Tag Archives: Treasury Department

Amid calls from the Obama administration for a more stable housing market—particularly where affordable housing is concerned—Michael Stegman, counselor to the Secretary of the Treasury for Housing Finance Policy, Thursday called for top-down reforms that would rewire how the federal government funds and regulates both government and private-label securities. He also criticized a pair of "implausible scenarios" that would either leave the GSE system to amend itself or rely on minor revisions.

In identical letters addressed to the boards of each enterprise, Bruce Berkowitz, managing member and chief investment officer of Fairholme Capital Management, urges the directors at Fannie Mae and Freddie Mac to “act in the best interests of each company and in accordance with accepted best practices for corporate governance.”

Freddie Mac released on Thursday its quarterly earnings report for the end of 2013, revealing yet another strong quarter—the ninth straight. Net income at the enterprise totaled $8.6 billion in Q4, bringing total 2013 profits up to $48.7 billion. According to the company, full-year earnings were spurred by the ongoing housing recovery, legal settlements totaling $7.7 billion, and a tax benefit of $23.3 billion.

Posting a profit of $6.5 billion in the fourth quarter, Fannie Mae announced Friday it will pay the Treasury Department $7.2 billion in March, bringing its total dividend payments to the government to $121.1 billion—a full $5 billion more than what the enterprise drew following the financial crisis. Nevertheless, per Fannie's (and Freddie's) agreement with Treasury, the payments will continue.

The U.S. Treasury reported just under 23,000 permanent loan modifications completed under the Home Affordable Modification Program (HAMP) in November, bringing the total count to nearly 922,000. According to Treasury's data, homeowners have reduced their first-lien mortgage payments by a median of approximately $546 each month, or almost 40 percent of their median before-modification payment. Total estimated savings afforded by the program is $24.2 billion to date, Treasury reports.

In the midst of an ongoing political debate surrounding their future, Fannie Mae and Freddie Mac continue to see strong profits.

Following a vote in the Senate, Jack Lew is officially the Secretary of the Treasury. The Senate voted Wednesday 71-26 to confirm Lew, who was previously President Obama's chief of staff. Lew replaces Tim Geithner, who stepped down at the end of January; deputy secretary Neal Wolin had been filling in in the meantime.

Following a recent report from the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), which charged that Treasury has not appropriately limited compensation for executives at companies bailed out by TARP, a House subcommittee held a hearing on the matter.

Ally Financial reported net income of $1.4 billion for 2012's last quarter as the bank continues to shift away from the mortgage business. Last quarter's $1.4 billion income was a marked turnaround from the net loss of $206 million reported at the end of 2011. For the entire year, Ally recorded a net income of $1.2 billion compared to a net loss of $157 million in 2011. According to the bank's quarterly earnings report, performance was largely "affected by strong on sale revenue in Mortgage Operations."

A taxpayer watchdog agency accused Treasury of lacking a concrete plan to help Ally pay back taxpayers and move toward financial stability. Although Treasury made three investments into Ally, totaling $17.2 billion, the report says Treasury never required the company to "spell out a plan" to address issues surrounding Residential Capital, Ally's mortgage arm that caused most of the company's losses.