GSE News

Category — GSE News

Freddie Mac Loan Deal Defective, Report Says

by Coester

-The New York Times Freddie Mac used a flawed analysis when it accepted $1.35 billion from Bank of America to settle claims that the bank misled it about loans purchased during the mortgage boom, according to an oversight report scheduled for release on Tuesday. The faulty methodology significantly increased the probable losses in Freddie Mac’s portfolio of loans, according to the report, prepared by the inspector general of the Federal Housing Finance Agency, which oversees the company. Fre...

September 27, 2011 No Comments

Fed bond-buying decision keeps mortgage rates at record lows

by Coester

-Housingwire The Federal Reserve's plan to reinvest principal payments on some bonds into mortgage-backed securities is already contributing to the nation's record low mortgage interest rates, Bankrate said Thursday. Bankrate said the Federal Open Market Committee seems to be taking direct aim at mortgage rates by shifting $400 billion from short-term holdings into long-term government bonds. The program, which begins Oct. 3 and runs through June, will involve longer-term Treasury securities ...

September 26, 2011 No Comments

FHFA lacks staff to effectively monitor GSEs, report says

by Coester

-Housingwire The Federal Housing Finance Agency lacks the staff to properly monitor the mortgage giants it has in conservatorship, according to a report by the Office of the Inspector General. The report said the agency also failed to provide adequate oversight over default services legal issues. The Office of the Inspector General for the federal regulator said the FHFA "has far too few examiners" to properly handle its examination system to monitor Fannie Mae,Freddie Mac and the...

September 26, 2011 No Comments

G.O.P. Urges No Further Fed Stimulus

by Coester

-The New York Times Even though the financial markets have been counting on the Federal Reserve to take action, Republican Congressional leadership sent a letter to the Federal Reserve chairman on Tuesday evening urging it not to engage in further stimulus. The letter was sent in the midst of a two-day meeting in which Fed officials are widely expected to undertake policies to lower long-term interest rates. That move would be intended to loosen up credit in hopes of promoting growth. The meet...

September 26, 2011 No Comments

Fed Runs Risk of Doing Less Than Investors Expect

by Coester

-The New York Times Investors have concluded that the Federal Reserve will announce new measures to promote economic growth after a meeting of its policy-making committee ends Wednesday. Long-term interest rates have moved as if the Fed had already spoken. The central bank is often described as facing the choice of whether to do more to improve the economy. But the anticipatory behavior of investors means the Fed really faces a slightly different choice, one it has confronted often in recent y...

September 26, 2011 No Comments

Fannie and Freddie Could Raise Fees in 2012

by Coester

-Realty Biz News Analysts believe that the government may need to charge higher fees to lenders and increase mortgage insurance from borrowers in order to guarantee loans when they go ahead and overhaul Fannie Mae and Freddie Mac – a move that could lead to increased borrowing costs. The government is trying to boost competitiveness within mortgage markets, and at the same time reduce their expenses over the next ten years by $28 billion. Currently, government-sponsored enterprises (GSEs) ...

September 26, 2011 1 Comment

Bank regulators to unveil "living will" plan

by Coester

-Reuters U.S. regulators are set to vote next week on a final rule governing the plans large banks must draft on how they can be liquidated if they are heading toward failure. The 2010 Dodd-Frank financial oversight law requires these "living wills," which are part of the government's new power to seize and break up large, failing firms. The Federal Deposit Insurance Corp announced plans on Thursday for its board to vote on the final rule on Tuesday. It is drafting the rule with t...

September 13, 2011 No Comments

Fannie, Freddie refi market set to enter housing Twilight Zone

by Coester

-Housingwire U.S. residential mortgage lending volume will struggle to reach the mid-$800 billion range in 2012, according to market research, as the recent boom in refinancings dries up at Fannie Mae and Freddie Mac. Furthermore, the report from iEmergent, paints a picture of a housing market floating in its own Twilight Zone — a reality where "the distribution and location of local lending opportunities will continue to re-shape and reset the long-term home financing prospects and pr...

