We’re Hearing:FHFA Can End the GSE Conservatorships
IMFnews : Friday, May 2, 2014
In case you’re wondering, the Federal Housing Finance Agency does indeed have the power to end the conservatorships of Fannie Mae and Freddie Mac. According to information published by the agency in 2008, the FHFA has the power to issue “an order terminating the conservatorship.” FHFA notes that while in conservatorship the powers of stockholders are suspended “until the conservatorship is terminated.” This declaration of powers was published by the agency on September 7, 2008, on its website. Here’s the link: http://www.fhfa.gov/Media/PublicAffairs/Pages/Fact-Sheet-Questions-and-Answers-on-Conservatorship.aspx. We assume that new FHFA director Mel Watt is well aware of this…
Human beings, especially mortgage bankers, are creatures that know how to adapt. Late this week, we heard an interesting story about how some lenders are using the non-owner-occupied exemption of the qualified mortgage rule to help self-employed borrowers. One loan officer familiar with the loophole said some self-employed borrowers – a truly underserved market – are buying homes, listing themselves as non-owner-occupants. They then list the home for rent and move in as the occupant. He suggested that this is a new incarnation of the “liar loan,” a term that gained notoriety during the early years of the housing bust. This LO did not want to go on the record and who can blame him, given the fact that when it comes to examinations, the Consumer Financial Protection Bureau is asking some executives to testify under oath…
Did someone in the mortgage industry actually ask one of the GSEs recently to increase the 25 basis point servicing fee that it pays to residential servicers? We’re told by three different sources that the story is true. Look for additional coverage next week…
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