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Inside The GSEs

May 20, 2009

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GSEs’ Plunge to Earth Reflects Hybrid Nature

As Fannie Mae and Freddie Mac lie in Uncle Sam’s intensive care unit known as conservatorship, a review of their long-term economic health reveals just how vulnerable the GSEs became to the forces that crushed the U.S. housing market, all while having to contend with some unique demands. During the early years of the new millennium, Fannie... [Includes one chart] Read More

1Q09 Results Delayed as FHLBs Address OTTI

Non-agency mortgage-backed securities holdings continue to inject chaos into the financial results of the Federal Home Loan Bank System. The most recent installment of this saga involves the Federal Housing Finance Agency, which recently directed the 12 FHLBanks to adopt a common framework for determining “other-than-temporary impairment” for such holdings in order to enhance... Read More

Uncle Sam Expands Comp Limits to More GSE Execs

The recently revised preferred stock purchase agreements that Treasury struck with Fannie Mae and Freddie Mac expand compensation limits on a broader range of senior officials at the GSEs, further challenging the companies in attracting and retaining personnel at a time when they are increasingly critical to implementing the Obama administration’s housing rescue initiatives... Read More

GSEs’ Controls, Procedures Still Inadequate

After more than five years of intensive remediation and perhaps billions of dollars, Fannie Mae and Freddie Mac still have disclosure controls and procedures that are inadequate for the responsibilities they have under federal conservatorship. The continuing problems appear to be more of an issue for Freddie than Fannie, according to their first quarter 10-Q filings... Read More

GSEs Provided $323 Billion in Liquidity in 1Q09

Fannie Mae and Freddie Mac provided approximately $323 billion in additional liquidity to support the mortgage market via its purchase and guarantee activity during the first quarter, the GSEs indicated in their 10-Q filings submitted to the Securities and Exchange Commission last week. Fannie, for its part, purchased or guaranteed an estimated $175.4 billion in... Read More

Federal Support of GSEs Nears $1 Trillion

The federal government’s support of Fannie Mae, Freddie Mac and the Federal Home Loan Banks – including the Treasury’s stock purchase agreements with the GSEs – came to $992.06 billion through the first half of May, a review by Inside The GSEs has found. To date, the Federal Reserve has made gross purchases of Fannie/Freddie mortgage-backed securities of... [Includes one chart] Read More

Obama Would Fund Affordable Housing Fund with $1B

The massive $3.4 trillion federal budget recently proposed by President Obama envisions setting aside $1 billion to finance the affordable housing trust fund that Fannie Mae and Freddie Mac were originally slated to fund last year. “The Housing Trust Fund was originally authorized in the Housing and Economic Recovery Act of 2008, with a dedicated funding stream... Read More

Most FHLBanks Oppose ‘Well Capitalized’ Category

Most of the Federal Home Loan Banks do not support updating their capital classifications with a new “well capitalized” category designed to provide incentives to hold more capital and retained earnings as a cushion. Under an interim rule published Jan. 30 by the Federal Housing Finance Agency, a FHLBank would be considered “undercapitalized” if its capital... Read More

News In Brief

Housing Trust Funds, Charities Suffer While Ads, Sponsorships Continue: The conservatorships of Fannie Mae and Freddie Mac have... FHFA Report Reveals Continuing Weaknesses for the GSEs: Deteriorating non-agency mortgage-backed securities still represent... Moody’s Reaffirms FHLBanks, But Downgrades Chicago FHLB: The latest evaluations from Moody’s Investors Service proved to be a... Read More

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