September 7, 2011 No Comments

Bernanke’s big Jackson Hole speech could rattle the markets

by Coester

-MSNBC Whether the Federal Reserve likes it or not, its unprecedented monetary polices over the last few years have conditioned the financial markets to expect a helping hand when the going gets tough. That's why all eyes will be on Ben Bernanke, the central bank's chairman, when he speaks Friday at the Fed's annual symposium in Jackson Hole, Wyoming. With the stock market mired in a month-long slump and both the U.S. and euro zone economies in danger of sliding into recession, investors ar...

August 24, 2011 No Comments

Former Ginnie Mae execs submit GSE reform plans

by Coester

-Housingwire Former Ginnie Mae presidents Robert Couch and Joseph Murin said the future structure of Fannie Mae and Freddie Mac should be based on the agency they used to lead, according to a letter they sent to Republican lawmakers last week. In the letter sent to Sen. Richard Shelby (R-Ala.), and Reps. Spencer Bachus (R-Ala.) and Scott Garrett (R-N.J.), the former Ginnie chiefs expressed concern over the health of the secondary mortgage market and its weight on the economic recovery. &quo...

August 24, 2011 No Comments

Fed’s Low-Rate Pledge Is ‘Inappropriate’: Plosser

by Coester

-CNBC The Federal Reserve's recent promise to keep rates low for another two years was "inappropriate policy at an inappropriate time," while its statement on the economy was excessively negative, a top Fed policymaker said Wednesday. Philadelphia Federal Reserve President Charles Plosser said he dissented from the Fed's statement because policy should be determined by what the economy is doing rather than by a fixed timeline. "It was inappropriate policy at an inappropri...

August 17, 2011 No Comments

On mortgage rates, Obama wants proposal for how government can keep big role

by Coester

-Washington Post President Obama has directed a small team of advisers to develop a proposal that would keep the government playing a major role in the nation’s mortgage market, extending a federal loan subsidy for most home buyers, according to people familiar with the matter. The decision follows the advice of his senior economic and housing advisers, who favor maintaining the government’s role as an insurer of mortgages for most borrowers. The approach could even preserve Fannie Mae an...

August 17, 2011 No Comments

What is Fed weighing as it mulls more easing?

by Coester

-CNBC The Federal Reserve is considering renewed efforts to boost growth should the weak U.S. economic recovery and high unemployment take a turn for the worse. Even though employers added a surprisingly hefty 117,000 jobs in July and the jobless rate slipped a tenth of a percentage point, no one argues the job market is robust. Officials will remain vigilant for signs subpar growth is entrenched or is at risk of petering out altogether. The possibility that financial market strains from th...

August 10, 2011 No Comments

If Fed Is Out of Bullets, Are Tax Cuts Only Option?

by Coester

-CNBC The U.S. Federal Reserve managed to spark a stock rally on Tuesday, but some economists are now left wondering if it will take tax cuts to inject real life into the broader US economy. The Fed told investors it will keep rates at zero until 2013, and said it would consider further moves to boost growth. Following the news, stocks on Wall Street surged higher and ended the session up more than 4 percent, helping to erase some of the losses made over the last 7 days. Despite the ra...

August 10, 2011 No Comments

Fed’s Elusive Prescriptions for an Erratic Ailment

by Coester

-The New York Times The Federal Reserve is back in the spotlight, with investors anxiously wondering if the central bank will end a two-month hiatus and announce new measures to support the economy on Tuesday. Under its chairman, Ben S. Bernanke, the Fed has pushed the boundaries of its authority and defied opposition during its unprecedented four-year-old campaign to rescue the financial system and revive the economy. As the Fed’s policy-making board convenes Tuesday, with the gains of th...

August 9, 2011 No Comments

GSEs suspend Republic Mortgage Insurance

by Coester

-Housingwire Freddie Mac and Fannie Mae will no longer purchase for securitization most mortgages insured by Republic Mortgage Insurance and its affiliate RMIC of North Carolina. RMIC, a subsidiary of Old Republic International (ORI: 9.95 -2.26%), a Chicago-based insurance underwriting company with a market capitalization of $2.6 billion, had been showing signs of financial stress since at least last fall. The company breached its regulatory risk-to-capital limits as of Sept. 30, 2010, said...

