Members of the Federal Open Market Committee kicked around various approaches to winding down the central bank’s third installment of quantitative easing during their policy meeting last month, but ultimately didn’t budge the ship off its bearings. Recently released minutes of the Oct. 29-30 FMOC policy meeting revealed that participants “generally expected that the data would prove consistent with the committee’s outlook for ongoing improvement in labor-market conditions and would thus warrant trimming the pace of purchases in coming months.” However, committee members also considered...
It is all but certain that the Federal Housing Finance Agency will soon have its first permanent and confirmed director since the agency’s inception, following the move late this week by Senate Democrats to invoke the “nuclear option” for presidential nominees. The Senate voted 52 to 48 to change its own rules to permit most executive and judicial nominees to pass by a simple majority vote.
A group of House Democratic lawmakers is warning the Federal Housing Finance Agency that prohibiting GSE access to municipalities that use eminent domain to restructure underwater mortgages would constitute illegal discrimination against minority homeowners. In a letter to FHFA Acting Director Edward DeMarco, a group of 10 House Democrats led by Minnesota Rep. Keith Ellison said Fannie Mae’s and Freddie Mac’s refusal to insure loans seized and rewritten via eminent domain would be illegal under the Fair Housing Act and violate credit discrimination laws.
Private-equity firms such as Pershing Square Capital Management and Fairholme Funds are gobbling up the common and preferred shares of Fannie Mae and Freddie Mac, a trend that may continue as long as the two stay profitable and Congress dithers with how to end their conservatorships. “There’s some value there,” said Brian Harris, a senior analyst with Moody’s Investors Service. “The hedge funds believe the two will continue to earn money.” Industry observers who closely follow the government-sponsored enterprises predict...
Republicans on Capitol Hill might be laying the groundwork for legislation that could scale back the application of the disparate impact theory of legal liability in mortgage lending. Currently, there is no active legislation to that effect pending in the U.S. House of Representatives or the Senate, and industry lobbyists said there is no such interest underfoot. But just the fact that the House Financial Services Subcommittee on Oversight and Investigations held a hearing this week on disparate impact in general had some Democrat supporters of the theory a bit anxious. “My hope is...
Industry stakeholders called upon lawmakers to delay the implementation of hefty increases in flood-insurance premiums as a result of the Biggert-Waters Flood Insurance Act of 2012. However, support among lawmakers for delaying the mandated changes appear to be weak. In a hearing this week in the House Financial Services Subcommittee on Housing and Insurance, Republicans and Democrats apparently were unswayed by community advocates, academics, the National Association of Realtors and the National Association of Home Builders regarding the financial pain being inflicted by the Biggert-Waters Act on homeowners. The sudden, dramatic increase in flood insurance premiums – some by as much as 1,000 percent – are leaving...
Applying certain private mortgage insurance practices and requirements to FHA may not be as ideal as some proponents suggest because they do not fit in the business environment in which the FHA operates, according to a new study from the Government Accountability Office. Nonetheless, the regulatory framework for private mortgage insurers has features that could enhance the transparency of the FHA’s Mutual Mortgage Insurance Fund and Congress’ oversight of FHA’s operations, the study concluded. The GAO did the study at the request of ...
It does not appear to be a matter of whether a Senate housing finance reform bill will include an affordable-housing component but rather how to structure one that gets both Democrats and Republicans behind it. During a hearing this week, Senate Banking, Housing and Urban Affairs Chairman Tim Johnson, D-SD, said that an affordable housing component is “imperative” to any reform legislation that he and Ranking Member Mike Crapo, R-ID, move through committee. “Fannie Mae’s and Freddie Mac’s mission is...
The top Democrat on the House Financial Services Committee said that she and other members on the panel are drafting “an alternative approach” to improve upon the existing housing-finance reform proposals currently circulating in both chambers of Congress. Rep. Maxine Waters, D-CA, noted during a speech at a Bipartisan Policy Center Housing Commission Policy Forum this week that the proposal in progress would encompass the set of principles House Democrats issued in July “with a particular emphasis on preserving an affordable 30-year, fixed rate mortgage.”
Congress is making an important start on GSE reform but a final, tangible product may not come to fruition for several more years, according to Capitol Hill insiders. Speaking at the Mortgage Bankers Association’s annual convention in Washington, DC, last week, former House Financial Services Committee Senior Counsel Michael Borden and former Senate Banking, Housing and Urban Affairs Committee Staff Director Dwight Fettig agreed it’s a virtual certainty that a final reform bill will not materialize during the 113th Congress.
The creation of a U.S. sovereign wealth fund could grease the skids for an end to the conservatorships of Fannie Mae and Freddie Mac.
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