Tag Archives: Treasury Department

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.

The GSEs remain a mainstay in debates over the role of the government in housing, but some now say the Federal Housing Administration may take a turn as the next agency in need of bailout funds. A new study by Joseph Gyourko, a University of Pennsylvania real estate and finance professor, highlights future peril for the agency, predicting that it may need as much as $50 billion in federal funds over the next several years just to stay solvent. Some analysts say the real threat is not from a bailout but from sapped liquidity and credit for homeowners.

More refinance loan applications inspired a 10.3-percent leap forward in mortgage applications last week, according to the Mortgage Bankers Association. The MBA released a weekly survey responsible for tracking mortgage application volume. The surge in mortgage loan application volume follows a shortfall in contract interest rates on average for fixed-rate mortgages, with the 30-year loan seeing a drop from 4.31 percent the week before to 4.22 percent last week.

Fannie Mae and Freddie Mac remain under scrutiny in the wake of large salaries and bonuses for their executives, as lawmakers from both major parties mount a rare joint effort to criticize the GSEs and their federal regulator. No less than 60 senators a total of 35 Republicans and 25 Democrats crossed the aisle to circulate a letter Friday that denounced the Federal Housing Finance Agency for signing off on $12.79 million in bonuses for ten executives with the GSEs. Furor over the bonuses follows a string of changes for Freddie Mac.

Fraudsters and money-launderers may find it more difficult to move forward with their illicit activities if a new draft rule receives approval. Publishing a draft rule in the Federal Register Thursday, the Financial Crimes Enforcement Network proposed eliminating the Federal Housing Finance Agency as a middle-man in the reporting process for suspicious activity for GSEs Fannie Mae and Freddie Mac. The rule would require GSE officials to file suspicious activity reports with FinCEN itself.

The head of the agency that regulates the GSEs addressed one lawmaker's recent proposal to eliminate the federal lifeline for Fannie Mae and Freddie Mac Thursday even as the latter filed staggering third-quarter losses and requested another $6 billion in taxpayer funds. Federal Housing Finance Agency Acting Director Edward DeMarco and several others testified before the House Subcommittee on Capital Markets, which heard the chief regulator describe why the federal government needs to slowly phase out taxpayer support for the GSEs.

Officials with the White House and Consumer Financial Protection Bureau continue to press critics of the bureau to confirm Richard Cordray as director, notably fronting the wife of Central Intelligence Agency Director Ret. Gen. David Petraeus Thursday. Speaking before the Senate Banking Committee, CFPB Assistant Director Holly Petraeus addressed concerns about the housing market and the effects on service members and their families, ascribing increased hardship to declining home values and difficulties in home sales.

A bipartisan group of lawmakers called for more modifications to the Home Affordable Refinance Program Wednesday in a public letter addressing federal officials. Sen. Barbara Boxer (D-California) and Sen. Johnny Isakson (R-Georgia) joined eight other lawmakers to call for the FHFA and other federal regulators to lift access barriers to borrowers with higher-equity government-backed loans. The letter argues that new modifications could benefit approximately 12 million other borrowers.

The feud between lawmakers over the Consumer Financial Protection Bureau dragged on Wednesday, as de facto acting director Raj Date defended the struggling agency to Republican House members and the role of the Dodd-Frank Act in financial regulation. Republicans advanced their critiques by highlighting the apparent power of the CFPB director and more compliance workload for financial institutions. Democratic lawmakers played their part by praising the bureau. At other times lawmakers ratcheted up the rhetoric.

BB&T looked southward to acquire Florida-based BankAtlantic Tuesday, assuming $3.3 billion in low-cost deposits and picking up 78 branches from the retail lender in the process, according to statements released by the companies. The move ranks BB&T ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô one of the largest U.S. banks by assets ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô the sixth largest franchise in the Miami market. The North Carolina-based acquirer will pay $301 million above the premium price for the deposits and branches, plus $2.1 billion in performing loans. The acquisition is also another move up for the bank.