August 4, 2011 No Comments

Senate steps toward new mortgage servicing standard

by Coester

-Housingwire The Senate Banking Committee will hold a hearing Tuesday to develop a new national mortgage servicing standard. In January, federal regulators announced a new initiative to develop a set of servicing standards following weaknesses in the process that arose last year. The industry immediately began pushing for a unified approach, and regulators are at work with the 50 state AGs to align new requirements, especially for servicing nonperforming loans. Already, Congress is hearin...

August 2, 2011 1 Comment

Freddie Mac ready to launch Servicing Success Program

by Coester

-Housingwire Freddie Mac posted details about its new Servicing Success Program Monday as the government-sponsored enterprise prepares for the Aug. 1 launch of the initiative. Through the program, Freddie hopes to offer servicers a more "robust and balanced approach" to setting standards for what the GSE expects from its servicing clients in the field. The program will not only set performance bars, but will provide a stream of feedback on servicer strengths and weaknesses. It als...

July 26, 2011 No Comments

Fed’s Massive Stimulus Had Little Impact: Greenspan

by Coester

-CNBC The Federal Reserve's massive stimulus program had little impact on the U.S. economy besides weakening the dollar and helping U.S. exports, Federal Reserve Governor Alan Greenspan told CNBC Thursday. In a blunt critique of his successor, Fed Chairman Ben Bernanke, Greenspan said the $2 trillion in quantitative easing over the past two years had done little to loosen credit and boost the economy. "There is no evidence that huge inflow of money into the system basically worked,&quo...

July 13, 2011 No Comments

Fed’s new money policy: ‘Wait and see’

by Coester

-MSNBC After pumping more than a trillion dollars into the financial system, forcing interest to near zero and buying back hundreds of billions of dollars of bad mortgage bonds, the Federal Reserve has adopted a new monetary policy. Call it "wait and see." Fed Chairman Ben Bernanke was on Capitol Hill Wednesday testifying on the central bank's latest strategies for getting the economy back on a stronger footing. The hearing comes a day after minutes of the Fed's latest Open Market...

July 13, 2011 No Comments

Big four top contenders to replace Fannie, Freddie

by Coester

-Housingwire As the government-sponsored enterprises slowly wind down their massive domination of the mortgage finance markets, the most likely parties to fill the capital hole left behind are the big four banks. However, how well or how much the big four can cover remain up for discussion. On Tuesday, speakers tossed ideas back and forth at a panel titled: "Housing Finance Reform Proposals." They gathered in Washington at the annual meeting of the American Securitization Forum, a...

June 28, 2011 1 Comment

Freddie Mac settles with TBW to clean up mortgage mess

by Coester

-Housingwire Freddie Mac settled with bankrupt mortgage lender Taylor, Bean & Whitaker but will see only a fraction of what it sought, according to a Securities and Exchange Commission filing this week. TBW, once the 12th largest mortgage lender in the U.S., originated, serviced and sold pools of mortgages to Freddie Mac. It relied on financing vehicles from Colonial Bank and Ocala Funding. But in 2002, then TBW Chairman Lee Farkas organized a scheme to defraud investors, regulators and...

June 27, 2011 No Comments

Bernanke says home price stabilization necessary to woo buyers

by Coester

-Housingwire Federal Reserve Chairman Ben Bernanke said home price stabilization and a faster foreclosure process are needed to restore confidence in housing, unleashing a recovery in the sector. He also said the central bank expects the unemployment rate to slip to 8.6% by the latter part of 2011 and decrease to 7.5% by 2013. High unemployment continues to weigh down the economy and remains a significant contributor to the stalled housing recovery, Bernanke said Wednesday in the Fed's seco...

June 22, 2011 No Comments

Accountability needed

by Coester

-Centredaily.com The recent release of documents showing that the Federal Reserve lent tens and possibly hundreds of billions of dollars to foreign banks in 2008 and 2009 has raised more questions about Ben Bernanke’s chairmanship of the Federal Reserve The lending may or may not have been the right thing to do at the time, given the financial crisis. But it was done in secret, and the only reason that we have the information now is because Bloomberg News and Fox Business News won a two-yea...

June 22, 2011 1 Comment

Fannie Mae lowers growth estimate as home prices continue to search for bottom

by Coester

-Housingwire Fannie Mae economists predict slower economic growth for 2011 as home sales and consumer spending lag, and home prices search for a bottom that's unlikely to appear before the fourth quarter. The overall economy is now expected to grow at a pace of 2.5% this year, down from a prior forecast of 2.9%, economists with the government-sponsored enterprise's economics and mortgage market analysis group said Monday. A lackluster housing market is one of the key drivers of the slowdown...

