA) Acting Director Edward DeMarco presented his take on sustainable housing finance and what the future of housing finance might look like. DeMarco began his testimony at Tuesday's hearing, ""Sustainable Housing Finance: An Update from the Federal Housing Finance Agency on GSE Conservatorships"" by reiterating his goals for the GSEs this year. He then went on to describe three possible scenarios for the future of the housing finance system and the government's role in that system.

Three industry analysts gave testimony before a Senate committee on housing finance reform Tuesday. While all three experts expressed support for more private capital and less government involvement, the proposed degrees of government support varied. Mel Martinez, co-chair of the Bipartisan Policy Center's Housing Commission, recommended the elimination of the GSEs over a period of about 5-10 years and the creation of a limited, government guarantee called the ""Public Guarantor.""

A coalition of nine state attorneys general is petitioning the national government to replace Federal Housing Finance Agency (FHFA) Acting Director Edward DeMarco. The coalition charged DeMarco with positioning Fannie Mae and Freddie Mac as a ""direct impediment to our economic recovery"" and called for his replacement in a joint letter to the president, the Senate majority leader, and the Senate minority leader Friday. The attorneys' general complaint stems from DeMarco's refusal to allow the GSEs to engage in principal reductions for struggling and underwater homeowners.

Zillow and Pulsenomics surveyed a nationwide panel of 118 economists, real estate experts, and investment and market strategists to get their thoughts on future home values and housing market policies. On average, the panel forecasts price growth of 4.6 percent in 2013 and 4.2 percent in 2014. More moderate growth averaging 4.1 percent is expected to follow into 2017. The panel also responded to questions on refinance options for underwater borrowers, with the majority expressing support for proposals that would allow certain underwater borrowers to refinance

According to FHFA, nearly 1.1 million HARP refinances were completed in 2012, bringing total volume to 2.2 million since the program's implementation in April 2009. The top five states for HARP refinances (since 2009) are California (which has reported 301,327 refinances under the program), Florida (175,686), Illinois (147,252), Michigan (144,709), and Arizona (106,387). In December, 18 percent of HARP refinances for underwater borrowers were for 15- and 20-year mortgages, which build equity faster than the traditional 30-year mortgage.

Fannie Mae and Freddie Mac are at risk of losing billions as a result of fluctuations in interest rates, according to a white paper from the Federal Housing Finance Agency (FHFA) Office of Inspector General (OIG). According to the OIG's paper, an increase of just 1 percentage point in interest rates could cause the GSEs to lose nearly $2 billion in the fair value of their assets. To protect against interest rate risks, the OIG outlined its own suggestions, one of which included the use of derivatives.

The goal of attracting private capital into the mortgage market is at the center of discussions throughout the industry and the government. Thus far, ""efforts by the Federal Housing Finance Administration and other federal agencies to provide incentives for the creation of a vibrant private mortgage securitization market have been largely unsuccessful,"" according to Fitch Ratings. However, the ratings agency does see some promise in a couple of FHFA's goals.