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Elizabeth Warren EMBARRASSES Bank Regulators At First Hearing
Posted on February 13, 2015 Originally posted on Deadly Clear:
WASHINGTON — Bank regulators got a sense Thursday of how their lives will be slightly different now that Elizabeth Warren sits on a Senate committee overseeing their agencies.
At her first Banking, Housing and Urban Affairs Committee hearing, Warren questioned top regulators from the alphabet soup that is the nation’s financial regulatory structure: the FDIC, SEC, OCC, CFPB, CFTC, Fed and Treasury. Read more on Huffington Post.
https://justiceleaguetaskforce.wordpress.com/2015/02/13/elizabeth-warren-embarrasses-bank-regulators-at-first-hearing/
Some investment /retirement funds restricted from penny stocks. Uplist = huge volume.
Tuesday
15 mil. If we got uplisted institutions would pour in.
14 mil. !
Watt Homeowner Relief Vies With Fannie-Freddie Health
http://www.bloomberg.com/news/articles/2015-02-13/watt-homeowner-relief-vies-with-fannie-freddie-health
Bill Ackman Bullish on Fannie Mae, Freddie Mac Feb 13 2015 | 6:58am ET Pershing Square Capital Management boss Bill Ackman told an audience at the Harbor Investment Conference that he likes mortgage financing giants Fannie Mae and Freddie Mac.
"It is the most interesting risk-reward that I am aware of in the capital markets right now," Ackman said when asked about his position in the two companies.
In 2014, Pershing Square became the largest holder of Fannie and Freddie stocks behind the U.S. government. The fund took its first positions in the mortgage giants in 2013.
In December, Ackman said the firm was hoping that the U.S. courts or Congress would restore the value of both securities after the firms were taken over by regulators in 2008. He predicted the shares could be worth $40 to $50.
http://www.finalternatives.com/node/29925
Fri Feb 13, 2015 08:30 PST Fannie reports strong year for Multifamily MBS
Fannie Mae continued in 2014 its strong pace of buying and packaging multifamily loans into mortgage backed securities (MBS) for investors seeking to get a piece of the booming apartment and rental markets last year, the government sponsored enterprise (GSE) reported on Friday .
Fannie issued $28.6 billion of multifamily MBS last year, which was about $100 million more than in 2013, it reported in a news release. Most of this activity came through its Delegated Underwriting and Servicing Program. The GSE also reported that it resecuritized $2.5 billion MBS through its Guaranteed Multifamily Structures program. Fannie issued $12 billion through that program in 2014, which was a record.
"2014 was a strong year for Fannie Mae multifamily activity on all fronts,” said Josh Seiff, vice president of Multifamily Capital Markets & Trading, Fannie Mae, in the news release. Seiff said dozens of new investors participated in its programs.
This past week, analysts told Scotsman Guide News that multifamily has been the top performing commercial sector and could remain strong for the next two or three years. However, the returns are expected to be lower as more apartments and rental units are built and vacancies increase.
Earlier this month, the Mortgage Bankers Association projected that mortgage bankers in 2015 would originate a total of $152 billion in multifamily mortgages.
http://www.scotsmanguide.com/News/2015/02/Fannie-reports-strong-year-for-Multifamily-MBS/
$3 Billion in GSE MSRs Up for Grabs
Ginnie Mae MSRs also for sale
Feb. 13, 2015
By Mortgage Daily staff
A large portfolio of mortgage servicing rights on government-sponsored enterprise loans and a much smaller offering of MSRs on Government National Mortgage Association loans have hit the market.
The GSE offering involves MSRs on around 14,770 residential loans owned or guaranteed by Fannie Mae and Freddie Mac for $3 billion.
All of the mortgages are fixed rate. As well, 100 percent of the portfolio is first lien.
http://www.mortgagedaily.com/stories/MsrSale021315LP.asp
thanks
Freddie Mac Expects Refinance Market to Thrive in 2015 by admin on Tuesday, February 10th, 2015 | No Comments
Refinance MarketAfter dipping below 50 percent at some points in 2014, the mortgage refinance space was healthy again toward the end of the year and data shows the share of refinance applications hovering at a very decent 70 percent. This has largely been driven by a significant decline in mortgage interest rates, which are now at 20-month lows on most reports. Going forward, experts from Freddie Mac believe that the refinance market will continue to thrive this current year, even with the share of refinance applications likely to go down.
According to Freddie Mac, the refinance share may hit the 40 percent mark within the year, a stark contrast to today’s refinance share and the 63 percent recorded in 2013. Still, home prices are still ticking up, and were up by 4.5 percent year-over-year in the December 2014 quarter.
A separate statistical report from CoreLogic has home prices, distressed sales included, up 5 percent in December 2014 compared to the previous December. And it is these stats that make Freddie Mac believe the refinance space will be quite lucrative in 2015.
“Lower mortgage rates, coupled with greater house prices appreciation last year, also brought about a larger share of borrowers cashing out home equity at the time of refinance,” said Freddie Mac deputy chief economist Leonard Kiefer in a statement. “However, while the percentage is up, the total dollar amount declined by nearly $1 billion from the third quarter of 2014, and nearly $4.6 billion from the fourth quarter 2013.”
Freddie Mac also pointed out that the median appreciation of refinanced homes was positive for the first time since 2009, which means more than 50 percent of refinance consumers enjoyed an increase in home equity since they originally took out their mortgage. Further, those who refinanced may also enjoy net savings of about $5 billion in interest over the first year of the new mortgage, down from $20 billion two years ago, but still a lot of savings
In the December quarter of 2014, borrowers’ mortgage rates improved by close to one fourth upon refinancing, with the average reduction in mortgage interest rate at about 1.3 percentage points. There were also 34 percent of homeowners who refinanced into a fully amortizing mortgage with a shorter life of loan, allowing them to pay down the value of their mortgage and build equity faster than they would have on their original mortgage.
So far, data seems very favorable for refinancing, according to reports from both the Mortgage Bankers Association and Freddie Mac. In the most recent MBA report, mortgage applications were up 1.3 percent week-over-week, while the refinance share of mortgage activity was down a bit, but still relatively high at 71 percent.
In Freddie Mac’s latest mortgage rate survey, 30-year fixed-rate mortgages averaged 3.66 percent in the week ended January 29; that is three basis points higher than the previous week’s 3.63 percent, but over 60 basis points lower than the previous year’s 4.32 percent average. According to the housing giant, this should boost the refinance market in the first, or March ending quarter of 2015.
http://originatortimes.com/freddie-mac/freddie-mac-expects-refinance-market-to-thrive-in-2015/
It would be hard to paint shareholders all as rich hedge fund owners if shareholders would go on a hunger strike in D.C. It would get a flood of media attention if 200 shareholders who have been wiped out are all sitting around doing the Gandhi. Bruce and Bill would not participate. I guess they could always pay someone to sit in for them.
Thanks Zargis
Acting FHA Chief Joins Five Star Government Forum Lineup
Author: Brian Honea in Daily Dose, Government, Headlines, News February 6, 2015 0
GebreThe Five Star Institute announced the addition Friday of Biniam T. Gebre, acting commissioner of the Federal Housing Administration (FHA), as a featured speaker at the Sixth Annual Five Star Government Forum on March 18 at the Newseum in Washington, D.C.
Gebre will sit down for a one-on-one interview with Five Star Institute President and CEO Ed Delgado to discuss FHA policies, standards, and programs impacting housing and homeownership across the United States.
Gebre joined FHA in July 2013 as HUD's General Deputy Assistant Secretary for the Office of Housing and was named Acting Commissioner of FHA in October 2014. He has co-led several major priorities for HUD since joining the Department a year and a half ago, including efforts to transform how HUD delivers rental assistance, policies to modernize and preserve FHA's 80-year history of providing affordable access to credit, and initiatives to improve the Office of Housing.
Prior to joining HUD, Gebre was a Principal at McKinsey & Company, where he led many engagements on housing finance, risk management, leadership development, and organizational effectiveness. He co-founded the McKinsey Center for Government, McKinsey's global hub for research, collaboration, and innovation in government performance. He has also been the founding leader of the Development Agencies and International Aid Practice and of the Real Estate Finance Practice.
Gebre has a BA from Williams College in Chemistry and an MBA in Finance and Economics from Northwestern University.
The Sixth Annual Five Star Government Forum is a unique opportunity for the leaders in mortgage servicing to join together with leaders from the nation's capital and take part in an open and honest dialogue about the most pressing issues that affect the entire housing economy. Featured speakers will include U.S. Representative Randy Neugebauer from Texas, officials from government agencies such as Fannie Mae, Freddie Mac, Ginnie Mae, HUD, Treasury, and CFPB, and executives from the nation's top lenders and servicers.
