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.

GSE Loan Limits Unchanged for 2010

This story appeared in Bank Digest.

The Federal Housing Finance Agency has announced that the maximum conforming loan limits for mortgages originated in 2010 will remain unchanged from the maximum levels for 2009. The maximum loan limit for one-unit properties in most of the contiguous United States has been left unchanged at $417,000. Loan limits for two-, three-, and four-unit properties in 2010 also will remain at 2009 levels: $533,850, $645,300, and $801,950 respectively for homes in the contiguous U.S. Loan limits are higher in certain areas where median home prices are high and in certain statutorily designated locations, including Alaska, Hawaii, Guam and the U.S. Virgin Islands.

Latest Property Managers Report Issued

This story appeared in Bank Digest.

The Federal Housing Finance Agency has issued its 11th Federal Property Manager’s Report to Congress. The report is required by Section 110 of the Emergency Economic Stabilization Act of 2008. The FHFA noted that preventing avoidable foreclosures through loan modifications and mortgage refinances is a top priority at the agency.

http://www.fhfa.gov/webfiles/15172/Fed.%20Prop%20Mgr%20Report.pdf

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.

Mortgage Interest Rates Reported

This story appeared in Bank Digest.

The Federal Housing Finance Agency has reported that the average interest rate on conventional 30-year, fixed-rate mortgage loans decreased 7 basis points to 5.23 percent in September. The average interest rate on 15-year, fixed-rate loans increased 15 basis points to 4.77 percent in September. These rates pertain to mortgages closed during the September 24-30 period. Typically, the interest rate is determined 30 to 45 days before the loan is closed. Thus, according to the agency, the reported rates depict market conditions prevailing in mid to late August. Recorded information on this index is available by calling (202) 408-2940. The October index value will be announced on Nov. 24, 2009.

FHFA Seeks to Repeal the Statutory Caps on Compensation

This story appeared in Bank Digest.

The FHFA has proposed a rule that would repeal the statutory caps on the annual compensation that can be paid to Federal Home Loan Bank (Bank) directors. The proposed rule would allow each FHLBank to pay its directors reasonable compensation and expenses, subject to the authority of the FHFA Director to object to, and to prohibit prospectively, compensation and/or expenses that the Director determines are not reasonable.

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.

FDIC Auctions Off Stake in Bank's Assets

This story appeared in Bank Digest.

The Federal Deposit Insurance Corp. has announced an agreement to sell a 40 percent stake in a portfolio of Corus Bank assets for $554.4 million to a private-equity consortium led by Starwood Capital Group. The portfolio of loans and assets has an unpaid principal balance of about $4.5 billion. Corus Bank, which was closed by regulators on Sept. 11, 2009, had a large portfolio of distressed construction loans, many of them tied to condominiums. The rest of the assets were auctioned off separately and attracted eight bidders, according to the FDIC.