Tag Archives: Freddie Mac

Home prices in the U.S. rose in the second quarter of 2010, according to the Federal Housing Finance Agency (FHFA). The regulator's purchase-only house price index (HPI) is calculated using sales price data from Fannie Mae- and Freddie Mac-acquired mortgages, and last quarter was the first time since Q2 2007 that the HPI posted a quarterly increase. The index was 0.9 percent higher on a seasonally adjusted basis in the second quarter than in the first quarter of 2010.

Taxpayers' tab for the government's $700 billion dollar bailout program continues to drop. New estimates from the Congressional Budget Office (CBO) put the cost of the controversial Troubled Asset Relief Program (TARP) at $66 billion. That's nearly $45 billion less than the agency's projection just five months ago. The agency's estimates for the bailout of Fannie Mae and Freddie Mac improved as well. Outlays for the two GSEs are expected to fall from $96 billion in 2009 to $41 billion this year.

Despite the continued efforts of mortgage giants Fannie Mae and Freddie Mac to find sustainable workouts for delinquent borrowers, the analysts at Standard & Poor's expect the GSEs' foreclosure inventories to continue to swell. The two companies have each already completed about 40 percent more workout volume during the first half of 2010 than they did in all of 2009. Still, the ratings agency says annualized loan workout activity (as a percentage of existing delinquent loans) remains less than half at both institutions.

Members of the U.S. House of Representatives are calling on President Obama and the GSEs' regulator to ""use all of [their] powers to recover money"" from companies that shifted losses on to Fannie Mae and Freddie Mac. They say legal action should be used to recoup funds from the underwriters of faulty mortgages and the issuers of underwater securities that have saddled Fannie and Freddie with hundreds of billions of dollars in bad loans and cost taxpayers almost $150 billion to date.

About 50 percent of the loans held by Fannie Mae and Freddie Mac come from the nation's four largest banks - Bank of America, JPMorgan Chase, Wells Fargo, and Citi. Lately, the GSEs have become more aggressive in forcing originators to buy back bad loans. Based on Fannie and Freddie's current ""distressed"" numbers (a combined $354 billion in delinquent mortgages and REOs), Fitch Ratings estimates that the big four could be on the hook to repurchase as much as $180 billion in nonperforming assets.

Mortgage interest rates dropped again this week, according to data released Thursday by Freddie Mac. The GSE says for yet another week, fixed-rate mortgages reached new record lows. Rates for 30-year mortgages are now averaging 4.42 percent, while 15-year fixed mortgages are at 3.90 percent. Amy Crews Cutts, Freddie Mac's deputy chief economist, says investors in long-term bonds appear confident that inflation will remain in check, which in turn has helped to push mortgage rates even lower.

The lowest mortgage interest rates in more than a half century have kindled a rise in refinancing activity among homeowners looking to reduce their debt and lower monthly payments. The Mortgage Bankers Association (MBA) reported Wednesday that its index for refinance applications jumped 17.1 percent last week, hitting its highest mark since May of last year. For the past two months, refinancing has accounted for more than 80 percent of conventional loan applications.

Will Fannie Mae and Freddie Mac still be here in three years? Or will they be replaced by a new federal mortgage agency? Or will the government begin a grand exodus from the housing market and leave the conveyance of the American Dream to the private sector? These were the questions addressed Tuesday at the administration's housing finance conference in Washington - a discussion that the Treasury says will help shape its proposal for the future of the housing finance system, including the structure of the nation's two largest mortgage companies.

The Federal Housing Finance Agency (FHFA) has proposed the establishment of an Office of the Ombudsman to field complaints related to FHFA's regulations and supervision. The Office of the Ombudsman would be responsible for considering grievances and appeals from entities overseen by FHFA, including Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, as well as any person that has a business relationship with a regulated entity or the Office of Finance.

The Federal Housing Finance Agency wants to restrict Fannie Mae and Freddie Mac from purchasing mortgages with private transfer fee covenants, also referred to as Wall Street home resale fees. These fees are sometimes worked into home purchase contracts, and require that a percentage of the sale price be paid to the original owner of the property every time the property is sold, typically for 99 years. FHFA says ""the fees fund purely private streams of income for select market participants and do not benefit homeowners.""