Editor's note: The Five Star Institute is the parent company of MReport and theMReport.com.
http://themreport.com/news/government/02-06-2015/acting-fha-chief-joins-five-star-government-forum-lineup
Fannie Mae Redemption text WASHINGTON, Feb. 5 /PRNewswire-FirstCall/ -- Fannie Mae (NYSE: FNM) will redeem the principal amounts indicated for the following securities issues on the redemption dates indicated below at a redemption price equal to 100 percent of the principal amount redeemed, plus accrued interest thereon to the date of redemption:
Principal Security Interest Maturity CUSIP Redemption
Amount Type Rate Date Date
-------------- -------- -------- ------------- --------- -------------
$25,000,000 MTNR 5.000% Feb. 15, 2023 3136F8S71 Feb. 15, 2010
$200,000,000 MTNR 5.000% Feb. 15, 2023 3136F8X59 Feb. 15, 2010
$50,000,000 MTNR 5.500% Feb. 15, 2023 3136F8Z65 Feb. 15, 2010
$40,000,000 MTNR 5.000% May 15, 2023 3136F9PF4 Feb. 15, 2010
$30,000,000 MTN 6.050% Aug. 15, 2025 3136F7JA6 Feb. 15, 2010
$30,000,000 MTN 6.125% Aug. 15, 2035 3136F7JP3 Feb. 15, 2010
$15,000,000 MTN 2.000% Aug. 16, 2013 3136F94D2 Feb. 16, 2010
$1,100,000,000 MTN 5.550% Feb. 16, 2017 31359M5G4 Feb. 16, 2010
$130,000,000 MTN 2.000% Feb. 17, 2012 3136FHAQ8 Feb. 17, 2010
$1,000,000,000 MTN 2.500% Feb. 17, 2012 3136FHBE4 Feb. 17, 2010
$200,000,000 MTN 2.213% Aug. 17, 2012 3136FH4B8 Feb. 17, 2010
$301,500,000 MTN 2.240% Aug. 17, 2012 31398AYS5 Feb. 17, 2010
Fannie Mae exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America's secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to home buyers. Our job is to help those who house America.
This press release does not constitute an offer to sell or the solicitation of an offer to buy securities of Fannie Mae. Nothing in this press release constitutes advice on the merits of buying or selling a particular investment. Any investment decision as to any purchase of securities referred to herein must be made solely on the basis of information contained in Fannie Mae's applicable Offering Circular, and that no reliance may be placed on the completeness or accuracy of the information contained in this press release.
You should not deal in securities unless you understand their nature and the extent of your exposure to risk. You should be satisfied that they are suitable for you in the light of your circumstances and financial position. If you are in any doubt you should consult an appropriately qualified financial advisor.
SOURCE Fannie Mae
http://www.prnewswire.com/news-releases/fannie-mae-redemption-83633712.html
FINANCIAL AGENCY AGREEMENT for a HOMEOWNERSHIP PRESERVATION PROGRAM under the EMERGENCY ECONOMIC STABILIZATION ACT OF 2008
This Financial Agency Agreement (FAA) is entered into as of February 18,2009 (Effective
Date), by and between the u.s. Department ofthe Treasury (Treasury), and Fannie Mae
(Financial Agent).
http://www.treasury.gov/initiatives/financial-stability/procurement/faa/Financial_Agency_Agreements/Fannie%20Mae%20FAA%20021809.pdf
@USTreasury: $FNMA and $FMCC are Agents of the US Government @fanofred_Posted on February 6, 2015 by admin
The US Treasury has had these types of Agreements with other financial institutions in the past. However, at a time when Treasury is claiming they have no direct influence over FHFA, the Conservator, Treasury has a direct control over at least a portion of the management of Fannie Mae and Freddie Mac, the Conservatees.
At issue in many of the lawsuits between shareholders and the US Government is the contention that US Treasury is directing the actions of FHFA, which by law is designed to be an independent agency. In fact, the following is written in HERA:
“When acting as conservator or receiver, the Agency shall not be subject to the direction or supervision of any other agency of the United States or any State in the exercise of the rights, powers, and privileges of the Agency.”
So, if Treasury is forbidden by law to direct FHFA’s actions while Fannie Mae and Freddie Mac are in Conservatorship, it is assumed that Treasury is also forbidden to directly control the actions of Fannie and Freddie, right?
However, Treasury entered into Financial Agency Agreements directly with Fannie and Freddie on February 18, 2009, which run until February 17, 2019. The funds associated with the agreements are $534 million for Fannie Mae and $379 million for Freddie Mac. Remember, the Conservatorships that were forced upon Fannie and Freddie started on September 6, 2008.
There does not seem to be an “arms-length” relationship between Treasury and Fannie/Freddie once the forced Conservatorship began. In fact, just the opposite exists.
The following language on Treasury’s website and within the Agreements show that the US Treasury is directing at least some of the actions of Fannie and Freddie.
“Financial agents act on behalf of the Government during the performance of their duties under an agent-principal relationship with Treasury. Financial agents have the fiduciary obligation to protect the interests of the United States.
Pursuant to the authority of the Secretary of the Treasury under the Act, the Treasury hereby designates and authorizes the Financial Agent to act as a financial agent of the United States under the terms and conditions of this FAA to perform certain services as more fully described in Exhibits A and C. The Treasury may, in its sole discretion, modify, add to, or reduce the specific services required under the general scope of this FAA by providing written notice to the Financial Agent.
The Treasury may periodically issue instructions through bulletins, letters, or other communications, consistent with this FAA, which will further describe or clarify the scope of the duties and services of the Financial Agent under this FAA.”
The US Treasury has had these types of Agreements with other financial institutions in the past. However, at a time when Treasury is claiming they have no direct influence over FHFA, the Conservator, Treasury has a direct control over at least a portion of the management of Fannie Mae and Freddie Mac, the Conservatees.
Fannie Mae FAA 021809
Freddie Mac FAA 021809
http://www.treasury.gov/initiatives/financial-stability/procurement/faa/Pages/faa.aspx
http://www.glenbradford.com/2015/02/ustreasury-fnma-and-fmcc-are-agents-of-the-us-government-fanofred_/
Mortgage Refinancings Should Increase This Year, Says FreddieMac
by admin on Thursday, February 5th, 2015 | No Comments
Homeowners who refinanced late in 2014 saved $2,500 yearly in interest on a $200,000 loan, said FreddieMac in a report issued Wednesday.
With interest rates lower, the federal agency, which guarantees home loans, expects refinancings will increase in the first quarter of this year.
For the first time since 2009, the rising housing market allowed over half of consumers refinancing to have more in home equity than the money they contributed as down payments.
“Over the course of last year, borrowers continued to take advantage of near record low mortgage rates to lower their monthly payments, shorten their loan terms and overwhelmingly choosing the safety of long-term fixed-rate mortgages,” the study said
About a third of borrowers who refinanced in the fourth quarter shortened the length of their mortgage.
Since the recession, more consumers are making bigger mortgage payments to increase their home equity before refinancing.
Freddie noted last year more than 95 percent of refinancing homeowners chose a fixed-rate loan.
http://originatortimes.com/freddie-mac/mortgage-refinancings-should-increase-this-year-says-freddiemac/
Berkowitz sticks to contrarian guns as investors exit Fairholme Fund By Investment News on February 5, 2015
Bruce Berkowitz defended his strategy at Fairholme Capital Management of investing in stocks shunned by others after his marquee fund suffered its fourth straight year of outflows.
“Buying hated companies requires patience and courage of conviction,” Mr. Berkowitz, 56, said Tuesday in a presentation to investors. “There is no free lunch.”
Mr. Berkowitz, who was named the domestic equity fund manager of the decade by Morningstar Inc. in 2010, has underperformed just about all of his rivals over the past 5 years, according to the research service. The Fairholme Fund has shrunk to about $6.6 billion as of Dec. 31 from $18.8 billion at the end of 2010, according to Morningstar.
(Related read: Berkowitz rolls the dice on Fannie, Freddie)
Mr. Berkowitz said he’s confident in the long-term prospects of companies including Bank of America Corp. American International Group Inc., Sears Holdings Corp., Fannie Mae and Freddie Mac. Securities of the two mortgage finance companies tumbled in October, contributing to the Fairholme Fund’s 2.7% loss last year. The fund has dropped 8.4% since Dec. 31.
“We will look wrong until markets believe we are right,” said Mr. Berkowitz, who scheduled Tuesday’s event to respond to investor e-mails. “Given the human condition, we are much less comfortable answering when the crowd will agree with us.”
AIG and Bank of America, the largest positions in his Fairholme Fund, can gain in value because the shares trade for less than book value, a measure of assets minus liabilities, he said. The firms will also profit when interest rates rise, he said.
FANNIE-FREDDIE
Fannie Mae and Freddie Mac are crucial to the U.S. housing market and can’t be replaced, Mr. Berkowitz said. Investments in the government mortgage firms have weighed on the fund’s recent performance. Preferred shares of the two have lost more than half their value since Fairholme suffered a setback in a legal bid to force the bailed-out companies to share profits with private stockholders.
