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Inside The GSEs

November 25, 2008

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Fed Sets the Stage for Greater GSE Response

Nearly three months into the federal takeovers of Fannie Mae and Freddie Mac, the Bush administration finally took a significant step toward putting the two GSEs in a position where they can make a substantial contribution to the struggling housing market. This week, the Federal Reserve Board made a $600 billion commitment to buy the debt of Fannie, Freddie, and the... Read More

Surging Advances Keep FHLBs in the Black

Federal Home Loan Bank advance use zoomed past the $1 trillion threshold for the first time during the third quarter, largely fueling positive earnings results for the overall FHLBank cooperative system, as the Banks’ 8,100-plus member financial institutions continued to rely upon advance lending in the current liquidity-starved environment. Throughout the FHLBank system... Read More

Analysts Ponder GSEs’ Role in TARP

As the debate rages on who ought to be the primary beneficiary of the Troubled Asset Relief Program, analysts are wondering why little has been said about the role of Fannie Mae and Freddie Mac as potential purchasers of distressed mortgages. Both GSEs have been under conservatorship with the Federal Housing Finance Agency since September to prevent a financial collapse as a... Read More

Business Strategies Adrift, FRE Reports Record Loss

Days after Fannie Mae announced a record $29.0 billion loss for the third quarter, rival Freddie Mac said it lost $25.3 billion, also a record, with the resulting negative shareholder equity forcing the company to tap its Treasury backstop funding for $13.8 billion. Perhaps just as disturbing, neither GSE announced much of a change in their business strategies to eventually return the... Read More

Widening Spreads Prompt Fed Purchasing Pledge

With weakening spreads taking hold for Fannie Mae and Freddie Mac, the Federal Reserve this week decided it will buy up as much as $100 billion in the direct debt of the two GSEs as well as that of the 12 Federal Home Loan Banks, and as much as $500 billion of mortgage-backed securities that are backed by Fannie, Freddie and Ginnie Mae.“Spreads of rates on GSE debt and on... [Includes one chart] Read More

FHFA, GSEs Make Fresh Push to Delay Foreclosures

Fannie Mae, Freddie Mac and their regulator are increasing their public efforts to delay or hold back at least a portion of the wave of foreclosures threatening the nation’s mortgage finance system. This week, the Federal Housing Finance Agency made a fresh appeal to mortgage loan servicers to support the new Streamlined Modification Program announced earlier this month by the FHFA, the... Read More

GSEs Move Ahead to Toughen Appraisal Guidelines

The Federal Housing Finance Agency and the New York Attorney General’s office still have not finalized their controversial proposal that would bar lenders from using their own appraisers or appraisals performed by companies they own. But that’s not keeping Fannie Mae and Freddie Mac from moving ahead independently to toughen their own rules. In announcement 08-30, Fannie... Read More

Hearing on GSEs’ Collapse, Takeover Rescheduled

The House Oversight and Government Reform Committee has rescheduled for Dec. 9, 2008, its hearing on the collapse and federal takeover of Fannie Mae and Freddie Mac. The hearing had initially been slated for Nov. 20. Rep. Henry Waxman, D-CA, chairman of the committee, is set to question the previous two CEOs at both GSEs over the deterioration of their... Read More

News In Brief

Federal Housing Finance Board Now Officially Extinct, FHFA Says... Bush Names Steve Linick as First IG At Federal Housing Finance Agency... Fannie Mae, Freddie Mac Now Facing Delisting Threat from NYSE:With investor... Freddie Promotes Peter Federico To Serve as Its New Treasurer: In the latest in a sequence of senior... Read More

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