Tag Archives: Fannie Mae

Rep. Darrell Issa of California has sent a letter to the Federal Housing Finance Agency (FHFA) expressing his concerns and requesting information about an alleged deal between Fannie Mae and Bank of America. Issa references an August 10th report detailing a deal between Fannie and the bank in which the GSE reportedly purchased the mortgage servicing rights of 400,000 troubled loans for $500 million. Issa says the transaction is ""worrisome"" and appears to have shifted risk from BofA to Fannie Mae.

Several servicers remain below median performance level as of the first half of the year, as ranked by Fannie Mae's Servicer Total Achievement and Rewards (STAR) Program. Fannie Mae announced the STAR Program in February to measure servicers' success in providing sustainable solutions to distressed homeowners. The mid-year results released Wednesday by the GSE indicate that only four out of the 11 banks in Peer Group 1 are on track to receive at least a three-STAR rating at the end of the year.

The Senate Banking Committee held a hearing Tuesday on housing finance reform, the first of three housing-related hearings on the agenda this week. The issue of government guarantees for home mortgages came under some fire. One witness with the American Enterprise Institute in Washington, D.C. noted that without any change in policies and without any further increase in the GSEs' debt, the national debt will reach $30 trillion in 10 years.

Freddie Mac has rolled out a new standard for mortgage modifications that the GSE says will strengthen servicers' ability to support positive outcomes for financially distressed borrowers. It replaces Freddie Mac's classic modification. The ""Standard Modification"" is available to borrowers who don't qualify for the government's Home Affordable Modification Program (HAMP) and includes a trial period to help reduce re-default rates. It is part of the Servicing Alignment Initiative underway at the two GSEs.

President Obama's speech introducing his new Jobs Act included a pledge to refinance millions of home mortgages. Documents released since then by the White House and a key housing regulator reveal that the government-led refi push will indeed center around an overhaul of the Home Affordable Refinance Program (HARP). The administration says it intends to remove the barriers that exist in the current program to allow more borrowers to qualify as long as they have a history of making their payments on time.

Congressman Gary Ackerman of New York has sent a letter to House Appropriators urging them to extend the temporarily increased conforming loan limit that will otherwise expire October 1. Ackerman was joined by 36 members of Congress in his request. He suggested the conforming loan limit extension be built into the continuing resolution that will keep the federal government functioning when the new fiscal year begins next month. Private investors, though, are advocating for the loan limit increase to expire.

Housing got only a brief mention in President Obama's highly anticipated jobs speech Thursday night, but it was a pledge that some pundits say is a step in the right direction. Others say it's likely to have little impact. Obama told Congress his administration will work to refinance millions of homeowners' mortgages at today's record-low rates. It's expected the program will give borrowers who are underwater or have bad marks on their credit the opportunity to take out lower-rate, lower-payment loans.

At a congressional hearing Wednesday, witnesses voiced concerns about the government's participation in the mortgage market as well as the lack of transparency between servicers and investors. One analyst described the U.S. housing finance system, where the GSEs account for over 90 percent of new mortgages, as ""problematic."" Others said government is crowding out the private market with programs that make below-market-rate loans available to nearly all borrowers, and they advocated for the expiration of increased conforming loan limits.

For the first time in over a year neither Fannie Mae nor Freddie Mac are showing any downward movement in their seriously delinquent mortgage rates. Fannie's percentage of single-family loans at least three payments past due remained unchanged between the months of June and July at 4.08 percent. Freddie's increased one basis point to 3.51 percent. The Federal Housing Finance Agency says foreclosure prevention actions completed on loans held by the two mortgage financiers have declined for four consecutive quarters.

The Federal Housing Finance Agency's decision to pursue legal action against firms that sold residential mortgage-backed securities to Fannie Mae and Freddie Mac could potentially strain relationships between the GSEs and the companies named as defendants, many of whom still sell mortgages to Fannie and Freddie and service home loans held by the two mortgage financiers. Some of the financial firms have been forthcoming with pledges to aggressively defend themselves against the allegations and are disappointed by the fact that FHFA has taken to the courts.