The U.S. seized the companies in 2008 and changed the terms of the bailout in 2012 to direct profits from the firms to the government. Mr. Berkowitz reiterated that the terms are illegal and said investors should remember, “we’re in America,” not the Soviet Union or Venezuela.
Bets on Fannie Mae and Freddie Mac account for 8.7% of the Fairholme Fund’s holdings as of Nov. 30, according to the fund’s annual report. About 46.6% of assets were in AIG and 20.5% in Bank of America.
SEARS VALUE
Mr. Berkowitz also said investors fail to appreciate the value of real estate owned by Sears. He said losses from the struggling firm’s retail business will eventually end and called the bet a once-in-a-lifetime opportunity.
The fund manager also discussed a wager on Leucadia National Corp., which owns investment bank Jefferies Group. Mr. Berkowitz cited Leucadia’s book value as one reason for the investment, although one strike against the company is that some of its most valuable assets are employees who can depart.
“We believe that in the long-term our estimates of value will be realized,” Mr. Berkowitz said in discussing his investing strategy. “We buy securities that are priced to fail.”
Investors need to welcome short-term fluctuations in stocks, because those changes give Fairholme the opportunity to make investments when values and market prices diverge.
“We need volatility to prosper, we need false perceptions,” Mr. Berkowitz said. “Risk does not equal volatility.”
http://growthfinancial.net/2015/02/berkowitz-sticks-to-contrarian-guns-as-investors-exit-fairholme-fund/
Fannie Mae is out with its 2015 housing outlook and things are looking positive… sort of.
The group revised its previous GDP estimates to 3.1%, up from 2.7%, and said that the economy would “drag housing higher,” meaning that both the economy and housing will pick up speed this year, but the economy will improve at a greater clip. Fannie Mae currently forecasts a 5.8% increase in home sales for 2015.
“In this expansion, housing has been atypical in that it usually leads an economic expansion," says Doug Duncan, Chief Economist at Fannie Mae. After all, we've all heard investing legend Warren Buffett say housing, and real estate, drive the economy, and Duncan agrees. This recovery, though, is atypical. "This time[housing] has dragged... It’s a better year than 2014 and 2013 but it’s not the breakout year that some people are forecasting.”
That breakout year will only come once Millennials feel that their incomes are secure enough and mobility is less of an issue, says Duncan. After all, Millennials are known "job-hoppers" who may not be eager to sign up for a mortgage when they're not settled on a career. First-time homebuyer numbers have slipped, with the percentage of buyers at 33%, below the long-term average of 40% and at a 27-year low. According to the U.S. Census Bureau, almost half of Americans between the ages of 25 and 34 say they do not expect to purchase a home in the next three years.
Meanwhile, says Duncan, boomers have “peaked and they're moving off the scene.” Gen X’ers are driving the housing market, but they represent a much smaller population than Millennials or boomers. Until Millennials are ready to buy, we’re stuck in a holding pattern.
We’ll know housing is finally having its breakout year when we see growth clock in at around 10%, says Duncan. “I tend to look at the construction side of things. Our view is that when construction is aligned with our demographics, we’ll be building between 1.5 and 1.6 million housing units on an annual basis.” This year, Fannie Mae expects to see about 1.15 million units built, still quite a way from normal.
There's also the issue of credit; many believe tougher regulations on mortgages have caused a tightening of credit that's stifling the housing market. But Duncan disagrees: “Demand weakness trumps credit tightness." While credit is tighter, that matters less than the fact that people are concerned about employment and stabalizing income.
On the good news side of things, Duncan predicts that mortgage rates will remain steady through 2015. “We think the Fed is low for long and if they move to increase rates they’ll be short term rates and that won’t be until September,” he says. Overall, there’s probably “no better time to buy a house than today.”
As for gas prices, which many economists say will help drive consumer spending and the economy, Duncan says that boost won't extend all the way to housing. He sees the break from gas going towards paying down debt obligations and increasing current consumption but “in order for that to reflect on housing they’d have to believe that was a long-term change in the cost of gas and I don’t think they’re there yet.”
http://finance.yahoo.com/news/there-s-no-better-time-to-buy-a-house-than-today--fannie-mae-120236472.html
Sub-Prime Mortgages that Led to the Foreclosure Crisis is False
Posted by Gerson Va on February 5, 2015
Recently SEC (Securities and Exchange Commission) entered into the war against Fannie Mae and Freddie Mac. The commission fielded a legal suit against three of the executive from each of the companies. The charge was that the disclosures they'd made were “materially false” regarding the portfolio sizes dealing with sub-prime mortgages.
Robert Khuzami the enforcement chief of SEC said that the action indicted that “all individuals, regardless of their rank or position, will be held accountable”. But this statement has to be taken with a pinch of salt because SEC is now playing up the gallery.
The charge is unusually weak. Two scholars of American Enterprise Institute (noted for its conservative leanings), Peter Wallison and Edward Pinto, have concluded that Fannie Mae and Freddie Mac started off the crisis and led the private sector into this quagmire because of their sub-prime lending. The data presented by Wallison and Pinto is exaggerated because all types of loans, excluding prime ones, have been lumped into the sub-prime category.
For instance Alt-A loans may have had the appearance of sub-prime mortgages but they were given only to those with high credit scores.
No internal Internet mails have shown that the executives contradicted any of the statements they'd made in public. There were no instances of dubitable insider sale of stocks. The financial statement disclosures of Fannie and Freddie clearly indicate that they'd been transparent in outlining the credit features of the portfolios dealing with mortgages, although they didn't brand any non-traditional loan as sub-prime.
About one year previously a shareholder had brought a suit against Fannie Mae charging the agency for not making proper disclosures. The judge had thrown out the suit saying that the disclosures made on sub-prime portfolio of the firm was adequate.
Default data is missing from the complaint filed by SEC. Wallison and Pinto have ignored this conveniently. The fact is that despite all shortcomings, Fannie Mae and Freddie Mac had some principles about the loans that were non-prime that they made. To prove it they've the default figures. This is the truth.
David Min, criticizing Wallison points out that during the second quarter of last year (2010) the rate of delinquency on all the loans guaranteed by Fannie Mae and Freddie Mac was 5.9%. This can be contrasted with the national average – 9.11%.
- See more at: http://smiloans.com/sub-prime-mortgages-that-led-to-the-foreclosure-crisis-is-false-2/#sthash.5I62cfTn.dpuf
http://smiloans.com/sub-prime-mortgages-that-led-to-the-foreclosure-crisis-is-false-2/
http://smiloans.com/sub-prime-mortgages-that-led-to-the-foreclosure-crisis-is-false-2/
Housing Finance chief Mel Watt brushes aside Twitter attack
By Kevin G. Hall
WASHINGTON — Mel Watt has 99 problems, but Rep. Robert Pittenger isn’t one of them.
Watt, a Democrat and former congressman from Charlotte, N.C.’s 9th Congressional District, now heads the Federal Housing Finance Agency in Washington. He was the target of blistering tweets a week ago from Pittenger, a Republican and Queen City lawmaker from the 12th District.
It’s not unusual for political partisans to lob insults at each other, but Pittenger’s tweets grabbed attention because they crossed normal decorum, in which personal attacks on fellow Charlotteans are uncommon.
“Washington policies, supported by Mel Watt, helped put people in homes they couldn’t afford to keep,” read one tweet from Pittenger, in a statement that looks past how Wall Street banks drove the no-documentation, interest-only and adjustable-rate mortgages that blew up in the housing market in 2007-2008.
The tweets came as Watt testified before a hearing of the House Financial Services Committee.
In an interview Wednesday with economic reporters atop his offices that look out at the Capitol, Watt shrugged off the harsh comments.
“I don’t have any local politics anymore. I don’t have any national politics anymore,” Watt said in a measured response.
As head of the agency that regulates mortgage-finance titans Fannie Mae and Freddie Mac, Watt’s job is to ensure the adequate supply and availability of mortgages for Americans of all income groups. Since taking the job in early 2014, Watt has kept a low profile, seldom weighing in on issues or doing interviews with reporters.
“I made a commitment to FHFA staff that I would not express personal opinions,” explained Watt, adding that he is now data and research-driven and that “I just don’t have any politics anymore.”
Pittenger and fellow Republicans are critical of Watt’s plan to allow Fannie and Freddie to purchase loans from lenders in situations where borrowers have a down payment of only 3 percent. They charge that this amounts to a return to the loose lending standards that preceded a housing-market meltdown in 2008.
In the hearing and again with reporters Wednesday, Watt has countered that there will be a number of safeguards, including higher credit scores and housing counseling, and that no-document loans and adjustable rate mortgages with low initial teaser rates no longer exist.