June 22, 2011 No Comments

75 Percent of Refinancing Homeowners Maintain or Reduce Debt in First Quarter

by Coester

-RISMedia Freddie Mac (OTC: FMCC) released the results of its first quarter refinance analysis showing homeowners who refinance continue to strengthen their fiscal house: • In the first quarter of 2011, 3-out-of-4 homeowners who refinanced their first-lien home mortgage either maintained the same loan amount or lowered their principal balance by paying-in additional money at the closing table. Fifty-four percent maintained the same loan amount—the highest share since 1985, when Freddie...

June 14, 2011 No Comments

Freddie Mac loses $929 million

by Coester

-Yahoo! News Mortgage finance giant Freddie Mac (FMCC.OB) on Wednesday said it lost just short of a billion dollars last quarter, though it did not ask taxpayers for more aid as the loss stemmed from interest payments to the government. The second-largest U.S. residential mortgage funds provider reported net loss attributable to common shareholders of $929 million in the first quarter, including a $1.6 billion payment to the government. Without that interest payment, Freddie Mac ...

June 14, 2011 No Comments

“Jumbo” Mortgages Could Change Their Rules

by Coester

-ChicagoAgentMagazine.com Beginning on Oct. 1, the government will dial back on the size of mortgages it guarantees in high-cost areas like San Francisco, New York and Washington. After that deadline, the maximum loan amount that Fannie Mae and Freddie Mac will back is scheduled to drop from $729,750 to $625,500. “For people planning on exiting the market altogether (such as retirees), that is a compelling proposition,” Stan Humphries, chief economist at Zillow, told MSNBC. Home seller...

June 14, 2011 No Comments

Freddie Mac expects strong spring home buying

by Coester

by CHRISTINE RICCIARDI –Housingwire The housing market is poised for an uptick in home sales during the traditional spring buying season, as employment improves and rates remain low, Freddie Mac said in its April 2011 economic outlook released Wednesday. Overall, Freddie Mac said home sales will up-tick 5% in 2011 compared to 2010 — a projected 4.9 million home sales. The agency estimates that number will rise 12.2% to 5.5 million homes sales in 2012. The Federal Reserve�...

June 14, 2011 No Comments

House members look to pay Fannie, Freddie employees as gov’t workers

by Coester

by JON PRIOR –Housingwire Two members of the House Financial Services Committee are working on legislation that would align the pay of Fannie Mae and Freddie Mac employees with workers at federal bank regulatory agencies. Rep. Al Green (D-Texas) raised the amendment Tuesday during the GSE subcommittee hearing on a bill from Rep. Spencer Bachus (R-Ala.). Bachus’s bill, the Equity in Government Compensation Act, would suspend the current compensation packages for GSE employees. It would ...

June 14, 2011 No Comments

What Fannie, Freddie execs made while in conservatorship

by Coester

by JON PRIOR –Housingwire.com The top six executives at Fannie Mae and Freddie Mac made a combined $35.4 million in 2009 and 2010, but they could have made more had they reached levels set by the Federal Housing Finance Agency. The two companies were taken into conservatorship in late 2008. Along with developing how those struggling enterprises would operate and continue to fund the mortgage market, the FHFA and the Treasury set up how executive compensation packages would be structured....

June 14, 2011 No Comments

What Fannie, Freddie execs made while in conservatorship

by Coester

June 14, 2011 No Comments

House members look to pay Fannie, Freddie employees as gov’t workers

by Coester

June 14, 2011 No Comments

Could Debt Worries Accelerate Fannie, Freddie Overhaul?

by Coester

-The Wall Street Journal Most Washington pundits don’t expect any major political action on mortgage giants Fannie Mae and Freddie Mac before the 2012 election, but growing jitters over the nation’s debt illustrate one potential catalyst that could keep the current conservatorship of the firms from dragging on indefinitely. On Monday, Standard & Poor’s placed the U.S. AAA-rating on negative outlook. It cited the potential cost of the U.S. government’s conservatorship of the mor...

