Tag Archives: FHFA

A failure by lawmakers to slash $1.2 trillion from the national debt spurred Fitch Ratings to place U.S. debt on negative outlook Monday, a move that immediately hit GSEs Fannie Mae and Freddie Mac by association. The ratings agency revised a stable outlook for debt held by Fannie and Freddie to negative, even while it reaffirmed AAA-ratings in place for the GSEs. Multiple news reports suggest that Fitch will likely downgrade credit ratings for the U.S. federal government, along with Fannie and Freddie.

Rep. Barney Frank, a liberal icon on Capitol Hill and co-author of the financial reform law that bears his name, announced that he will not seek reelection Monday. A newly redistricted area of Massachusetts ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô which he represented for 40 years ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô adds less than half a million new constituents and straddles an area with which he is unfamiliar, according to Frank. He pledged to continue his public advocacy efforts from outside the Beltway and finish his term in office. Analysts say his departure makes repeal more likely for the Dodd-Frank Act.

Embattled mortgage insurer The PMI Group, Inc., caved in to state-imposed roadblocks by voluntarily filing for Chapter 11 bankruptcy Wednesday. The move comes a day before a major U.S. holiday and on the heels of a seizure of subsidiaries PMI Mortgage Insurance Co. and PMI Insurance Co. by state regulators with the Arizona Department of Insurance. PMI said that $685 million in senior unsecured notes and about $51.5 million in junior unsecured notes became immediately due and payable as a result of the bankruptcy filing.

One online lender is handling the refinancing rush by targeting borrowers who are eligible for the Home Affordable Refinance Program (HARP).

The GSEs are making headlines, with Fannie Mae's CEO appearing before Congress to address the entity's possible profitability and Freddie Mac's CEO providing testimony on the controversial executive bonuses within the organization. Both leaders spoke to the House Committee on Oversight and Government Reform to field questions regarding various aspects of Fannie and Freddie's practices and financial standing. The high-profile hearing follows considerable outcry by lawmakers over $13 million in bonuses for 10 senior-level executives.

The same day that lawmakers deluged the GSEs and their regulator with criticism, Fannie Mae and Freddie Mac finally released guidelines Tuesday for lenders and servicers about modifications to the Home Affordable Refinance Program. The Obama administration ended weeks of speculation when it announced the modifications ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô specific to HARP 2.0, as dubbed by the media ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô in October. New guidelines effectively took lenders and servicers off the hook by nixing their legal culpability for original loans before homeowners refinance with the GSEs.

A minibus bill cobbled together by House lawmakers would slash spending from several federal agencies, including HUD, and limit a hike in conforming loan limits to the Federal Housing Administration. House lawmakers drafted the stopgap bill to resolve funding needs for the federal government and avoid a shutdown for the remainder of the fiscal year a step in the direction of an agreement reached by White House officials and member of Congress earlier this year.

Pressure from Congress over some $13 million in bonuses for GSE executives crystallized in a hearing Tuesday that saw Federal Housing Finance Agency Acting Director Edward DeMarco defend himself and the controversial pay packages against critical questions from lawmakers. Members of the Senate Banking Committee largely took turns criticizing the FHFA's decisions and probing for statements about the housing finance system. The head of the agency responsible for regulating the GSEs portrayed his decision as one that would ultimately help keep taxpayers off the hook.

As pressure builds to repeal the Dodd-Frank Act, one lawmaker pushed back by formally requesting an analysis of the rulemaking effort and financial consequences under the financial legislative overhaul. Sen. Tim Johnson wrote two letters to public officials Thursday to make the request, with clear intentions to secure a formal, objective analysis that lends credibility to the financial law and overall rulemaking process. Included agencies in the requested analyses: the Consumer Financial Protection Bureau and Federal Housing Finance agency.

Fielding more pressure for housing finance reform, Sen. Bob Corker (R-Tennessee) introduced a bill Wednesday that aims to decouple government assistance from the GSEs and shore up private-sector involvement in mortgage markets. The bill, titled the Residential Mortgage Market and Privatization Act, proposes gradually reducing the percentage of principal in the GSEs├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ó mortgage-backed securities, streamlining underwriting standards and origination databases, and removing federal guarantees to create a much-discussed to-be-announced market.