Tag Archives: Freddie Mac

The GSEs have been under FHFA conservatorship since September 2008, at which time they needed a combined bailout of $187.5 billion from taxpayers in order to stay afloat and "preserve and conserve their assets and property and restore them to a sound financial condition so they can continue to fulfill their statutory mission of promoting liquidity and efficiency in the nation's housing finance markets," according to FHFA's website.

The U.S. House of Representatives voted on Thursday to pass an amendment eliminating the use of guarantee fees on mortgages backed by Fannie Mae and Freddie Mac to fund a controversial $47 billion transportation bill known as H.R. 22, or the Developing a Reliable and Innovative Vision for the Economy (DRIVE) Act

Freddie Mac’s risk-sharing initiatives include 16 STACR debt note offerings (including this one) and 11 Agency Credit Insurance Structure (ACIS) transactions since becoming the first agency to market credit risk transfer transactions with STACR and ACIS in the middle of 2013.

The loss will not cause Freddie Mac to need another draw from Treasury since it was only a fraction of the $1.8 billion net worth reserve the Enterprise has under the Preferred Stock Agreement, according to Layton. The dividends paid into Treasury by Freddie Mac remained unchanged at $96.5 billion, which is about $25 billion more than the $71 billion the Enterprise received in a taxpayer-funded bailout in 2008.

Watt said in a statement in July that the purpose of the pay raises was to "promote CEO retention, allow reliable succession planning, and ensure the continuity, efficiency and stability" at Fannie Mae and Freddie Mac. Watt's predecessor, Ed DeMarco, capped the GSE CEO pay at $600,000 a year more than three years ago after four years of conservatorship.

The National Community Reinvestment Coalition (NCRC), the National Association for the Advancement of Colored People (NAACP), and the League of United Latin American Citizens (LULAC) sent a letter to President Obama, calling on the Administration to end the conservatorships and recapitalize Fannie Mae and Freddie Mac.

With that expansion of the total mortgage portfolio came a drop of four basis points in the serious delinquency rate for loans backed by Freddie Mac, down to 1.41 percent—a year-over-year decline of more than half a percentage point, from 1.96 percent in September 2014.

But the success of programs like the Connecticut Avenue Securities (CAS) Series by Fannie Mae and Structured Agency Credit Risk (STACR) debt note offerings by Freddie Mac have ensured that credit risk transfer is not simply a passing trend, but the way of the future for the GSEs look to transfer more credit risk to private investors.

Robinson contends that despite posting record losses for 2007 and the first half of 2008, shortly before the government seized control of them, Fannie Mae and Freddie Mac were always capable of paying their debts and were never in danger of insolvency. The complaint contends that Fannie Mae and Freddie Mac took a relatively conservative approach to investing in mortgages during the years 2004 to 2007, the so-called “housing bubble,” during which many institutions were not conservative where the mortgage market was concerned.

"Buoyed by strong employment growth, housing supply is struggling to keep pace with demand, which is driving house prices higher," Kiefer said. "Fortunately, low mortgage interest rates are helping to keep homebuying affordable for some prospective homebuyers."