Fannie Mae and Freddie Mac

Fannie Mae and Freddie Mac

Treasury Should Not Bail Out the GSEs’ Subordinated Debt

“The Treasury knew precisely what it was doing for the subordinated debt holders,” wrote Alex Pollock. “‘These agreements support market stability,’ said then-Treasury Secretary Henry Paulson..., ‘by providing additional security and clarity to GSE debt holders—senior and subordinated—and support mortgage availability by providing additional confidence to investors…etc.’ Treasury slipped that ‘and subordinated’ in there in the middle of the paragraph, without any further comment... Treasury was trapped as an unintended result of the Fannie and Freddie reform legislation of earlier in that bailout year…”

 


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Posted: August 22nd, 2017 | Permalink

FHFA Releases GSE Stress Test Results

“If there was any question whether the GSEs have been sufficiently reformed in conservatorship, there should no longer be a question,” wrote Josh Rosner. “…[E]ven under the most severely adverse scenario, the GSEs demonstrate that if they were allowed to rebuild capital, not at the level of 3.5% as I have been recommending, but at much lower levels, they would continue to remain solvent and able to execute their mandates. This severe scenario is the equivalent of another 100-year flood.”


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Posted: August 9th, 2017 | Permalink

Treasury Foresaw Better Return in Seizing GSEs’ Profits

“Newly unsealed documents show that as early as December 2011, high-level Treasury officials knew that Fannie and Freddie would soon become profitable again,” wrote New York Times’ Gretchen Morgenson. ““The materials also show that government officials involved in the decision to divert the profits knew the change would most likely generate more money for Treasury than the original rescue terms, which required the companies to pay taxpayers 10 percent annually on the bailout assistance they had received.”


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Posted: July 25th, 2017 | Permalink

U.S. Housing Policy Outlook

“As the 115th Congress continues to debate a wide range of fiscal and public policy priorities this summer, the issue of housing finance reform at large remains on the congressional to-do list,” said Corelogic’s Stuart Pratt. “Part of that reform includes examining the future state of the appraisal industry. …While not at the epicenter of broader housing finance reform discussions at this point, addressing the challenges and capitalizing on the opportunities facing the appraisal industry is a topic that is gaining greater levels of attention in the halls of Congress.”  


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Posted: July 10th, 2017 | Permalink

The Time for Housing Finance Reform Is Now

“In the nine years since Fannie Mae and Freddie Mac were placed into government conservatorships, the market has evolved substantially away from the failed system of the past,” testified Ed DeMarco before the Senate Banking Committee. “That process cannot be completed absent bipartisan legislation that deals with the status and charters of the GSEs and addresses related issues such as the role and health of FHA. …While differences remain to be worked out, we are encouraged that compromise solutions are within reach.” 


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Posted: June 30th, 2017 | Permalink

The Power of Prediction in Digital Mortgages


"The rise of digital mortgage lenders is threatening traditional lenders’ market share,” wrote Accenture. “The majority of top mortgage lenders by origination in 2016 (six out of 10) were nonbanks, up from just two in 2011.1 Based on Accenture research and the level of industry disruption and consolidation, 20 to 30 percent of today’s lenders will be gone by 2020. Digital is not just changing the players; it is changing the game.”


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Posted: June 29th, 2017 | Permalink