June 14, 2011 No Comments

Why Fannie and Freddie May Never Die

by Coester

-US News Their failures are manifest, and politicians of every stripe seem to revile them. Fannie Mae and Freddie Mac have turned out to be the biggest catastrophes of the 2008 financial meltdown. The government has already spent more than $130 billion in taxpayer money to keep them alive, and the tally is still rising. If they were in any way expendable, the two mortgage agencies would be gone by now. But the credit crunch of the last three years has left middle-class home buyers more depen...

June 14, 2011 No Comments

“Jumbo” Mortgages Could Change Their Rules

by Coester

June 14, 2011 No Comments

Fannie Mae servicers to evaluate more borrowers for imminent default

by Coester

-Housingwire Fannie Mae notified its mortgage servicers this week to begin evaluating borrowers for imminent default not just for the Home Affordable Modification Program but for any initiative. Borrowers who do not qualify for HAMP and are less than 60-days delinquent on their mortgage must be evaluated for imminent default if they request a modification. If the servicer determines the borrower has less than $25,000 in cash reserves, the servicer must submit the loan to Freddie Mac‘s im...

June 14, 2011 No Comments

Do We Need Fannie and Freddie?

by Coester

-Yahoo! News The United States doesn’t need government-sponsored enterprises such as Fannie Mae and Freddie Mac to sustain the housing market. At least that’s what Anthony Sanders, professor of real estate finance at George Mason University, told the House Subcommittee on Capital Markets and Government Sponsored Enterprises last week. Because government-sponsored enterprises (GSEs) back more than 90 percent of all home loans today, they have crowded out private sector lending and disto...

June 14, 2011 No Comments

Fannie, Freddie may never pay back the government

by Coester

-Housingwire The Treasury Department paid $164.4 billion to Fannie Mae and Freddie Mac since placing them into conservatorship in September 2008, but that money may never be paid back. Every quarter, Fannie and Freddie pay a 10% dividend payment on senior preferred stock. Through the first quarter, Fannie drew $99.7 billion and paid $12.4 billion in dividends. Freddie drew $64.7 billion and paid $11.6 billion in dividend payments. The Congressional Budget Office recently estimated the comp...

June 14, 2011 No Comments

Bank group tries to burst the next bubble

by Coester

By Howard Schneider Washington Post Staff Writer Thursday, December 16, 2010; 10:23 PM A committee writing new international financial standards has recommended strict new guidelines to restrain bank lending, an idea considered central to preventing the global financial system from overheating, but one that some feel could choke off needed credit for households and businesses. U.S. officials say they have already decided to ignore key parts of the proposal because of the potentially damag...

December 22, 2010 No Comments

Fannie, Freddie Pressured to Offer Loan Mods

by Coester

The Obama administration is exerting pressure on government-sponsored enterprises Fannie Mae and Freddie Mac to write down underwater loans. The move comes in an effort to reduce the threat of another recession in the U.S. housing market, according to a Dec. 8 story in The Wall Street Journal. Through its primary regulator, the Federal Housing Finance Agency, the Obama administration wants the GSEs to join a program run by the Federal Housing Administration that allows banks and other creditors...

December 22, 2010 No Comments

FHA Leaves Loan Limits Unchanged 2011

by Coester

The Federal Housing Administration will leave approved loan limit ceilings on mortgages it will insure in 2011 unchanged at $729,750 for single units in high cost areas and $271,050 for single units in low cost areas, according to the agency’s Dec. 1 Mortgagee Letter. The limits, which will remain effective from Jan. 1 through Sept. 30, originally were raised by the Economic Stimulus Act of 2008 and the Housing and Economic Recovery Act of 2008 to help stabilize the struggling housing market....

December 22, 2010 No Comments

TARP’s New Estimated Cost: $25 Billion

by Coester

The $700 billion Troubled Asset Relief Program is projected to cost the American taxpayer $25 billion, according to a Nov. 29 report released by the nonpartisan Congressional Budget Office. As recently as August, the CBO had projected the cost to be around $66 billion. The CBO has credited the stabilizing financial system and careful deployment to funds (not all $700 billion allotted was dispensed) with its loss revision. In March, the CBO estimated TARP would cost taxpayers $109 billion. In A...

