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Inside The GSEs

December 16, 2009

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Should Backstops be Increased By Dec. 31?

The U.S. Treasury’s authority to provide $200 billion each in federal backing to Fannie Mae and Freddie Mac expires at the end of the year, and analysts at Barclays Capital said the agency needs to expand that capability before then, unless worsening losses cause a breach in that threshold and force a receivership of either company.Fannie is most at risk, after having lost about $115.5 billion over... Read More

Concern With Covered Bonds ‘Overplayed’

Investor interest appears to be growing for the development of a robust market for covered bonds in the U.S., even while policymakers here see such instruments as a low-risk, non-GSE alternative to financing and securitization. But fears from the Federal Home Loan Banks that a vibrant covered bond market might undermine their profitable advance business are overstated, according to some... Read More

GSE Securitization Funds Growing Share of Market

Mortgage securitization programs at Fannie Mae and Freddie Mac, with vigorous support from the Federal Reserve and Department of the Treasury, continued to fund a dominant share of new loan production in the third quarter. Newly issued Fannie and Freddie mortgage-backed securities accounted for 73.4 percent of total mortgage originations during the third quarter of... [Includes one graph] Read More

Industry Pros Debate GSEs’ Future Form, Function

The future of beleaguered Fannie Mae and Freddie Mac wasn’t addressed in the massive financial regulatory reform legislation that was passed by the House of Representatives last week, but that’s not keeping industry representatives, think tank policy wonks and GSE observers from keeping the debate alive. Armando Falcon, CEO of Falcon Capital Advisors LLC and a former director at the Office... Read More

House GOP Lays Down GSE Marker With Amendment

Republican members of the House Financial Services Committee last week pushed for the wind-down of mortgage finance superpowers Fannie Mae and Freddie Mac, as the broader House of Representatives passed comprehensive financial regulatory reform legislation, H.R. 4173, the Wall Street Reform and Consumer and Protection Act. The GOP members of the committee, in a move that likely presages... Read More

Freddie Looks to Reclaim $595 Million from Colonial

Freddie Mac is trying to recoup $595 million from Colonial Bank related to borrower payments that had been maintained by the now-defunct Taylor Bean Whitaker Mortgage Corp. “In its capacity as a servicer of loans owned or guaranteed by Freddie Mac, TBW received and processed certain borrower funds that it held for the benefit of Freddie Mac,” the GSE said in an 8-K filing with... Read More

Decline in Bank, Thrift Use of Advances Accelerates

The ongoing decline in Federal Home Loan Bank advance use by their members gained steam in the third quarter, making for the fourth consecutive decline, according to the latest ranking and analysis by Inside The GSEs. The top 40 bank and thrift users of FHLBank advances continued ratcheting down their use of the financial instruments in the third quarter, down to... [Includes one chart and one graph] Read More

FHFA Still to Issue Key GSE Regs, Agenda Shows

The Federal Housing Finance Agency still has two important, solvency-related regulations to develop for the GSEs, its semiannual regulatory agenda, released last week, shows. Among its key long-term actions still pending, the FHFA identified “Minimum Capital – Temporary Increase,” along with “Prudential Management and Operations Standards... Read More

FHLBs Seek Clarification on Director Comp Proposal

The Federal Housing Finance Agency issued a proposed rule in late October that would do away with the statutory caps that were imposed on the annual compensation that could be paid to the members of the boards of directors of the Federal Home Loan Banks. “The proposed rule would allow each FHLBank to pay its directors reasonable compensation and expenses, subject to the... Read More

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