Tag Archives: FHFA

Changes announced Friday to the Home Affordable Modification Program (HAMP) are expected to extend relief to a larger share of struggling homeowners as well as renters. One of the key adjustments centers around principal reductions. To encourage investors to agree to the principal reducing modification currently available through HAMP, Treasury is tripling incentives for such restructurings, paying from 18 to 63 cents on the dollar, and extending this same incentive to Fannie Mae and Freddie Mac, who have previously opted not to participate in HAMP's principal writedown option.

Data released this week by the Federal Housing Finance Agency (FHFA) show purchase prices of homes backing mortgages that have been sold to or guaranteed by Fannie Mae and Freddie Mac rose 1.0 percent between October and November. The agency's index has recorded sporadic ups and downs throughout the year. For the 12 months ending in November, the net effect is a decline in property values of 1.8 percent. FHFA says prices are now roughly the same as in February 2004.

The Federal Housing Finance Agency (FHFA) says as of June 30, 2011, Fannie Mae and Freddie Mac held nearly 3 million first lien mortgages in which the borrower owed more on the loan that the home was worth. FHFA estimates principal forgiveness for all of these mortgages would require funding of almost $100 billion to pay down the loans to the value of the homes securing them. Members of Congress have questioned FHFA's reasoning for excluding principal forgiveness from the menu of loss mitigation tools available to the GSEs.

Principal reductions - the merits of which have been debated strongly in recent years - are gaining support from lawmakers. Two congressmen are pushing to subpoena the Federal Housing Finance Agency (FHFA) for its analysis of the potential effects of principal reductions by the GSEs. Reps. Elijah Cummings of Maryland and John Tierney of Massachusetts sent a letter Wednesday to the chairman of the House Oversight Committee urging him to issue a subpoena after several failed attempts to procure the desired information from FHFA.

Government officials are in the process of reviewing 4,000-plus recommendations for turning repossessed homes into rental properties in order to trim the REO inventory held by federal housing agencies. The administration says it is pursuing potential ideas for REO-to-rental pilot programs ""with a sense of urgency,"" but two California firms don't plan to wait on the government's involvement. Carrington Holding Company and Oaktree Capital have partnered to buy up $450 million in REOs and convert them into rentals.

Michael Williams has decided to step down from his position as CEO and president of Fannie Mae, the GSE announced today. Williams was appointed to the top post at Fannie Mae in 2009, after the company was placed in federal conservatorship. He will continue as CEO and as a director until Fannie Mae's board names a successor, the GSE said in a statement. Edward DeMarco, head of the Federal Housing Finance Agency, praised Williams for his leadership through a turbulent time for the market and said his agency will work closely with Fannie Mae in the search for a new CEO.

The Federal Reserve is throwing its support behind a large-scale REO-to-rental program to address the oversupply of vacant homes and prevent property values from falling further. The Fed notes that in contrast to the market for owner-occupied homes, rental housing is strengthening. Officials say a government-facilitated program has the potential to help the housing market and improve loss recoveries. They've identified specific markets with large concentrations of vacant REOs, where bulk sales to investors make sense.

The two-month extension of the Temporary Payroll Tax Cut, signed by President Obama December 23, holds immediate implications for the GSEs. The law requires the Federal Housing Finance Agency (FHFA) to increase Fannie Mae's and Freddie Mac's guarantee fees by at least 10 basis points over the 2011 average for all single-family mortgage-backed securities. FHFA says the increase will be remitted to the U.S. Treasury, rather than retained as reserves by the two mortgage financiers.

Home prices in the U.S. decreased 0.2 percent on a seasonally adjusted basis in October, according to the Federal Housing Finance Agency's (FHFA) House Price Index released Thursday. On a yearly basis, prices were down 2.8 percent. The drop brings prices to levels seen in February 2004. Current prices are about 19.2 percent below their peak in April 2007. FHFA also revised the previous month's index, lowering the 0.9 percent increase reported for September to a 0.4 percent increase.

California Attorney General Kamala Harris is asking the court to force Fannie Mae and Freddie Mac to turn over information about their servicing, foreclosure, property leasing, and mortgage securitization activities in the state. Harris issued subpoenas to each of the GSEs last month, outlining 51 questions the attorney general wanted answered. Fannie and Freddie's regulator, however, has reportedly instructed the companies not to respond to the state's request.