As for Pittenger’s personal lobs, which went out in real time as Watt testified before the Financial Services Committee on which he long sat, Watt insisted he is not bothered.
“I have no interest in … a public debate or a private debate with Rep. Pittenger,” said Watt. “He’s still a politician. I’m not holding that against him. He’s a personal friend of mine, at least I consider him a friend.”
Read more here: http://www.thestate.com/2015/02/04/3968779/housing-finance-chief-mel-watt.html#storylink=cpy
http://www.thestate.com/2015/02/04/3968779/housing-finance-chief-mel-watt.html
Housing regulator downbeat on prospects for principal reductions
By Lindsay DunsmuirWASHINGTON Wed Feb 4, 2015 2:17pm EST
(Reuters) - The top U.S. regulator of Fannie Mae and Freddie Mac on Wednesday played down the likelihood of reducing the loan size of homeowners still under water, saying such a move would also have to be a "win" for taxpayers.
Any program to help those whose mortgage loan balance is more than their house is worth would be "substantially narrower" than a lot of people want, Federal Housing Finance Agency director Mel Watt said during a roundtable with reporters.
Watt, a former 20-year Democratic congressman who has been at the helm of the agency for just over a year, came under fire from Democratic lawmakers in November for not taking a more aggressive approach to principal reductions..
At issue is balancing relief for homeowners with the interests of taxpayers, who support the government-controlled mortgage-finance giants. "Is there someplace where there is a win for the borrower and a win for Fannie and Freddie and therefore the taxpayer?" Watt said.
He declined to offer a concrete timeline for any decision.
In the meantime, the FHFA has been promoting other policies to help struggling homeowners, such as allowing eligible Americans to buy back Fannie- or Freddie-backed foreclosed homes at current market value.
The FHFA has a number of decisions to make over the next few months from new eligibility requirements for private mortgage insurers to whether to raise or lower the amount Fannie and Freddie charge lenders to guarantee loans.
An action on guarantee fees is anticipated by April.
Some in the mortgage industry think Watt may ease the pricing adjustments on those fees for less-creditworthy borrowers to chime with the FHFA's affordable housing goals and possibly raise the base guarantee fee slightly to compensate.
Watt could also remove the adverse market charge, an additional cost to lenders introduced in 2008 to improve the mortgage duo's financial health amid mounting losses.
In contrast to his predecessor, Watt has prioritized the FHFA's affordable housing goals by compelling Fannie and Freddie to allow down payments as low as three percent of a property's value and to begin paying into an affordable housing fund, actions decried by congressional Republicans.
Fannie Mae and Freddie Mac buy mortgages from lenders, which they package into securities and mostly sell to investors.
Watt rejected criticism from the banking industry on the agency's proposal for tightened criteria on Federal Home Loan Banks membership that would effectively shut out lightly regulated captive insurers, wholly owned entities created to insure their parent companies against risks.
"We are the regulator and it's our responsibility to stop the abuse," he said.
http://www.reuters.com/article/2015/02/04/us-usa-housing-idUSKBN0L820E20150204
Judge: Bank of America can't have a new Hustle mortgage trial
Feb 4, 2015, 10:46am EST Updated: Feb 4, 2015, 10:52am EST
Chris Keane | BLOOMBERG
Bank of America will have to pay $1.3 billion in civil fines over the Hustle mortgage fraud case.Adam O'DanielFinance Editor-
Charlotte Business Journal
A federal judge has denied Bank of America's request for a new trial over Countrywide Financial's "Hustle" mortgage program.
Bank of America Corp. (NYSE:BAC) had asked Judge Jed Rakoff to toss out a jury's 2013 verdict that found BofA liable for civil mortgage fraud and required it to pay a $1.3 billion fine. But the judge on Tuesday ruled "the jury's conclusion that this was a massive and intentional fraud was amply supported by the evidence," according to The Wall Street Journal.
BofA is expected to appeal.
In July, the Charlotte-based bank was ordered to pay a $1.3 billion fine as its penalty in the civil mortgage fraud case, now known for its so-called "The Hustle" program. The verdict came after courtroom testimony in 2013 that individual loans made at Countrywide Financial were rushed through a "High-Speed Swim Lane" or "HSSL" and then sold to Fannie Mae and Freddie Mac.
The bank contended the evidence in the trial did not support the jury's decision, and it argued the program ended before BofA purchased Countrywide.
This week's decision comes as BofA is closer than ever to putting its massive mortgage woes in the past. Last year, BofA and the U.S. Department of Justice reached a $16.7 billion accord over mortgage misdeeds committed by Countrywide as well as BofA's Merrill Lynch unit and its own legacy mortgage unit. That deal marks the largest legal settlement in history between a single U.S. company and the federal government.
Adam O'Daniel covers banking, entrepreneurs and technology for the Charlotte Business Journal.
http://www.bizjournals.com/charlotte/blog/bank_notes/2015/02/judge-bank-of-america-cant-have-a-new-hustle.html
Feb. 4, 2015 SPECIAL REPORT: Multifamily Market is Enjoying the Best of Times. Here’s Why. By Keat Foong, Executive Editor
San Diego—
The multifamily market is “in the middle of some of the best times this business is going to experience,” commented the head of Fannie Mae’s multifamily division.
Jeffery Hayward, executive vice president and head of the Multifamily Mortgage Business at Fannie Mae, made the remarks during a meeting with reporters this week at the Mortgage Bankers Association’s (MBA) Commercial Real Estate Finance/Multifamily Housing Convention & Expo.
Hayward said that apartment vacancy rates are now at all-time lows. At the same time, demographic forces are sustaining the increase in the inflow into the market of 24- to 34-year olds at their peak renting age. As a result, current vacancy rates may continue to experience downward pressure in the near future.
Fannie Mae announced that it financed $28.9 million in multifamily loans in 2014, compared to $28.8 billion in financing provided to the sector in 2013. Altogether, 446,000 multifamily units were financed last year by the agency. About 99 percent of these loans were securitized through Fannie Mae’s MBS execution.
“I look forward to working with our partners in 2015 to remain the leading source of financing and securtization for quality rental housing in the U.S., while balancing risk and return—in every market, for every income level, every day,” said Hayward.
Hayward said that fundamentals are in place for Fannie Mae to see healthy financing activity in 2015. Fannie Mae’s regulator the Federal Housing Finance Agency has imposed a footprint limit of $30 billion on Fannie Mae’s multifamily financing. According to Hayward, this financing cap will not be changing in 2015.
Fannie Mae and Freddie Mac account for about 30 percent of the multifamily financing market. Freddie Mac, meanwhile, executed $28.3 billion in loan purchase and bond guarantee volume for its multifamily business in 2014, up 10 percent from $25.9 billion the previous year.
Walker & Dunlop LLC, Wells Fargo Multifamily Capital, Berkadia Commercial Mortgage LLC, CBRE Multifamily Capital Inc. and PNC Real Estate ranked among Fannie Mae’s top DUS producers in 2014
http://www.multihousingnews.com/features/special-report-multifamily-market-is-enjoying-the-best-of-times-heres-why/1004114492.html
Will the 2008 Financial Crisis Investigation Cost Moody's (MCO) Billions?
by Zacks Research Staff Published on February 02, 2015 | Nothing good can come to you when you’ve got the US Justice Department “on your assets”. Enough with the jokes though, this is very serious news to anyone currently invested in Moody’s (MCO - Analyst Report). The company is under investigation for its conduct in giving good ratings to complex, risky securities involved in the financial crisis of 2008.
The company is a major credit rating firm, known for rating bonds and other securities. Moody’s (MCO - Analyst Report) had a key role in the unfolding of the 2008 financial crisis, along with Fannie Mae (FNMA), Freddie Mac (FMCC), and others.
The Justice Department is nearing the end of its case against Standard & Poor’s for their controversial ratings on risky securities. As the book is closing on the Standard & Poor’s, a new one opens. The subject of this new case is none other than Moody’s (MCO - Analyst Report).
If this investigation results in a lawsuit, the long term prospect on Moody’s is likely to be unfavorable to investors. The investigation against Standard & Poor’s could result in a settlement of well over $1 billion. A price to pay like this for Moody’s would definitely hit the company's bottom line, as it is worth noting that MCO has a current market value around $19 billion.
Moody’s stock has experienced high volume trading today, upon news of the investigation against the company. The average trading volume is about 1 million shares. Investors across the board are engaging in high trading activity today though, with about 5 million shares being traded to start February. We did see a broad rally in stocks to end Monday trading though, but MCO still finished lower by 2.2% today.
http://www.zacks.com/stock/news/162774/will-the-2008-financial-crisis-investigation-cost-moodys-mco-billions
Obama's Housing Recovery Plan Could Bring Another Great Recession
By Peter J. Wallison, Fox News
When President Obama announced two weeks ago that he was going to lower the insurance premium for risky FHA mortgages, the country reacted with a yawn. Americans seemed to be asking: What’s that got to do with me?
