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Inside The GSEs

January 28, 2009

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Will Another $45 Billion be Enough?

Fannie Mae and Freddie Mac have indicated in the last few days that they need up to $51 billion to stay solvent as they struggle to cope with the stagnant housing market, increased credit losses, higher debt costs and plummeting fair values for their portfolios. Late last week Freddie got this ball rolling by revealing in a Securities and Exchange Commission filing that it would draw another... Read More

Some FHLBanks Confident in Face of MBS

Increasing market value losses from non-agency mortgage-backed securities are causing trouble for another Federal Home Loan Bank this month, but other Banks appear confident of their ability to withstand what they hope is a temporary drop in the fair value of those holdings until the market rebounds. In the latest installments of this saga, the FHLBank of Seattle indicated late last week... Read More

Super Lenders Account for Growing Share of GSE Biz

Mortgage industry consolidation is putting more GSE mortgage business in the hands of the largest national seller-servicers, according to a new analysis and ranking by Inside the GSEs. The three largest mortgage sellers to Fannie and Freddie in 2008 – Wells Fargo, Bank of America and Chase Home Finance – accounted for 39.4 percent of the home loans sold to the... [Includes one chart] Read More

Fed Accelerates its GSE MBS, Debt Purchases

Government support for the housing agencies and the Federal Home Loan Banks has grown to $76.3 billion since the Federal Reserve program to reduce mortgage costs began in December. Most of that activity, $52.6 billion, has come in the form of direct purchases of mortgage-backed securities from Fannie Mae, Freddie Mac and Ginnie Mae. The remaining $23.7 billion has... Read More

FHFA Proposes New Capital Rules for FHLBanks

The Federal Housing Finance Agency this week released an interim final rule for the Federal Home Loan Banks that addresses both the critical capital level and four capital classification categories – adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized. The interim final rule adopts various criteria to articulate the... Read More

FHFA Urges Non-Agency Sector to Emulate GSEs’ SMP

Fannie Mae and Freddie Mac have sent more than 50,000 solicitations out to struggling homeowners that might be able to qualify under the GSEs’ Streamlined Modification Program, and the companies’ servicers have received “hundreds of thousands of calls,” Federal Housing Finance Agency Director James Lockhart told members of Congress recently. “Potentially hundreds of thousands more... Read More

Feds Take Another Swipe at FHLBanks

The Federal Home Loan Banks continue to face fresh challenges from the policy choices of federal bank and thrift regulators – this time in relation to the Community Reinvestment Act. According to new guidance issued earlier this month by the regulatory agencies, the unpaid dividends that the FHLBanks may retain to support the Affordable Housing Program, instead of being paid out to... Read More

FDIC Rulemaking to Promote Covered Bonds

In a move likely to be watched warily by the Federal Home Loan Banks, the Federal Deposit Insurance Corp. is expected to issue a rulemaking shortly detailing its planned extension of its Temporary Liquidity Guarantee Program to cover the guarantees up to 10 years, which would make covered bonds eligible for the government program. Officials said it would alter the agency’s existing covered bond... Read More

News In Brief

FASB “OTTI” Guide Might Ease FHLB Capital Scare: While concern is mounting in some corners of the Federal Home Loan Bank System regarding the Banks’ escalating... GSEs Face First Quarter Hit From Cramdown Legislation: The effect that mortgage cramdown legislation making its way through Congress might have on individual lenders in the mortgage industry... Read More

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