Tag Archives: Freddie Mac

Led by Senators Mike Crapo (R-Idaho) and Mark Warner (D-Virginia), a group of colleagues from the Senate Banking Committee introduced the bill, S. 752, today, in an effort to push Congress to get serious about exploring reform options for Fannie Mae and Freddie Mac, according to a press release.

The Urban Institute has released a report discussing the impact of these changes and the likelihood Freddie Mac will need to take another draw from the Treasury. Accord to the report, Fannie Mae and Freddie Mac made a combined profit of over $120 million in 2013. But by 2014 the net profit from both institutions fell by 80 percent, with Fannie Mae profit totaling to $14 billion and Freddie totaling $8 billion. More alarming were Freddie’s fourth quarter profits, which were down 90 percent from just the previous quarter.

At the start of a trial in Manhattan federal court, a lawyer for the Federal Housing Finance Agency said misrepresentations by Nomura and Royal Bank of Scotland Group Plc, an underwriter, about loans underlying $2 billion (1.3 billion pounds) in securities exemplified broader misconduct by banks ahead of the crash.

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.

Kiefer, who will be a keynote speaker at the upcoming Five Star Government Forum in Washington, D.C. on March 18, said in Freddie Mac's March 2015 Economic and Housing Market Outlook the big reason for the bright outlook for housing is the improved job market for Millennial home buyers. Analysts agree the future of housing depends on taping into this key demographic. Last year, nearly 20 percent of Millennials were unemployed. That number is slowly decreasing and employment among this generation is inching closer to its peak level of 2008.

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.

Fannie Mae and Freddie Mac released a mortgage program allowing borrowers to put a down payment of a little as three percent, in December of last year. The program was set to target individuals with good credit, but low cash flow. This program has drawn much controversy, with some saying this kind of risky lending is what caused the financial crisis.

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.

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.

The latest Multi-Indicator Market Index (MiMi) from Freddie Mac, released Wednesday, showed that the U.S. housing market showed continued stabilization for the fourth straight month in December. According to the latest MiMi, 38 states plus the District of Columbia and 40 out of 50 metros showed an improving three-month trend in December. The metro areas of Buffalo, Boston, and Nashville, all entered their "benchmark stable" ranges of housing activity.