Federal Housing Finance Agency

Federal Housing Finance Agency

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

Will FHFA Require Lenders to Ascertain Language Preferences in a Loan Application?

“When, if at all, should a mortgage lender or servicer be required to conduct business in a foreign language simply because the consumer has expressed a preference to communicate in a different language? Where does one draw the line in terms of both the number of languages and the scope of the tasks in which a lender should be prepared to conduct business at the request of the consumer? …[D]oes the consumer’s expressed language preference follow ownership of the loan or the mortgage servicing rights…?”


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Posted: July 20th, 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

The GSE Conservatorships Are Not Sustainable Says FHFA Director

“…[I]t is especially irresponsible for the Enterprises not to have such a limited buffer because a loss in any quarter would result in an additional draw of taxpayer support... [T]his could erode investor confidence [,] …stifle liquidity in the [MBS] market and …increase the cost of mortgage credit for borrowers. FHFA has explicit statutory obligations to ensure that each Enterprise …fosters ‘liquid, efficient, competitive, and resilient national housing finance markets.’ To ensure that we meet these obligations, we cannot risk the loss of investor confidence."

 


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Posted: May 12th, 2017 | Permalink