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Tag Archives: FHFA

FHFA Releases Fannie Mae, Freddie Mac Progress Report

The 2014 Conservatorship Scorecard expressed the expectation that the Enterprises would work to increase access to mortgage credit for creditworthy borrowers. Fannie Mae and Freddie Mac have since released programs that allow buyers to obtain a mortgage with a 3 percent down payment. In addition to providing better access to borrowers, the report stated improvements in the Enterprises’ risks. The improvements include stronger underwriting standards and stricter purchasing guidelines. For example, 97 percent loan-to-value (LTV) ratio loans must be fixed-rate and cannot have an adjustable rate. This provides a responsible approach to improving access to credit while also furthering safe and sound lending practices.

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Nomura, RBS First to Face FHFA in Trial

The non-jury trial in the U.S. District Court of the Southern District of New York in Manhattan is scheduled to begin on Monday, March 16. If no last-minute settlement is reached, Nomura and RBS would be the first two financial institutions to go to trial out of the 18 lenders FHFA sued in 2011 to recoup U.S. taxpayer costs following the government's $188 billion bailout of Fannie Mae and Freddie Mac in 2008, after which the government seized control of both Enterprises. The other 16 lenders have paid a combined total of about $24 billion to settle with FHFA, including $9.3 billion paid by Bank of America in March 2014.

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FHFA Criticizes Hiring of Fannie Mae Senior Official

Hiring of the current CAE, John Forlines, was flawed for multiple reasons. One, he had not been identified for the CAE role in the senior management’s Succession Plan. The Succession Plan found that there was no internal candidate who was “ready now” for the CAE position and that a permanent successor would require an “external” candidate. Fannie Mae decided to compile a list of internal candidate six months after the Succession Plan was released.

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Michael Stegman Stresses Need for Housing Reform In Speech

According to Stegman, under the current system taxpayers remain at risk and the government has yet to provide a long-term plan for the housing market. Under conservatorship GSE senior employees can reap substantial profits while leaving taxpayers the burden of covering the enormous losses. Flaws like this one can only be changed by law.

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FHFA Director Mel Watt Says HARP Can’t Last Forever

U.S. foreclosures soared in 2008. At that time, one in every 54 households was getting at least one filling notice and nearly 3.2 million foreclosures were filed in 2007. Loss mitigation programs were created in response to the crisis. Now, Watt believes the need for these programs will wind down. An estimated 3.2 million borrowers have completed a HARP refinance since it was introduced in 2009, including more than 95,000 in New Jersey, according to the FHFA.

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Ocwen to Sell $45 Billion Worth of Agency Performing Loans

These two transactions together represent approximately $55 billion in unpaid principal balance for which Ocwen has agreed in the last week to sell the mortgage servicing rights. Both of the transactions are expected to be completed in the next six months. According to Ocwen's announcement, the Atlanta-based servicer expects the two transactions will generate approximately $550 million in proceeds and "accelerate Ocwen's strategy to reduce the size of its Agency servicing portfolio."

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20 Percent of Optimal Households Failing to Refinance

Houses lose out on big money when they fail to take advantage of low interests and refinance. For example, a household with a 30-year, fixed-rate mortgage of $200,000 at an interest rate of 6.5 percent that refinances when rates fall to 4.5 percent will save over $80,000 in interest payments over the life of the loan, even after including all the typical refinancing costs. Mortgage rates were around 4.7 percent in December 2010, higher than the current rate of 3.5 percent. Still, many homes fail to refinance.

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Mortgage Rates Rise for Third Straight Week, Still Down from December

Mortgage rates are up for the third straight week of February, according to a report released by Freddie Mac on Thursday. However, fixed mortgage rates still remain near late May 2013 lows and numbers released by the Federal Housing Finance Agency on Thursday show mortgage rates on a month-to-month basis are down in January. According to Freddie Mac, the 30-year FRM rate increased to 3.8 percent from last week’s rate of 3.76 percent.

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FHFA House Price Index Shows 1.4 Percent Increase

U.S. home prices rose for the 14th consecutive quarter by 1.4 percent, according to the Federal Housing Finance Agency's House Price Index released Thursday. The price increase was seen in the purchase-only, seasonally adjusted index in the fourth quarter of 2014.

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