A whole lot, it turns out.
The American people might snap to attention if they understood that the president is proposing to go back to the same policies that brought on the 2008 financial crisis.
That’s the problem we face today. The American people — after being told for years that the financial crisis was caused by Wall Street greed and the failure to regulate banks and other financial institutions — simply do not know that it was government housing policy that caused the financial calamity that shook the nation seven years ago.
The stark facts are these: in 2008, there were 55 million mortgages in the U.S., of which 31 million were subprime or otherwise risky because they had low or no downpayments and other bad features.
Of these 31 million mortgages, 76 percent were on the books of government agencies like the Federal Housing Administration (FHA) and Fannie Mae and Freddie Mac, the two government-backed mortgage giants that went insolvent in 2008 and are now under government control.
What this means, without doubt, is that the government created the demand for the mortgages that eventually crashed the financial system. The government wanted these mortgages to be made.
In proposing a cut in the FHA insurance premium, the president is putting both taxpayers and homeowners at risk. The taxpayers are at risk because the lower premium will not enable FHA to cover its risks. Like any insurer, the FHA has to take in enough in premiums to pay for its losses on defaulted mortgages. Lowering the premium means there is a taxpayer bailout in the FHA’s future.
http://nation.foxnews.com/2015/02/02/obamas-housing-recovery-plan-could-bring-another-great-recession
FHFA Unveils Financial Rules for Nonbank Mortgage Servicers
Nonbank Lenders, Servicers Doing Business with Fannie, Freddie Will Need Minimum Net Worth in the Millions
By Joe Light
Updated Jan. 30, 2015 6:01 p.m. ET
The Federal Housing Finance Agency on Friday unveiled financial requirements for nonbank lenders that originate and service mortgages, a change designed to reduce risk at mortgage-finance companies Fannie Mae and Freddie Mac .
The proposed standards are directed at nonbank mortgage companies such as Ocwen Financial Corp. and Nationstar Mortgage Holdings Inc. These companies sometimes originate mortgages, but also buy from lenders the right to collect mortgage payments from borrowers, send payments to mortgage investors and process foreclosures.
The standards could affect the availability of mortgages to some borrowers because some nonbanks may need to divert resources to meet the requirements. On the other hand, the proposal appears to be less stringent than some analysts expected.
Nonbank lenders and servicers that do business with Fannie and Freddie will need to have a minimum net worth of at least $2.5 million plus 0.25% of the unpaid principal balances of all the mortgages they service, said the FHFA, which regulates Fannie and Freddie. Before, Fannie and Freddie set requirements based only on their own mortgages managed by the servicers.
The servicers will also need other liquidity requirements and a tangible net worth—excluding goodwill and other intangible assets—that is equal to at least 6% of the servicer’s total assets, a standard Fannie Mae already had in place.
Setting capital standards for the companies has taken on increased urgency since the financial crisis, as such companies purchased the rights to service billions of dollars in mortgages from traditional lenders, such as Wells Fargo & Co. and Bank of America Corp.
Nonbank specialty servicers at one time were seen as a solution to larger banks that wanted to unload the responsibilities of servicing difficult loans. By specializing in the worst mortgages, the theory went, the companies could provide better customer service to borrowers at a lower cost than could be achieved by large banks.
However, the trend also increased risk at Fannie and Freddie, which could suffer losses if a company that serviced loans that the companies backed didn’t have the wherewithal to handle a downturn and uptick in defaults.
Because Fannie Mae and Freddie Mac guarantee such a large portion of the mortgage market, few large servicers could survive without abiding by the new standards.
After the FHFA released the proposal, a Nationstar spokesman said the company “is in full compliance with the proposed standards with significant cushion.” An Ocwen spokeswoman didn’t have an immediate comment.
The difficulties of servicing delinquent mortgages has been in the spotlight recently, with a series of regulatory missteps sending servicer Ocwen’s stock down by nearly 60% this year.
Mortgage servicers handle the typically mundane process of collecting monthly payments on behalf of trustees and investors. Difficulties arise when borrowers default, and servicers must embark on the lengthy and sometimes convoluted process of attempting to get a homeowner current again or foreclosing on the home.
Over time, and with new borrower-friendly laws and regulations, the costs of servicing such loans has skyrocketed.
In 2008, as the crisis began to deepen, it cost $482 a year on average to manage a seriously delinquent mortgage, eight times the cost of a current loan, according to the Urban Institute and Mortgage Bankers Association. By 2013, it cost $2,357 annually to manage a typical nonperforming loan, more than 15 times the cost of servicing current loans.
With rising servicing costs, some lenders say they have shied away from making mortgages to riskier borrowers, even if the loans themselves could qualify for government backing. If some nonbank servicers must raise capital to meet the new rules or hold off on servicing more mortgages, that could increase borrowers’ mortgage costs or lessen availability.
Fannie and Freddie don’t make loans, but buy them from lenders, package them into securities and provide guarantees to make investors whole in case of default.
So-called specialty mortgage servicers, such as Ocwen, built their businesses on the notion that they could service nonperforming loans at a lower cost than the big lenders. A lender such as Wells Fargo could sell the rights to service its difficult mortgages to Ocwen, which would attempt to use automated computer systems and other innovations to save money and turn a profit.
The shift of mortgage servicing to nonbanks “has created a set of issues that we’ve had to deal with because some of them, even though they might have been better servicers, were not necessarily as financially sound for the long term,” said FHFA Director Melvin Watt at a U.S. House of Representatives committee hearing this week.
The FHFA expects to finalize the new requirements in the second quarter, after industry feedback. The requirements will become effective six months after they are finalized, and servicers’ compliance will be reviewed every quarter.
http://www.wsj.com/articles/fhfa-unveils-financial-rules-for-nonbank-mortgage-lenders-1422654164
US Home Prices Rise Modestly; Raises Question on Housing Recovery
US Home prices rose at a modest pace in November held back by weaker sales and a limited number of houses for sale, raising serious question marks over the strength of the US housing recovery. According to a report released it was reported that the Standard and Poor’s/ Case-Shiller 20 city home price index rose by 4.3 percent in November. The reading is slightly lower than the 4.5 percent increase seen in October. It is imperative to state that home price gains have decelerated for 12 months straight. Many on the street believe that the slowdown in prices can lead to a higher demands in the coming quarters.
Many new home buyers were priced out last year from many neighbourhoods on the back of the steep rise in home prices. This led to a decline in new home sales by about 3.1 percent which was seen as a huge negative by analysts on the street. Economists believe that new home sales and construction activity would rebound this year as prices are returning to levels consistent to a stable housing market. Many believe that lower mortgage rates, clubbed along with strong hiring and lower down payment requirements from mortgage giants like Fannie Mae and Freddie Mac would spur sales in the coming quarters.
Many believe that the housing market is heading in the right direction. The strong labour market and the rebound in economic growth has meant that many first time home buyers are moving out of rented accommodations and looking at buying a home of their own. Many believe that the fall in crude prices would also add extra spending dollar in the pockets of consumers helping them buy houses in the near term. Many believe the Federal Reserve would keep interest rates lower which would seen as a huge positive for the housing recovery.
http://www.marketsbureau.com/us-home-prices-rise-modestly-raises-question-on-housing-recovery/31878/
Bove Declares Stalemate On Fannie Mae, Freddie Mac Posted By: Michael IdePosted date: January 29, 2015 09:21:13
Bove is right not to expect Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) reform this year, but the end of conservatorship that he supports still isn’t on the table
It wasn’t that long ago that Rafferty Capital Markets VP Richard Bove declared victory in the push to get Fannie Mae and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) recapitalized and re-privatized, citing a massive change in FHFA policy. But after this week’s testimony by FHFA director Mel Watt in front of the House Committee on Financial Resources, Bove seems much less optimistic.
“My sense is that nothing will be done by Congress on the status of the GSEs for a year. The press is not interested in the issues. The public does not care because it sees no change. Stalemate!” he writes.
Housing Trust Fund is the biggest source of disagreement between Watt, House Republicans
Bove homes in on the three biggest disputes between Watt and Republican representatives regarding the GSEs. They opposed his decision to invest in the Housing Trust Fund, and argue that he doesn’t have the authority to restart payments under HERA (though HERA has been interpreted by the courts as giving FHFA an extremely wide berth); they argue that the new 3% down payment programs will lead to higher loan losses (and Bove agrees); finally Watt was pushed to explain how he believes guarantee fees should be set – whether they should ideally balance risk perfectly or be used to turn a profit.
Bove interprets that last bit as a debate about whether high g-fees might let private mortgage backers into the market and shrink the GSEs, but it was clear from context that the g-fee discussion was a different angle of attack on the Housing Trust Fund. If g-fees are too high, then the trust fund is being financed by borrowers, if they’re too low then it’s being financed by taxpayers.
