Tag Archives: Fannie Mae

Rep. Gary Miller of California is introducing a new idea for GSE reform - a merger of Fannie Mae and Freddie Mac. The bill, drafted by Miller and co-sponsored by Rep. Carolyn McCarthy of New York, suggests the resulting entity would purchase mortgages and sell them to investors as government-backed securities. According to Miller, the new corporation would be privately capitalized but not privately owned, and would be limited to a market share of no more than 50 percent.

Prospect Mortgage, a California-based lender authorized to provide HomePath financing for Fannie Mae, now offers the HomePath Renovation Mortgage. HomePath is Fannie Mae's vehicle for the marketing and disposition of REO properties the GSE has acquired through foreclosure. The HomePath Renovation financing tool allows homebuyers to purchase a Fannie Mae HomePath property and include up to $35,000 for non-structural repairs and restoration as part of the loan.

Seriously past-due home mortgages continue to decline for the nation's largest mortgage company, continuing a 15-month path of descent. Fannie Mae says the share of single-family loans it holds that are 90 or more days past due or in foreclosure fell 8 basis points to 4.19 percent in April, and then dropped another 5 basis points to 4.14 percent in May. Fannie Mae says servicers completed modifications on 16,419 of its loans in May. For the first five months of the year, loan modifications total 84,133.

Freddie Mac has issued a bulletin to servicers announcing changes to the company's default management requirements. The move is part of the Servicing Alignment Initiative announced by the Federal Housing Finance Agency in late April to bring both Fannie Mae's and Freddie Mac's procedures for handling past-due mortgages in line with one another. Freddie also alerted servicers that it plans to roll out a new modification solution for borrowers who defaulted on previous modifications and who are ineligible for HAMP.

California-headquartered Kinecta Federal Credit Union now provides its brokers and business partners with HomePath mortgages from Fannie Mae. HomePath is the GSE's venture for marketing and selling REO properties, and it offers special financing terms for the purchase of select Fannie Mae-owned properties. Currently, Kinecta is the only approved credit union in California and one of only five in the nation to offer HomePath mortgages.

Bank of America will pay investors $8.5 billion to compensate them for Countrywide's dealings years before the subprime lender was acquired by BofA. The settlement resolves nearly all of BofA's first-lien repurchase exposure from Countrywide-issued bonds. It involves 530 trusts and $424 billion in securities. The company has also agreed to implement certain servicing changes, which will cost some $400 million. BofA says the cleanup will leave it with a loss for the second quarter, but the market has responded positively to the news.

Carrington Property Services, LLC, a residential asset management company, recently restructured its operations to increase its capabilities in residential asset management services, a move expected to benefit lenders and servicers. The company has realigned its operations into three primary divisions - rental, REO administration, and centralized services.

Michigan's Oakland and Ingram Counties have filed lawsuits against Fannie Mae and Freddie Mac, alleging the GSEs avoided paying the state property-transfer tax on thousands of REO homes by claiming false exemptions. Oakland County says there are hundreds, perhaps thousands, of deeds recorded by Fannie and Freddie where they claimed exemptions. Officials maintain the exemptions cost Oakland County at least $250,000 per year.

According to an analysis authored by a former chief economist of Freddie Mac and a real estate economics professor at University of Aberdeen, responsibility for the failure of Fannie Mae and Freddie Mac falls directly on regulators and indirectly on their political overseers. The two analysts argue that the U.S. government's involvement in housing finance nurtured the excessively risky loans that fueled the housing bubble of the last decade and resulted in the systemic collapse of the global financial system.

The debate over what constitutes a Qualified Residential Mortgage (QRM) is heating up, with a pivotal argument centered around whether or not the proposed QRM stipulations will actually lower the risk of default. In one corner you have the handful of regulators charged with putting the definition of QRM into the rule book, and in the other corner you have just about everybody else, with consumer advocates joining mortgage bankers in a rare showing, and congressional lawmakers standing firmly alongside them.