The Structured Finance Industry Group and Securities Industry and Financial Markets Association plan to file a “friend of the court” brief with the Supreme Court of the United States in support of a defendant in a case affecting consumer ABS – the severity of which is a matter of debate. In the case of Madden v. Midland Funding, the Second Circuit Court of Appeals back in May determined that a debt buyer who purchased defaulted credit card accounts from a national bank is not entitled to collect interest under the National Bank Act at the rate set in the cardholder agreement. About a month later, SFIG and SIFMA filed...
Fannie Mae and Freddie Mac continued to reduce their retained mortgage portfolios during the third quarter by a combined $35.2 billion, a period in which Fannie reported a $2.2 billion gain in earnings while Freddie suffered a $475 million loss. Freddie Mac noted that its investments in less liquid assets were $114.2 billion at the end of the quarter, down 8 percent or $10.1 billion from the second quarter. The government-sponsored enterprise attributed this to its ongoing portfolio liquidation and the sales of $3.4 billion of non-agency MBS. Freddie also securitized $4.0 billion of single-family re-performing and modified loans. Since being placed in conservatorship, Fannie and Freddie have been...[Includes one data table]
Bank of America has disclosed a $335 million settlement with a Pennsylvania public school pension fund, ending a four-year class-action lawsuit brought by shareholders. BofA made the disclosure without much detail in its 10-K filing. According to the bank, the $335 million, which will be used to settle multiple claims, was fully accrued as of June 30, 2015. A bank spokesman declined to comment on the settlement. Shareholders led...
A rule proposed late last month to impose margin requirements in the single-family “to-be-announced” market would draw in the multifamily housing finance programs of Fannie Mae and Ginnie Mae, according to industry trade groups. At issue is SR-FINRA-2015-036, a proposal to amend Financial Industry Regulatory Authority Rule 4210 margin requirements for TBA transactions, including adjustable-rate mortgage transactions, specified pool transactions, and transactions in collateralized mortgage obligations, issued in conformity with a program of an agency or government-sponsored enterprise, with forward settlement dates. In a letter last week to the Securities and Exchange Commission, more than a dozen industry groups expressed...
Overly conservative accounting, subpar servicing, lack of claims data and a desire to protect taxpayers from mortgage-related losses contributed to the material flaws in Ginnie Mae’s FY 2014 financial statements. Ginnie Mae is working to implement a recommendation by the Department of Housing and Urban Development inspector general to use generally accepted accounting principles (GAAP) in restating its 2014 financial statement and adjusting affected prior-year financials, according to Ted Tozer, president of the agency. Tozer noted...
Now that rates are rising, one might expect Freddie to have a blow-out quarter in 4Q. Will Rep. Garrett issue a statement in February congratulating the GSE on a great job?
The House approved an amendment to remove an extension of higher guaranty fees for Fannie Mae and Freddie Mac with strong bipartisan support. The Neugebauer-Huizenga amendment to H.R. 22, introduced by Reps. Randy Neugebauer, R-Texas, and Bill Huizenga, R-Mich., was adopted by the House on Nov. 5. About 30 industry trade groups, including lenders and builders, rallied behind the effort and sent a letter to Speaker Paul Ryan, R-WI, and former House Speaker Nancy Pelosi, D-CA, earlier this week urging that the g-fee extensions be removed. Without the amendment, a 10 basis point surcharge on Fannie and Freddie g-fees that went into effect in 2012 could have ended up...
The Federal Housing Finance Agency determined that Freddie Mac did not meet all of its low-income and very low-income home-purchase goals for 2014, according to the FHFA’s preliminary annual housing report released on October 30. Under the GSEs’ affordable housing goals, low-income is for home-purchase mortgages to families with incomes no greater than 80 percent of the area median income, and the very low-income home- purchase goal is for families with incomes no greater than 50 percent of AMI. Freddie fell short of meeting both goals. The low-income home-purchase goal was 23 percent and Freddie ended 2014 at 21 percent. The very low-income home-purchase goal was 7 percent and Freddie topped out at 4.9 percent.
A bill to cap the salaries of Fannie Mae and Freddie Mac CEOs at $600,000 is expected to become law, but has been rescheduled for vote in the House sometime during the week of Nov. 16. The budget vote last week, coupled with the debate over the Export-Import Bank and election of a new House Speaker, resulted in the salary cap legislation being postponed for a floor vote at a later date this month, said Rep. Ed Royce, R-CA. Royce introduced the “Equity in Government Compensation Act” back in May. It would suspend the $4 million compensation packages for Fannie’s Timothy Mayapoulos and Freddie’s Donald Layton that were approved early this year after...
Investors will be able to exchange existing Freddie Mac participation certificates for new single securities when the GSE creates new “mirror” securities to help facilitate the transition.The exchange program will be available when the new single security goes live and Freddie plans to keep it open for the foreseeable future. Held in a Federal Reserve account, the mirror securities will not increase the outstanding principal balance of Freddie MBS, the GSE explained in an update on the exchange program. The mirror securities will track existing Freddie MBS but substitute a 55-day payment cycle for Freddie’s current 45-day cycle. Freddie will pay compensation equal to the fair market value of the 10 days of lost float when...