Fannie Mae deadlock is over what comes next
“The Democrats are clearly making decisions that would lead to the continuation of the existence of the GSEs. The Republicans understand this and are fighting the willingness of the FHFA to take actions that that extend the life of the GSEs,” writes Bove.
But Watt has continually asked Congress to enact GSE reform (not just at this week’s hearing) and has refused to offer guidance about what he thinks that reform should look like. He also claimed during the hearing that he is an independent regulator and is not a part of the Obama administration.
Regardless the option that Bove and other Fannie Mae longs most want to hear discussed, the possibility of reviving Fannie Mae and Freddie Mac and ending the conservatorship, wasn’t on the agenda. There does seem to be a serious stalemate on GSE reform, but the question is what will come next, not whether we’ll go back to the old system.
http://www.valuewalk.com/2015/01/bove-declares-stalemate-fannie-mae-freddie-mac/
This tells me that the judge has been made completely aware that this case is high profile. Also the case might gain more media attention thanks to the judge. Shareholders rights have been violated and we are not very docile or quiet or complacent or passive or submissive or.....
Obama's "Tin Ear," Tim's Paper, Snore, Hill Hope, and Fight Back
The State of the Union—Meh!
I am kicking myself for missing last Tuesday’s season premiere of “Justified,” my favorite TV show. It eluded me not because I was glued to President Obama’s annual SOTU message but because I succumbed to watching the Pittsburgh Penguins outplay but lose to the Philadelphia Flyers, a National Hockey League game (3-2 Flyers in OT).
I had no plans to watch annual snoozer to the Hill. Base on new reports, had I tuned into the speech, I might have done “a Ginsberg” and nodded off seven or eight times.
I think the President is a nice guy—as most are/were-- but BHO is overmatched, has little credibility, and no ability to produce against anything he seeks legislatively, unless it’s waiving a white flag at the GOP, which depending on the issue he might do.
Very little he said—all well leaked in advance—seemed important to me.
OK, he’s allowed one last SOTU attempt to polish his legacy but the U. S. exists in an international environment—where antagonist clash daily, often with us and our allies—and its begs more than a few drive-by generalities.
I didn’t expect the President to announce the end of F&F conservatorship, but “help a Brother out, Barack” give Mel Watt something with which to work! (Maybe even a line Mel can use this week, when he appears before a House Banking Subcommittee, which has F&F repayment denier Ed Royce (R-Cal.) on it.)
As I suggested to one notable GSE blogger, who enjoys a major following, I don’t see any hidden Obama plan to leap out and “free” F&F, just more FHFA edge nibbling, which is fine, as long as they don’t chew away substance.
Obama’s (paraphrasing) “desire to work with the Congress on GSE reform” line still pops up and PO's me, although some claim it embraces a delayed stealthy BHO maneuver to move in the opposite direction, cutting F&F conservatorship ties.
Who am I to rain on their parade? (But, I ain’t buying, which makes me a rainmaker here and I suggest you bring your umbrellas.)
Just Who Has the President’s Ear?
I desperately want to know who is advising the President on these matters. Who is it that thinks mortgage consumers and families are better off dancing to the rules of the nation’s largest banks and their allies?
I’ll keep banging that drum until I get an answer that shows somebody in or close to the White House gets it. And that person makes the connection between why the Admin’s financial regulatory agencies keep citing violations and collecting multibillion dollar fines from the people to which Obama says he wants to cede the national mortgage market?
The banks and the GOP are tearing what’s left of Dodd-Frank to pieces on the Hill, right now—before his very eyes--and folks close to the President are saying, “Give ‘em more, maybe they’ll stop?”
Who is the “Neville Chamberlin,” downtown, watching those bank fines pile up and then whispering to President Obama, “Oh, ignore that. They really are good guys and we should help them corner what’s left of the mortgage market they don’t control.”
Cheating or playing fast and lose is endemic to big bank culture, someone needs remind the President of that.
The Sound of One Hand Clapping
Last week, I featured a single subject in my blog. It was an absolutely superb paper written by J. Timothy Howard, Fannie Mae’s former CFO and 23 year employee, and one of the smartest financial services minds I’ve ever encountered.
As the 600 or more who read it on this blog found out, Tim’s paper was well written, cogently argued, and laid out simply his contention that two former Treasury Secretaries committed possible malfeasance (Paulson) and misfeasance (Geithner) in the handling of Fannie and Freddie from conservatorship through the now heavily litigated “Third Amendment.”
He offers substantiations supporting his charges.
The paper was circulated to dozens of people who follow these issues. In addition to this blog, it appeared on Investor’s HUB, the “Restore Fannie Mae” website, TH717’s blog, and at least two other GSE related blog sites.
I have heard many fabulous responses to Howard’s paper, but—as of the night before this blog gets published--I have not seen one professional media report of Howard’s work.
No newspaper, weekly publication, national, network or financial website, covered it, despite having been given copies.
It’s should leap to somebody’s attention when the two companies—and the national system they serve--are and have been screwed by prominent Treasury officials, each of whom has written books trying to lionize themselves—and somebody prominent says the Cabinet officers broke or bent the law.
If Howard is right, Paulson was a partisan thug, who took advantage of 2008’s financial/economic chaos, lied continuously, and botched his attempt to implement a GOP ideological priority—ending F&F--at the expense of the national common good.
Paulson didn’t succeed in dismantling F&F, as six years of operational success and recent fabulous returns show, but he sure threw sand in the gears and %^$#@&$ it up!
While Geithner, an arrogant former NY Federal Reserve banker --misplaced in his Treasury nomination--made his own set of mistakes. After huffing and puffing, threw his weight around, institutionally mugged F&F’s regulator, taking the latter’s statutory authority, and then may have violated the Constitution’s prohibitions against the federal government taking citizen’s property.
Nope, none of that looks like news to me, Rupert. What do you think Mr. Bezos?
Maybe, next week, we can get some thrilling industry poop about non-bank mortgage lenders or, if we are fortunate, Vice President, oops, I mean Secretary Castro will reveal some meaningless FHA statistics?
Banking Oversight Hearings Coming
Both Senate Banking Chairman Dick Shelby (R-Ala) and HBC Jeb Hensarling (R-Tex.) announced plans for vigorous oversight hearings on many/all of the issues which sends Republicans running for Kaopectate, not surprisingly will go after all things Dodd-Frank, the Consumer Financial Protection Bureau (CFPB); Fannie and Freddie, partridges in Fed pear trees, and whatever else they seek to scuttle.
The HBC also voted to give Chairman Hensarling individual subpoena power, so look out Mel Watt. Maybe Jeb will use his new toy to go after some of those F&F documents that Treasury is massively stamping “Secret” to keep them out of the hands of plaintiffs’ lawyers?
Pull up those lifeboats: no joke, someone last week told me Hensarling bought his first house with the aid of an FHA loan, you know the loans provided by one of the government mortgage programs Jeb loves to thrash and hopes will disappear? Why not, he got his, if this report is accurate.
Good News?
As Congress wrestles with itself and the President, the one saving grace for F&F supporters is “Sticks and stones may break their bones nasty threats never can hurt me.”
Despite the rhetoric you hear, I don’t believe F&F’s quick demise is near the top of anyone’s “do it now” lists.
The 114th Congress is not going to move on busting up Fannie and Freddie, roiling markets, and generally behaving like……rogue elephants (get it?).
The congressional R’s need to show they stand for something other than disassembling what they perceive as federal programs or anything standing in the way of their “1%” allies.
That isn’t because they love F&F, but replacing the two involves considering a plethora of GOP ideas all of which suck.
Oh, I mean they have major shortcomings and flaws, not the least of which are the mammoth problems that would injure 20% of the nation’s GNP--even with a lengthy transition period--if the government tried to shift from the current form of popular mortgage borrowing to a new system, new players and new business relations, one which benefits the nation’s Too Big To Fail behemoth financial institutions.
That ugly, indecisive, confusing, and no win Republican-driven political mess, is not something the Grand Old Party wants to lug into next year’s congressional or presidential elections.
Congress both is growling and yawning. But, there are billions and billions of dollars tied up in the court cases wending their way with no known schedule or urgency.
But, those judicial decisions—when they come and their appeals run out—easily could decide the shape and ownership for the nation’s mortgage finance system and, even, continued existence of the 30 year fixed rate mortgage.
What the Pro-F&F Community Faces
And What You Can Do About That
http://financialservices.house.gov/blog/?postid=343018
For a brief moment, forget that is Jeb Hensarling’s committee page. These historical fabrications could emanate from any number of public officials, Senators or Member of Congress. It just happens to be part of the Chairman of the House Banking Committee’s website, which I assume it wouldn’t be there if he didn’t agree with most/all of it.
