In supplemental materials to his speech, President Obama referenced the GSEs' “failed business model,” adding that taxpayers should never again be “on the hook for bad loans and bailouts.”
The settlement covers damages suffered by Fannie Mae from misrepresentations Lehman was alleged to have made regarding the quality of non-agency product it sold to the GSE.
Despite AEI’s findings, delinquencies on GSE loans continue to fall. In December, for example, Freddie’s single-family delinquency rate totaled 2.39 percent compared to 3.25 percent a year earlier.
The cost of mortgage compliance was a topic making the rounds at the recent ABS Vegas show in Nevada. Attendees, of course, wanted to know who might pay for all the new added costs.
The change resulted in the cessation of dividend payments by the GSEs to Treasury, replacing it with a “sweep” of all almost net profits earned by Fannie and Freddie.
The FHFA IG audit estimates that some 9.5 percent of claims for pre-foreclosure property inspections in 2011 and 2012 resulted in $5 million of overpayments by Fannie Mae.