Free Republic

The federal government is about to back mortgages of nearly $1 million for the first time. The maximum size of home-mortgage loans eligible for backing by Fannie Mae and Freddie Mac are expected to jump sharply in 2022, a reflection of the rapid appreciation in home prices nationally over the past year. The increase may make it easier and cheaper for some borrowers to buy a home, particularly in more expensive areas of the country, but the higher limits are also likely to elevate debate about how big of a mortgage is too big to be backed by the government....

A top U.S. regulator is considering taking steps to ease strains on mortgage companies facing a cash crunch as millions of Americans struggling with fallout from the coronavirus suspend their monthly payments, according to people familiar with the matter. The Federal Housing Finance Agency is weighing whether to allow Fannie Mae and Freddie Mac, the government-controlled mortgage-finance giants, to buy home loans that recently entered forbearance, meaning borrowers have stopped making payments, the people said. That would help nonbank mortgage companies that lend to home buyers and then quickly sell the loans to Fannie and Freddie. The strategy was upended...

The distinguished judges of the U.S. Court of Appeals for the Fifth Circuit have considered how much Fannie Mae and Freddie Mac have paid the Treasury Department to compensate the taxpayers for the giant bailout which kept Fannie and Freddie in existence and business. The court observed in its September 6 judgment: “The net worth sweep transferred a fortune from Fannie and Freddie to Treasury.” Specifically, “Treasury had disbursed $187 billion and recouped $250 billion.” The “net worth sweep” is the dividend on the senior preferred stock in Fannie and Freddie acquired by the Treasury in the bailout. Originally set...

The gatekeepers of the American mortgage market are increasingly backing loans to borrowers who have heavy debt loads, highlighting questions about mortgage risk as policy makers debate ways to change the system. Almost 30% of loans that mortgage giants Fannie Mae and Freddie Mac packaged into bonds last year went to home buyers whose total debt payments amounted to more than 43% of their incomes, according to an analysis by industry research group Inside Mortgage Finance. The share has nearly doubled since 2015. Data on other government mortgage programs also show an increase. The backing of these loans opens up...

This is the video of an interview after the close on CNBC by Kelly Evans of Dick Bove and Josh Rosner on the NYT story by Gretchen Morgenson that showed the Obama Administration changed the agreement between the US Government and Fannie Mae and Freddie Mac by fiat ruling. Play the video at the link. If you think this isn't worth it, just note that the video has been buried off their front page . . . since it slaps the Obama people right in the face and heaven forbid that happens on an NBC property.

"An examination of the Treasury Department’s balance sheet for Fiscal Year 2013 documented how the Obama administration diverted billions of dollars into Obamacare that Treasury confiscated from Freddie and Fannie earnings."

When Washington took over the beleaguered mortgage giants Fannie Mae and Freddie Mac during the collapse of the housing market and the financial crisis of 2008, it was with the implicit promise that they would be returned to shareholders after being nursed back to health. But now, with the unsealing of documents this week that were produced as part of a lawsuit filed against the government, new evidence is coming to light on how intimately the White House was involved in the Treasury’s decision in August 2012 to keep all the companies’ profits for the government. That move effectively maintained...

The "most transparent administration in history" has spent years trying to hide embarrassing financial secrets from the public ___ It's not quite the Panama papers, but one hell of a big pile of carefully guarded secrets may soon be made public. For years now, the federal government has been quietly fighting to keep a lid on an 11,000-document cache of government communications relating to financial policy. The sheer breadth of the effort to keep this material secret may not have a precedent in modern presidential times. "It's the mother of all privilege logs," explains one lawyer connected with the case....

Subprime 2.0: The White House is rolling out a new low-income mortgage program that for the first time lets lenders qualify borrowers by counting income from nonborrowers living in the household. What could go wrong? The HomeReady program is offered through Fannie Mae, which is now controlled by Obama's old Congressional Black Caucus pal Mel Watt. It replaces the bankrupted mortgage giant's notorious old subprime program, MyCommunityMortgage. In case renaming the subprime product fails to fool anybody, the affordable-housing geniuses in the administration have re-termed "subprime," a dirty word since the mortgage bust, "alternative."

It wasn't greed that caused the mortgage mess. In large part, the mess was the product of government policies designed to increase home ownership among the poor and ethnic minorities. Today Peter Wallison points out how Fannie Mae, Freddie Mac and the FHA created a demand for bad mortgages that encouraged mortgage brokers to generate millions of them. From the Wall Street Journal: Mortgage brokers had to be able to sell their mortgages to someone. They could only produce what those above them in the distribution chain wanted to buy. In other words, they could only respond to demand, not...

In 2008, the nation entered into a financial crisis widely believed to have been caused by excesses in the residential mortgage industry. By 2010, the nation thought it had put in place a series of measures that not only would resolve the crisis but would insure that it never happened again. Yet, here we are in 2015 looking at another potential mortgage crisis. Only this time it is different. In 2008, funds flowed in waves into the mortgage industry. In 2015, it appears the funds are drying up. The solutions to the problem in 2010 and thereafter included: Suing and...

