The U.S. Supreme Court last week unanimously decided a securities fraud case that could cause the Securities and Exchange Commission to act sooner rather than later in bringing enforcement actions against MBS fraud. In Gabelli et al. v. Securities and Exchange Commission, SCOTUS ruled that in an SEC action to recover civil penalties, the five-year statute of limitations begins ticking when the fraud occurs, not when it is discovered. Reversing an opinion by the U.S. Court of Appeals for the Second Circuit, SCOTUS rejected...
Fannie Mae and Freddie Mac could suffer losses of nearly $2 billion on the fair value of their assets if interest rates fluctuate upward by just a single percentage percent, according to the Federal Housing Finance Agencys official watchdog. A white paper issued this week by the FHFAs Office of Inspector General found that despite moves by the Finance Agency and the Treasury to require the two government-sponsored enterprises to substantially downsize their mortgage asset portfolios, interest rate risk remains a significant concern. The increasingly illiquid nature of the GSEs mortgage asset portfolios presents...