The stuff is farcical to most people familiar with what really happened to F&F leading up to an including conservatorship. But, for a majority of folks “inside the Beltway” or even outside, this is the objectionable robe F&F wear, an erroneous meme shared by dozens of policy makers in both parties.
Those of you looking to “bell the cat” in communications with your congressional representatives should use Hensarling endorsed statements (on this webpage) as your target and evidence of the bizarre thinking that’s at work in the congressional environment, in this case by a very powerful Chairman with committee jurisdiction over the entities he distorts.
Let every member of Hensarling’s Committee, D&R—and your own Senator or Congress Member--know you are not buying the twisted Hensarling spin on events.
Fight back!
If Hensarling changes his page, you’ve scored a tiny victory. If he gets more GSE bellicose, you have additional ammunition to use against those ideas.
Apropos of Speaking to the Hill
My thanks to David Sims (hope you are feeling better, DS!) for sharing with me items I thought people might enjoy.
The first are links to messages shared by members of Investors Unite, who travelled to Washington to meet with their congressional representatives and discuss GSE issues and the court cases.
https://groups.google.com/forum/m/?fromgroups#!topic/freddienfannie/dEU9T29t5l4
https://groups.google.com/forum/m/?fromgroups#!topic/freddienfannie/6StCTNo_MJE
David also provided a link to the briefing IU and its primary organizer, Tim Pagliara, provided media and congressional staff before some of the visits.
http://youtu.be/keAT2w94jVE
http://malonigse.blogspot.com/
Timothy Mayopoulos Joins SAIC's Board of Directors
Tickers: SAIC
MCLEAN, Va. , Jan. 26, 2015 /PRNewswire/ -- Science Applications International Corporation (NYSE: SAIC) today announced that Timothy J. Mayopoulos has been appointed as a member of SAIC's board of directors, effective Feb. 19 . Mayopoulos will serve on the Audit Committee, and the Nominating and Corporate Governance Committee.
"We are pleased to welcome Tim Mayopoulos to SAIC's board of directors," said SAIC Chairman Edward J. Sanderson, Jr. "Tim has deep experience in financial services and an outstanding track record working in a highly regulated environment. Tim's strong business and leadership expertise along with his legal background will increase the depth of capabilities to our dynamic board as we continue to execute SAIC's business strategy."
Top Company Interviews
Credit Suisse Group MGM Mirage Verizon Communications Inc. Snap-on Inc. Hitachi Ltd. Pfizer Inc. Apple Inc. Limelight Networks, Inc. AllianceBernstein Holding L.P. International Business Machine
Mayopoulos is the president and CEO of the Federal National Mortgage Association (FNMA), or Fannie Mae, and a member of its board of directors. He joined Fannie Mae in April 2009 as executive vice president, general counsel, and corporate secretary, and in 2010 he was appointed chief administrative officer before becoming president and CEO in June 2012 . Prior to joining Fannie Mae, Mayopoulos held senior leadership positions at several financial institutions, including Bank of America, Credit Suisse First Boston, and Deutsche Bank. He is a graduate of Cornell University and the New York University School of Law .
With the addition of Mayopoulos, SAIC's board of directors will increase to nine members.
About SAIC
SAIC is a leading technology integrator providing full life-cycle services and solutions in the technical, engineering, and enterprise information technology markets. SAIC's deep domain knowledge and customer relationships enable the delivery of systems engineering and integration offerings for large, complex government and commercial projects. SAIC's approximately 13,000 employees serve customers in the U.S. federal government, state/local, and global commercial markets, specializing in providing a broad range of higher-end, differentiated technical capabilities. Headquartered in McLean, Virginia , SAIC has annual revenues of about $4 billion. For more information, visit http://www.saic.com/.
Certain statements in this announcement constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties and a number of factors could cause our actual results, performance, achievements, or industry results to be very different from the results, performance, or achievements expressed or implied by such forward-looking statements. Some of these factors include, but are not limited to, the risk factors set forth in SAIC's Annual Report, Form 10-K and other such filings that SAIC makes with the SEC from time to time. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof.
http://www.twst.com/update/95691-saic-science-applications-international-corporation-timothy-mayopoulos-joins-saics-board-of-directors
Fannie Mae And Freddie Mac May Help End Homelessness In America
The Huffington Post | By Robbie Couch
Posted: 01/26/2015 9:31 am EST Updated: 9 minutes ago
Two organizations synonymous with the 2008 financial crisis could play vital roles in helping America's most vulnerable residents get off the streets.
ThinkProgress reported that Fannie Mae and Freddie Mac -- two government-backed mortgage companies whose buying and guaranteeing of risky mortgages contributed to the Great Recession -- are now able to contribute to the National Housing Trust Fund.
The fund was created in 2008 to support affordable housing initiatives nationwide but had laid dormant until now, as the Federal Housing Finance Agency (FHFA) announced in December that "both [Fannie Mae and Freddie Mac] are financially fit" to contribute.
The two organizations were barred from setting aside money for the fund previously due to the financial crisis.
While the fund falls short of solving America's shortage of affordable housing, it's a welcome step advocates across the country have been waiting for, TakePart reported. The fund is expected to raise $250 million to $350 million in 2015, and will be distributed to states next year.
The funds will mostly be used to alleviate extremely low-income renters.
In the U.S., there were 578,424 people experiencing homelessness on any given night in January 2014, according to the National Alliance to End Homelessness. And while that figure is large, it doesn't include the millions of Americans who are "housing insecure," as Terri Ludwig, Huffington Post blogger and CEO of Enterprise Community Partners, wrote in December.
And the number of those on the brink of homelessness may be rising.
As CBS News reported, housing is unaffordable when mortgages or rent comprise 30 percent or more of a family's income, and 9 million more households fell into that category in 2012 than did in 2002, a report from The Joint Center for Housing Studies at Harvard University found. What's more, the poorer the family, the more likely it is to live in circumstances where housing costs demand a larger sum of monthly income: 82 percent of those earning less than $15,000 annually paid more than 30 percent in housing costs in 2012.
But the National Housing Trust Fund is aiming to lessen the burden.
Fannie Mae and Freddie Mac's ability to support the fund will be like “turning on the spigot,” Rachael Myers, executive director of the Washington Low Income Housing Alliance, told ThinkProgress. And while it's a far cry from an end-all, be-all answer to homelessness, the fund marks a shift in the federal government's prioritizing of affordable housing.
“It does feel like the first step in moving the debate and moving the national government back into the business of creating affordable homes for extremely low-income people," Myers told ThinkProgress.
http://www.huffingtonpost.com/2015/01/26/fannie-mae-homelessness_n_6534456.html
Reality Check: Are Obama's State of the Union proposals realistic?
By Kevin Liptak, CNN White House producer
Updated 7:03 PM ET, Thu January 15, 2015
Washington (CNN)In the span of a week there were three new proposals from President Barack Obama as the White House unveiled ambitious plans to fight cyber crime and expand broadband access, help kids go to college and give workers paid family leave.
Add those new proposals to an existing plan to give more help to first-time homebuyers and there appears to be a full year's agenda on tap as the President prepares to give his annual State of the Union address before Congress on Tuesday.
The rapid-fire "spoilers" coming out of the White House ahead of Obama's State of the Union address may seem like good ideas -- but many of them may remain just that.
The Republican majority on Capitol Hill hasn't sounded receptive to many of the new White House proposals, though that's not a surprise to anyone who's watched House Republicans resist most of Obama's agenda for the past four years.
On some areas there appears to be early agreement. Both sides say they want a new cyber security law. But nearly everywhere else, the most aggressive White House plans appear likely to be blocked.
Here's a reality check on the chances for success of Obama's latest proposals:
Community college and paid leave
Of all Obama's pre-State of the Union schemes, a new proposal offering free community college for two years appears the least likely to gain much traction in Congress -- and the least likely to become a reality. The two Republican senators who accompanied Obama to Tennessee to announce the plan both rejected it out of hand.
That was the general reaction from most Republican lawmakers, who balked at the plan's $60 billion price tag.
Obama's aides aren't surprised by the GOP reaction; after all, they've spent the bulk of the Obama presidency dealing with a Republican-controlled House. Instead, they say the proposal gets a conversation started about the importance of community colleges in educating Americans.
That's similar to the White House's approach to raising the minimum wage: while action won't happen in Congress to increase the federal wage, individual states and private businesses are increasing their workers' pay.
That mantra will inform the administration's push for paid leave - while Obama called this week on lawmakers to pass $2 billion in legislation requiring employers to offer paid sick days, such a measure has no chance of being approved by a GOP-controlled Congress.
"It's not necessarily all about bills and funding," said Sen. Angus King, the Maine Independent who serves on the Senate Budget Committee. "Sometimes it's about the bully pulpit and raising the profile of an issue."
