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Inside The GSEs

December 10, 2008

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GSEs Struggling with Liquidity Risk

Pummeled by rising credit losses and eroding market values for their investments, Fannie Mae and Freddie Mac were felled by a worsening liquidity situation. The problem appears particularly acute at Fannie, which warned in its latest 10-Q that its efforts to manage liquidity risk might be overwhelmed by further deterioration in the financial markets. The continuing problems in the markets have... Read More

FHLB Fannie, Freddie MBS Growth Slows

The Federal Home Loan Banks continued to grow their collective holdings of Fannie Mae and Freddie Mac mortgage-backed securities during the third quarter, but at half the rate seen in the second, according to an analysis by Inside The GSEs of data provided by the Federal Housing Finance Agency. The 12 FHLBanks held a combined $95.10 billion in Fannie and... [Includes one chart] Read More

GSE Support Absent for H4H, FHASecure Programs

Fannie Mae and Freddie Mac have yet to make any demonstrable efforts to provide tangible support for two programs the Bush administration has been pushing for months to help struggling homeowners avert foreclosures via the Federal Housing Administration. One program is the FHASecure program, which allows borrowers with good credit, but who have defaulted on their loans due... Read More

Fed Buys $5 Billion of GSE Debt; Treasury on the Hook

The Federal Reserve started to deliver on its pledge to purchase up to $100 billion of Fannie Mae, Freddie Mac and Federal Home Loan Bank debt. Late last week, the Fed purchased $5 billion worth of the GSEs’ debt maturing in 2009 and 2010, helping to reduce mortgage rates and spreads in the process. Initial purchases are to be mostly fixed-rate, non-callable senior benchmark securities... Read More

Fannie, Freddie Saving Millions from AHF Suspension

Fannie Mae and Freddie Mac won’t have to contribute to a national affordable housing trust fund, at least temporarily, due to their financial difficulties. That reprieve saved the pair tens of millions of dollars in just the third quarter alone. Fannie had been setting money aside for the new affordable housing obligation, according to its third quarter 10-Q filing... Read More

GSE Loan Mods Peaked in June, FHFA Tells Congress

Fannie Mae and Freddie Mac need a more vigorous response to come to the aid of distressed borrowers struggling to avert foreclosure, the Federal Housing Finance Agency told Congress recently, citing a slump in mitigation activities by the GSEs late this summer. During August, the most recent data available, the GSEs reported 15,528 foreclosures – well above the monthly... Read More

GSE Reform Hawk Calls for Full Public Ownership

Lawmakers this week engaged in a considerable amount of Monday-morning quarterbacking over the near-collapses of Fannie Mae and Freddie Mac and what role the GSEs and their senior management may have played in the mortgage market meltdown and resultant freeze of the credit markets. Some members of Congress insisted the former executives recklessly disregarded very clear warnings... Read More

Bank, Thrift Advance Use Diverged in Third Quarter

Federally regulated banks and thrifts took their Federal Home Loan Bank advance use in different directions during the third quarter, with banks registering a big jump while the thrifts recorded a sizeable drop, according to an analysis by Inside The GSEs of the latest data from the Federal Deposit Insurance Corp. The federally regulated banks increased their FHLBank advance use from... Read More

News In Brief

Fannie, Freddie Dodge NYSE Delisting Bullet, For Now: Fannie Mae and Freddie Mac, both under the threat of a delisting action by the New York Stock Exchange, told exchange... Capital Crunch at the FHLBank of Boston Prompts Ban on Excess Stock Repurchases: Stress on the Federal Home Loan Bank of Boston’s capital levels has prompted the GSE to impose a moratorium on... Read More

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