Fannie Mae-No Politics (FNMA)

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Short Takes: The Otting Era Commences
Waiting on the Senate (It Didn’t Work for Michael Bright)
11 Days In and All Shook Up
HFSC Chair Worries about Furloughed Workers and Delinquencies
Keep an Eye on Jan. 15
The Milken Institute Weighs in on ‘Administrative’ Reform of the GSEs

By Paul Muolo .. January 11, 2019 ... [e-mail], [e-mail]



We understand that when Joseph Otting showed up for work as director at the Federal Housing Finance Agency on Mondayhe didn’t bring donuts, which is what Mick Mulvaney did when he started at the Consumer Financial Protection Bureau in the fall of 2017. But Otting did send out an email to FHFA staffers, introducing himself. No word yet on what his first move might be. Industry stakeholders continue to believe that no new pilot programs will be approved for Fannie Mae and Freddie Mac under his watch…

Otting, of course, is wearing two hats: the FHFA job and Comptroller of the Currency. The White House pick for permanent director, Mark Calabria, cannot take the chair until the Senate approves him. With Democrats and Republicans seemingly far apart on almost every issue these days, will he ever get the job? It’s not an unrealistic question…

We’re just 11 days into the new year and already things are getting interesting in the mortgage industry. Ginnie Mae interim President Michael Bright unexpectedly threw in the towel, IBM announced it is quitting the business, and the government shutdown – now in its third week – is about to wreak havoc on servicers in the form of late payments. And interest rates are falling once again…

Roughly 800,000 federal workers are not drawing a paycheck. Legislation was introduced in the Senate this week designed to protect government employees from creditors (mortgage companies included) and landlords during the partial government shutdown in the event they cannot pay their bills. Introduced in by Sen. Brian Schatz, D-HI, the Federal Employee Civil Relief Act (S-72) is modeled after the Servicemembers Relief Act…

Rep. Maxine Waters, D-CA, chairman of the House Financial Services Committee late Thursday issued a statement noting that 95 percent of Department of Housing and Urban Development employees have been furloughed. She added: “Millions of families that rely on HUD’s rental assistance programs are dangerously close to losing their homes due to projected lapses in funding. What’s more, it has been recently reported that HUD, under Secretary [Ben] Carson’s leadership, has failed to follow its own contingency plan, allowing 1,150 project-based rental assistance contracts to expire with hundreds more hanging in the balance if this shutdown isn’t resolved…”

Every mortgage I’ve ever taken out had a due date of the first of the month. However, the servicer wouldn’t assess late fees until the 15th of the month. This extra cushion should help mortgagors. As for renters…

Wells Fargo is preparing to issue its second post-crisis jumbo mortgage-backed security. The deal is sized at $711.7 million, according to a presale report from Moody’s Investors Service, compared with the $441.3 million MBS Wells issued in October. Reporting by Brandon Ivey / [e-mail].

IN CASE YOU MISSED IT: The Milken Institute this week issued its “Blueprint for Administrative Reform of the Housing Finance System.” The authors include former Ginnie Mae President Ted Tozer and investment banking veteran Eric Kaplan. The title of the report says it all: “Administrative Reform,” which means there is no faith in Congress enacting Fannie/Freddie reform legislation on its own. Among the recommendations made by the authors: The FHFA should “follow the practices of other financial regulators by completing the GSE capital rule through an iterative process involving more than a single round of public input. At a minimum, re-proposing the rule is necessary to provide the public with more insight into the FHFA’s analytical constructs, assumptions, and data that went into the initial formulation of capital and leverage requirements. Getting this rule right is critical to creating a housing finance system driven by private capital that can survive future downturns and maintain liquidity for credit-worthy borrowers throughout the economic cycle.”

PEOPLE: Wells Fargo, the nation’s largest home lender and servicer, named Saul Van Beurden “head” of technology. No specific title was mentioned in the bank’s press statement. He will officially become a “head” in April. He joins the megabank from another megabank, JPMorgan Chase.