Tag Archives: Freddie Mac

S. 2036, also known as the Equity in Government Compensation Act of 2015,was initially scheduled to be voted on by the House in late October, but was postponed due to a hefty lineup of other legislation, including voting on a new Speaker of the House.

Obama Administration officials such as Treasury Secretary Jack Lew have warned in the last month that such a “recap and release” program for Fannie Mae and Freddie Mac would put the GSEs at risk of another bailout; however, the GSEs’ Q3 earnings reports showed a $475 million net loss for Freddie Mac and a decline of more than 50 percent in Fannie Mae’s quarterly net income (from $4.6 billion in Q2 down to $2 billion in Q3), prompting their boss, FHFA Director Mel Watt, to declare that they may need a bailout anyway.

The FHFA said that beginning December 1, 2015, local community organizations will be able to review and purchase foreclosed properties owned by Fannie Mae and Freddie Mac in the newly added 18 metro areas before they hit the public market.

Fannie Mae announced the winners in its third NPL sale on Tuesday, and on Monday Freddie Mac announced its eighth NPL transaction of 2015. Both transactions total approximately $1.2 billion in unpaid principal balance (UPB).

According to similar releases from the GSEs, starting on November 13, 2015, Fannie Mae will lower its standard modification interest rate from 4 percent to 3.875 percent. Meanwhile, Freddie Mac will lower its standard modification interest rate by the same amount beginning on November 5, 2015.

The research found that 31 percent of borrowers had not talked to their servicer/lender, 28 percent did not believe their servicer could help them, yet 74 percent (nearly three-quarters) said they would talk to a housing counseling agency, yet 38 percent of the homeowners who were surveyed did not know that counseling was available to them.

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.