WASHINGTON (AP) — Some Americans will soon be able to buy a home with a down payment as low as 3 percent, compared with the current minimum of 5 percent, the mortgage giants Fannie Mae and Freddie Mac say. The new lending guidelines announced by the companies Monday are designed to help more low-income and first-time buyers afford homes. Millions of Americans lost their savings or no longer had the income needed to set aside money for a home in the aftermath of the 2008 financial crisis and the Great Recession. That has held down the sales of houses and...

Martha Coakley, the attorney general of Massachusetts, filed suit on Monday against Fannie Mae and Freddie Mac in an effort to force the federally owned mortgage finance giants to comply with a state antiforeclosure law passed in 2012. The law seeks to ease the way for so-called buyback programs, which are aimed at reducing the debt of the homeowner while saving the lender the cost of foreclosure and eviction. Fannie and Freddie have refused to allow homes with mortgages they back to enter buyback programs, the suit contends, even though it costs them money not to. “For too long, Fannie...

Minority residents in the Twin Cities are much more likely than white people of similar incomes to be rejected for a mortgage, whether they’re buying a home or refinancing. If the home sits in a diverse or mainly nonwhite neighborhood, the application is also more likely to get the boot. Those are the findings of a new study from the University of Minnesota Law School suggesting that mortgage redlining remains alive and well in the Twin Cities. The report suggests that while banks may have justifiably tightened up credit standards, they have swung so far that they are cutting off...

Five years have passed since the onset of what is sometimes called the Great Recession. While the economy has slowly improved, there are still millions of Americans leading lives of quiet desperation: without jobs, without resources, without hope. Who was to blame? Was it simply a result of negligence, of the kind of inordinate risk-taking commonly called a “bubble,” of an imprudent but innocent failure to maintain adequate reserves for a rainy day? Or was it the result, at least in part, of fraudulent practices, of dubious mortgages portrayed as sound risks and packaged into ever more esoteric financial instruments,...

The mortgage market is undergoing a transformation. Fannie Mae and Freddie Mac are doing more credit risk-sharing deals (a sign of things to come) while Citi decides to sells its mortgage servicing portfolio. Oct. 25 (Bloomberg) By Jody Shenn — Freddie Mac “expects to complete another” sale of risk-sharing securities “shortly,” FHFA acting director Ed DeMarco said in speech yesterday afternoon. • NOTE: Freddie spokeswoman said last month it hopes to complete another deal this year; Fannie Mae execs said this month no more deals in 2013, working on one for early next year • FHFA plans for “scope and...

Georgetown law professor, Adam Levitan, testified in the US Senate yesterday on “Fundamentals of a Functioning Private Label Mortgage Backed Securities Market.” 172476171-Levitin-Senate-Banking-Testimony-10-1-13 Levitan was a student of Consumer Financial Protection Bureau architect and former Harvard law school professor Elizabeth Warren (now a US Senator). Levitan is a believer in BIG government and everything is the private sector’s fault. “Relying on PLS (Private Label Securities) to serve as the main financing source for the housing market would be a high-risk gamble with the US economy. Instead, a hybrid public-private system with first-loss private capital backstopped by an explicit and priced...

WASHINGTON – Talk of housing-finance market reform seems close to action as various proposals promise to move forward the national debate about the future of Fannie Mae and Freddie Mac.Four decades ago, Congress set up Fannie Mae and Freddie Mac as government-sponsored enterprises (GSEs) – privately owned financial institutions established by the government to fulfill a public mission. The two GSEs were created to provide a stable source of funding for residential mortgages, including loans on housing for low- and middle-income families. Fannie and Freddie fulfill that mission through their operations in the secondary mortgage market. The two companies...

You've already heard, I'm sure, about Delbert Belton, the 88-year-old World War II veteran who was beaten to death by two black teenagers. The police are assuring everyone that there's no need to get worried, because this wasn't a race crime. Instead, it was Delbert's own fault. According to the police, when the boys tried to rob Delbert, he had the temerity to fight back, leaving them with no other option than to beat an old man to death.A friend of mine noted that, using this reasoning, if one assumes solely for the sake of argument that the race-hustlers are...

The Inspector General for FHFA released a report that claims Fannie Mae and Freddie Mac are masking billions of dollars in losses. The report, written by the inspector general for the Federal Housing Finance Agency and reviewed by Reuters, said the FHFA’s timeframe for mortgage finance companies Fannie and Freddie to have up to two years to recognize the cost of mortgages delinquent at least 180 days was “inordinately long.“ The change in the accounting treatment of these delinquent loans potentially could require Fannie and Freddie, which have rebounded to enormous profitability in the past two years as the housing...