Financial Crisis News Center

Oversight’s Ranking Member Calls for FHFA-IG Clarification

This story appeared in Bank Digest.

Oversight and Government Reform Committee Ranking Member Darrell Issa, R-Calif., has raised questions about whether the Federal Housing Finance Agency has an effective Inspector General. Press reports have indicated that the agency's chief has questioned the authority of the existing IG. Issa called for the former IG of the Federal Housing Finance Board to be empowered to continue to act until a permanent appointment is made, and he questioned whether Fannie Mae and Freddie Mac should receive any additional government support until then.

Low-Income Housing Tax Credit May Be Transferred

This story appeared in Bank Digest.

Shortly after the establishment of the conservatorships for Fannie Mae and Freddie Mac, Federal Housing Finance Agency issued a statement emphasizing the importance of all aspects of the Enterprises’ multifamily businesses to a healthy secondary market and housing affordability—including the low-income housing tax credit (LIHTC) program. However, the FHFA has informed Fannie Mae that a possible transfer of a portion of its LIHTC investments to unrelated third-party investors is consistent with FHFA’s ongoing efforts to conserve Enterprise assets and with the Enterprise’s multifamily housing mission.

FHFA Report Shows Refinance Volumes Dropped in September; Mortgage Rates Still Higher than in Spring

This story appeared in Bank Digest.

A Federal Housing Finance Agency refinance report shows that Fannie Mae and Freddie Mac refinanced more than 3.5 million mortgage loans in 2009 through September of this year. In the month of September, 262,000 mortgages were refinanced—a drop from the volume of the preceding month—with mortgage rates still higher than levels observed in the spring. The report shows that refinance volume decreased from August to September as the average interest rate on a 30-year mortgage in July and August—5.22 and 5.19 percent respectively as reported by Freddie Mac—were at a level higher than the rates observed earlier in 2009.

http://www.fhfa.gov/webfiles/15153/Sept_Refinance_Final_report_and_release_11_2_09.pdf

FHFA Sends Two Reports to Congress on Mortgage Market

This story appeared in Bank Digest.

Acting Federal Housing Finance Agency Director Edward J. DeMarco has sent two reports to Congress pursuant to requirements of the Housing and Economic Recovery Act, passed in July 2008. The reports discuss a number of topics, including mortgage risk, Fannie Mae’s and Freddie Mac’s housing goal performance, and key developments in the housing market. The first report, titled “Default Risk Evaluation in the Single-Family Mortgage Market,” evaluates recent research related to mortgage risk. The report discusses recent literature on underwriting standards, collateral valuation, loan securitization, mortgage modifications, and the effects of foreclosures on home values. The second report, the Annual Housing Report, was  submitted pursuant to Section 1125 of the Housing and Economic Recovery Act of 2008.

HAMP Servicer Agreements Released

This story appeared in Bank Digest.

The Treasury Department has posted the following servicer participation agreements for the Home Affordable Modification Program (HAMP). These agreements are the first step servicers need to take to participate in HAMP for loans that are not owned, securitized or guaranteed by Fannie Mae or Freddie Mac.

Administration Urges Congress to Approve Housing Measures

This story appeared in Bank Digest.

Treasury Secretary Tim Geithner and Housing and Urban Development Secretary Shaun Donovan have called on Congress to approve three measures to improve housing and the housing market for Americans: extension of the First Time Homebuyers Tax Credit for a limited period; extension of higher loan limits for home mortgages; and secure funding for the Housing Trust Fund. The administration supports a limited extension of the First Time Homebuyers Tax Credit, which currently is set to expire on Dec. 1, 2009; a one-year extension of the current loan limits for the Federal Housing Administration, Fannie Mae, and Freddie Mac; and $1 billion in funding for the Housing Trust Fund. House Financial Services Committee Chairman Barney Frank, D-Mass., has supported the White House call to action, calling the Trust Fund socially and economically necessary and saying that higher GSE loan limits are needed to address market differences.

GSE Loan Modifications Increase More Than 40 Percent

This story appeared in Bank Digest.

According the Federal Housing Finance Agency’s latest Foreclosure Prevention Report, Fannie Mae and Freddie Mac's trial mortgage loan modifications under the Administration's Home Affordable Modification Program (HAMP) were up more than 40 percent in September 2009 from the previous month. Completed loan modifications are also expected to increase when borrowers successfully complete the three-month trial period and provide required documentation.

Federal Property Manager's Report Submitted

This story appeared in Bank Digest.

FHFA Acting Director Edward J. DeMarco submitted to Congress FHFA's tenth Federal Property Manager's report detailing actions taken to prevent unnecessary foreclosures. The FHFA is a designated Federal Property Manager in its role as conservator for Fannie Mae and Freddie Mac. DeMarco noted that preventing avoidable foreclosures through loan modifications and mortgage refinances is a top priority at FHFA.

FHFA Agency Announces 2010 Budget

This story appeared in Bank Digest.

Federal Housing Finance Agency Acting Director Edward J. DeMarco has announced a Fiscal Year (FY) 2010 budget of $139.3 million for the agency, an increase of 15 percent from the FHFA FY 2009 budget of $120.8 million. FHFA will also issue a special assessment of $10.4 million on Fannie Mae and Freddie Mac for the costs of certain conservatorship activities. The FY 2010 budget ensures the FHFA has the resources necessary to promote the safety and soundness of Fannie Mae and Freddie Mac and the 12 Federal Home Loan Banks.

http://www.fhfa.gov/webfiles/15061/FHFA2010BudgetF100209.pdf

SEC Refuses to Have Official Testify in Securities Litigation

This story appeared in Bank Digest.

The lead plaintiffs in securities litigation against Fannie Mae had their petition to review a Securities and Exchange commission order declining to have the agency’s former chief accountant deposed denied by the agency. The SEC was unpersuaded by lead plaintiffs’ arguments and concluded that the deposition testimony they seek to obtain from the former official as a fact witness would constitute, in large part, expert opinion testimony and, to any extent not so, would be largely protected by the SEC’s deliberative process privilege. Under the circumstances  presented, authorization of the testimony would unduly burden the SEC.

Rel. No. 34-60772 at http://www.sec.gov/litigation/opinions/2009/34-60772.pdf