Tag Archives: Freddie Mac

Fixed mortgage rates started the year at or near their all-time record lows. Data from Freddie Mac shows the interest rate on a 30-year fixed mortgage averaged 3.91 percent for the week ending January 5, 2012, matching the record low set just two weeks earlier. This marks the fifth consecutive week the 30-year rate has come in below the 4.00 percent mark. The 15-year fixed-rate is averaging 3.23 percent, just two basis points above its all-time low hit in December.

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.

Mortgage rates will likely remain very low, at least through mid-2012, according to Freddie Mac. Rates on 30-year conforming mortgages have hovered around 4.0 percent or lower for the past quarter. The GSE says that in large part due to the Federal Reserve's program for extending the maturity date for mortgage securities it holds. This program is expected to continue through the middle of next year and should keep fixed rates for 15- through 30-year mortgages elatively low during the first half of the year.

Sen. Scott Brown of Massachusetts says the civil lawsuit filed by the Securities and Exchange Commission (SEC) last week against six former executives of Fannie Mae and Freddie Mac ""does not go nearly far enough."" Brown is pressing the Department of Justice and the SEC to immediately open criminal investigations into Fannie and Freddie. The senator says authorities need to take a closer look at the GSEs' business dealings prior to the housing collapse and their disclosure of subprime mortgage holdings.

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.

Mortgage interest rates continue to head south. Freddie Mac reported Thursday that the average 30-year fixed-mortgage rate sank to 3.91 percent this week, setting a new all-time record low. Adjustable-rate mortgage (ARM) products also hit new record lows. The 15-year fixed rate settled in to match last week's historic low at 3.21 percent. To put the declines into perspective, Freddie says today's homebuyers are paying over $1,200 less per year on a $200,000, 30-year fixed-rate loan than they would have just 12 months ago.

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.

At the height of the financial crisis in 2008, Fannie Mae and Freddie Mac held $2 trillion in high-risk subprime loans, amounting to 42 percent of their single-family portfolios, according to Edward Pinto of the American Enterprise Institute. Pinto, who served as chief credit officer for Fannie Mae until the late 1980s, arrived at this number by relying on data from the Securities and Exchange Commission (SEC), which filed a lawsuit against six former GSE executives for fraud.

Six former executives at Fannie Mae and Freddie Mac are now facing securities fraud charges for making misleading statements about the companies' holdings of subprime loans between March 2007 and August 2008. The Securities and Exchange Commission (SEC) alleges they fed the markets false information about the amount of risk on each company's books. Both GSEs entered into non-prosecution agreements with the SEC and have agreed to cooperate in the litigation against their former executives.

It's now more affordable than ever to take out a home loan. According to Freddie Mac's nationwide survey, the 30-year fixed rate this week matched its average all-time record low of 3.94 percent, while the 15-year rate sank to a new low of 3.21 percent. The 5-year adjustable-rate mortgage also set a new all-time low at 2.86 percent. Included in Freddie Mac's report this week is a breakdown of average mortgage rates by region for the various loan products covered in the GSE's study. Rates are lowest in the West.