December 15, 2010 1 Comment

Fannie, Freddie Securities Found to Be Less Risky

by Coester

By Lorraine Woellert (Updates with Collender comments starting in the second paragraph.) Sept. 13 (Bloomberg) -- Mortgage pools packaged by Wall Street as investments during the housing boom were more risky and performed worse than those guaranteed by Fannie Mae and Freddie Mac, the companies’ regulator said. Loans with “higher-risk characteristics” were more common in private-label securities than in the mortgage portfolios bought or guaranteed by the government-sponsored enterprises, ...

September 15, 2010 No Comments

Fannie, Freddie Future Debated at Treasury Housing Summit

by Coester

Treasury Secretary Timothy Geithner told industry executives and academics there is a "good case" for the government to continue playing a role in housing finance, The Wall Street Journal reported Aug. 18. However, Geithner and other administration officials have been careful not to say what form that might take and how much support is needed. The Treasury Department’s recent Housing Summit was aimed at soliciting views from top industry officials on how Fannie Mae and Freddie Mac s...

September 1, 2010 1 Comment

Fannie Mae Bans Appraisal Cutting

by Coester

Kenneth R. Harney - The Nation’s Housing | Sunday, July 11, 2010 Picture this: You’ve signed a contract to sell your house. Your buyers say they’ve nailed down the right mortgage. All is well. But then the appraisal comes in low - $25,000 to $50,000 under what was agreed in the contract. The lender insists on cutting the mortgage amount to reflect the lower appraised value. You refuse to negotiate anywhere near the price indicated by the appraisal, and suddenly - poof! The whole de...

July 12, 2010 6 Comments

Fannie Mae Loan Buyback Requests Up More Than 60% Year Over Year

by Coester

by Tim Rood Posted 5/11/2010 12:45 PM While many expected the disturbingly high number of GSE directed repurchase demands to mortgage lenders on nonperforming loans to crescendo in 2009 – 2010 is looking to be an even more onerous year for mortgage lenders that sold loans to the GSEs. Nonbank financial institutions in particular, could be at significant financial risk by the contingent liabilities associated with the representations and warranties made to the GSEs for the quality, eligibility,...

May 14, 2010 1 Comment

Fed Made $47.4 Billion in 2009 from Housing Investments

by Coester

The Federal Reserve transferred a record $47.4 billion to the Treasury Department in 2009 as a result of its housing-related programs, according to an April 21 report in The New York Times. The central bank's payment to the Treasury in 2009 was a $15.7 billion, or 50 percent, increase over 2008. The rise in income was primarily the result of interest earned from the Fed’s 2007 strategies to acquire mortgage-backed securities and debts owned by Fannie Mae and Freddie Mac as well as to i...

April 30, 2010 No Comments

Fannie and Freddie Provide Updated HVCC FAQ's

by Coester

Fannie Mae and Freddie Mac have updated their Home Valuation Code of Conduct frequently asked questions to provide additional clarification on a number of issues from scope of coverage and appraisal management companies to portability of appraisals. The clarification, which was issued on March 17, concerns scope of coverage, selection of appraisers, the role of in-house appraisers, appraisal management companies, mortgage brokers, ordering appraisals, portability of appraisals, second ap...

April 1, 2010 No Comments

Federal Reserve: Commercial BPOs Do Not Satisfy the Definition of "Evaluation"

by Coester

Link to Original: In response to clarification requests from the Appraisal Institute, the Federal Reserve’s Board of Governors issued a Jan. 14 letter confirming that a broker price opinion “does not satisfy the definition of an appraisal in the Board’s appraisal regulation.” The Fed’s clarification was addressed to the Appraisal Institute and came in direct response to an Oct. 26, 2009, letter sent to the Fed by the nation’s four largest appraiser organizations that ask...

February 9, 2010 1 Comment

Treasury, HUD Update Guidance on Expediting Permanent Modifications

by Coester

Treasury, HUD Update Guidance on Expediting Permanent Modifications Sorohan, Mike The Treasury Department and HUD yesterday released updated guidance for servicers participating in the Administration’s mortgage modification program, aimed at refining documentation requirements to expedite conversions of current trial modifications to permanent ones. The updated process requires that key documents, including proof of income, be obtained from the borrower before a borrower evaluation can begin...

January 31, 2010 1 Comment