Related: Obama pushes for paid sick days and paid family leave
Cyber security and broadband
The other major push this week -- made at the Federal Trade Commission and at the law enforcement agency responsible for investigating hacks -- was toward bolstering the country's cyber protections. It's a goal Republicans and Obama both say they aiming for.
When GOP leaders met Obama at the White House Tuesday it was one of the areas where both sides said they agreed, though formal legislation -- where hang-ups usually arise -- hasn't yet been introduced.
There's disagreement on which U.S. agency should gather information about cyber threats, and just how much information about Americans should be shared with the government. But lawmakers on both sides say they think something can pass.
"We need cyber-security legislation and need it passed now," said Sen. Richard Burr, the Republican chairman of the Senate Intelligence Committee. "When you've got a committed White House, I can assure you it's going to be matched with a committed Senate."
The issue is ripe for action by Congress and the White House - last month's hack at Sony Pictures was only the latest example of a major American corporation being targeted by cyber criminals. Consumers are skeptical their banking information is safe after breaches at Target and Home Depot. And government networks appeared vulnerable after a hack of U.S. Central Command's Twitter account.
On the White House's other digital pitch - expanding high-speed broadband internet - Obama will likely have less luck convincing Republicans, some of whom say it's another move to overregulate private industry. Others are worried about the costs.
In the end, Obama doesn't need approval from the U.S. Congress to enact his broadband plan - it's individual states that regulate whether or not community-based internet providers are allowed to compete with giants like Comcast and Time Warner.
Obama can only do so much to expand access in states. While the White House has called on the Federal Communications Commission to block state laws preventing competition in cable markets, the body is independent and will come to its own decision.
Housing
Republicans may be fuming about Obama's plan to lower fees on government-backed loans, but there's not much Congress can do to prevent the president from putting his new rate structure in place. In theory they could withhold funding for the agency in response to Obama's move - though none have threatened that yet.
The White House argues the new plan would save low- and middle-income homeowners nearly $1,000 per year, but the GOP claims the plan cuts against the goal of getting the federal government out of the mortgage business altogether.
Obama and Republicans at least partially agree on that front, and the president reiterated his call on lawmakers to wind down Fannie Mae and Freddie Mac last week. But Democrats on Capitol Hill have been resistant to sign on, saying the government mortgage giants provide a way into the housing market for millions of Americans.
With Republicans in the majority on Capitol Hill, a wind-down measure could come for a vote in the Senate - something that failed to happen in the last Congress.
http://www.cnn.com/2015/01/15/politics/obama-sotu-proposals/
Corker Discusses Key Issues Facing Congress In The Year Ahead (link includes link to video)
Thursday, January 15, 2015
Appearing on Bloomberg Television with Peter Cook from the Senate-House Republican retreat o on Thursday, Senator Bob Corker discussed some of the major issues facing Congress in the year ahead including Iran nuclear discussions, an authorization for the use of military force (AUMF) against ISIS, Department of Homeland Security (DHS) funding in light of President Obama’s recent executive action on immigration, the need for Congress to address housing finance reform, and oversight of the Federal Reserve.
Excerpts from Senator Corker’s interview with Peter Cook follow.
On the Senate-House Republican retreat: “We have a lot of similarities that we need to synchronize. It has been a good session. I’m glad to be here. I think it has been very helpful for people to understand how each body [of Congress] plans to move things along.”
On the prospects of Republican legislative priorities in the face of veto threats from President Obama: “We will follow our own course. Certainly, we are going to deal with things like energy. We have to deal with a budget. We certainly will deal with the Iran issue very fully.”
On Congress weighing in on Iran nuclear discussions: “I think it’s only right that Congress has the ability to weigh in. Congress got us to the table. Certainly the administration was involved heavily in that too, but Congress played a major role, and we need to play a major role in ensuring that whatever final agreement that is negotiated [with Iran] is one that will stand the test of time.”
On an authorization for the use of military force against ISIS: “The president has given the nod and plans to work with us soon on an AUMF, an authorization for the use of military force. We hope that is actually going to occur.”
On the prospects of the Senate passing a “clean” Department of Homeland Security funding bill in light of President Obama’s recent executive action on immigration: “I would not think that would be the case. I think everyone [in Congress] is cognizant of the fact that Americans’ security is one of the most important functions, and homeland security is certainly central to that, and we all want to maintain that. At the same time, my sense is that the Senate will speak very strongly to some of the issues that you are alluding to.”
On the need for Congress to address housing finance reform: “The biggest issue though, Peter, to me is when Dodd-Frank was being passed, every single Republican senator, I believe, went to the floor and complained about the fact that it didn’t include changes to Fannie [Mae] and Freddie [Mac], winding them down, keeping them off as a taxpayer liability. It is the biggest issue that we need to deal with. From my standpoint, it would be total malpractice for us not to figure out a way to get this tremendous taxpayer liability dealt with and have the private sector playing the kind of role it should be playing right now in housing finance.”
On oversight of the Federal Reserve: “There is not a lot of oversight into how the Fed is carrying out its regulations. I think you will see a lot of meetings in that regard, trying to understand how [Federal Reserve Governor Daniel] Tarullo and others are going about their business [and] the effects that it is having downstream. One of the most important roles we play, and yet haven’t played it much, is oversight. I think that’s something that is going to be very, very robust over the next couple of years.”
http://www.chattanoogan.com/2015/1/15/292106/Corker-Discusses-Key-Issues-Facing.aspx
Fannie, Freddie must study 'alternate' credit scoring -regulator
Thu, Jan 15 02:37 AM IST
By Lindsay Dunsmuir
WASHINGTON, Jan 14 (Reuters) - Fannie Mae and Freddie Mac's regulator hinted on Wednesday that credit standards could be eased when it laid out the 2015 goals for U.S. mortgage companies.
The Federal Housing Finance Agency directed the two government-controlled entities to explore "alternate" credit score models and the credit history of the loans they support.
The U.S. housing market's recovery has been held back by the difficulty many Americans face in obtaining credit. The FHFA's Director Mel Watt has said expanding access to credit is an important goal, but one that needs to be balanced against the risk of loan losses.
In the goals laid out for the two mortgage finance firms, the FHFA also said they should increase the purchase of loans backed by manufactured housing, as well as ramp up counseling services for buyers trying to obtain a mortgage or in early delinquency.
It also called on Fannie Mae and Freddie Mac to provide clarity on what is expected from mortgage loan servicers and to "enhance eligibility standards." Servicers have faced increased compliance standards as the United States has sought to learn from the mistakes that led to the financial crisis.
Under Watt's leadership, the FHFA spent much of last year expanding credit availability, including compelling Fannie Mae and Freddie Mac to launch programs that allow more borrowers to make down payments as low as 3 percent of a property's value.
Last December, it also directed them to begin paying into an affordable housing fund.
The goals spelled out for this year were largely in keeping with previously announced priorities for Fannie Mae and Freddie Mac. These include finalizing a new framework to govern when lenders are held liable for sour loans, reducing severely delinquent mortgages and building a common securitization platform.
Fannie Mae and Freddie Mac have been under U.S. government control since 2008 when their businesses collapsed during the financial crisis. They buy mortgages made by banks and repackage them as securities, which they offer with a taxpayer guarantee. (Reporting by Lindsay Dunsmuir. Editing by Andre Grenon)
http://in.mobile.reuters.com/article/idINL1N0UT22K20150114?irpc=932
Bloomberg Businessweek Fannie Mae and Freddie Mac’s (FMCC:US) main priorities this year include expanding credit to underserved borrowers and trying to help homeowners who are delinquent on their mortgages, the companies’ federal overseer said.
Melvin L. Watt, the director of the Federal Housing Finance Agency, said he’s ordered the companies to try to increase the use of housing counseling, which helps entry-level borrowers get into the market, and to review new ways of evaluating borrowers’ creditworthiness. Another goal will be helping buyers get loans for more affordable housing such as manufactured homes, he said.
The goals will help FHFA and the two companies “build a strong, vibrant national housing finance market, which will create new homeownership and rental opportunities for existing and potential borrowers,” Watt said in an e-mailed statement today. The priorities were included an annual list of targets Fannie (FNMA:US) Mae and Freddie Mac are required to meet under the terms of their federal conservatorship.
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Watt, who took over at FHFA a year ago, has been reversing previous policies that emphasized shrinking Fannie Mae and Freddie Mac. The two companies, which were seized by regulators in 2008, buy more than half of the new mortgages in the U.S. and package them into securities.
In an attempt to boost funding for affordable rental housing, the two companies will each be limited to buying $30 billion in apartment building loans unless the loans are for affordable housing projects or manufactured housing rental communities.
Fannie Mae and Freddie Mac, which currently each issue their own bonds, will continue to work on a common security. They will also be required to increase transactions in which they transfer the risk on their bonds to private investors.
http://www.businessweek.com/news/2015-01-14/fannie-and-freddie-directed-to-aid-underserved-borrowers-in-2015