Fannie Mae Reports $11.8B In Net Income

Fannie Mae released its 2020 financial results Friday, reporting $11.8 billion in net income for the year and $4.6 billion in the fourth quarter. Fannie’s net worth climbed to $25.3 billion at the end of the year, up from $14.6 billion at the end of 2019. The company reported providing a record $1.4 trillion in liquidity to single-family and multifamily mortgage markets. That includes 3.4 million refinanced loans amid historically low interest rates. “2020 presented the nation with an historic test and Fannie Mae rose to the challenge, delivering a record $1.4 trillion in mortgage liquidity to meet home purchase, refinancing, and rental housing needs,” Chief Executive Officer Hugh R. Frater said.…

GSEs To Stay Under Govt Control For Time Being

The Trump Administration announced Thursday that it would not seek to pull Fannie Mae and Freddie Mac out of conservatorship before President Trump leaves office next week.  Instead, the Department of Treasury and the Federal Housing Finance Agency announced amendments to their preferred stock purchase agreements that allows Fannie and Freddie to keep more of their earnings as they continue to work to leave conservatorship. “Today’s agreement that allows Fannie Mae and Freddie Mac to continue retaining earnings is a step in the right direction, but more hard work remains,” FHFA Director Mark Calabria said. “Capital at Fannie Mae and Freddie Mac protects the housing finance system and taxpayers. Retained earnings alone are insufficient to adequately capitalize the Enterprises. Until…

FHFA Extends Multifamily Forbearance Offer

The Federal Housing Finance Agency announced Wednesday that Fannie Mae and Freddie Mac are extending forbearance opportunities to qualifying multifamily property owners through the end of March. The multifamily forbearance program, which had been set to expire at the end of this year, allows property owners with Fannie or Freddie-backed mortgages to enter a new or modified forbearance program if they suffer financial hardship to the Covid-19 pandemic. Property owners who enter into a forbearance agreement must: Inform tenants in writing about tenant protections available during the property owner’s forbearance and repayment periods.Agree not to evict tenants solely for the nonpayment of rent while the property is in forbearance.  Additional tenant protections apply during the repayment periods, including: Giving tenants…

Rule Would Require Living Wills For Fannie, Freddie

The Federal Housing Finance Agency announced a new proposed rule Tuesday that would require Fannie Mae and Freddie Mac to have living wills, similar to what many large financial institutions must file under federal law. Under the proposed rule, Fannie and Freddie will have to demonstrate “how core or important business lines would be maintained to ensure continued support for mortgage finance and stabilize the housing finance system, without extraordinary government support to prevent (Fannie or Freddie) from being placed in receivership, indemnify investors against losses, or fund the resolution of (Fannie or Freddie).” “The rule proposed today is an important step toward a stronger housing finance system. Requiring the Enterprises to develop living wills, helps FHFA fulfill its responsibility…

Waters Opposes Calabria’s Fannie, Freddie Goals

Mark Calabria wants to pull Fannie Mae and Freddie Mac from conservatorship by the time President Trump leaves office next month. Not so fast, says Rep. Maxine Waters. The chairwoman of the House Financial Services Committee sent Calabria a letter last week urging him to “fully engage with Congress, halt all efforts to raise the capital requirements for Fannie Mae and Freddie Mac and halt all efforts to release them from conservatorship.” “I believe that it is entirely inappropriate for you and your agency to be focusing on releasing the Enterprises from conservatorship during the pandemic with the assistance of a lame duck Treasury Secretary,” Rep. Waters wrote. “At the very least, the Congress and the American public deserve transparency…

Calabria Seeks To End Conservatorship By Jan. 20

Federal Housing Finance Agency Director Mark Calabria is trying to pull Fannie Mae and Freddie Mac out of conservatorship before the Trump Administration ends on January 20, the Wall Street Journal reported. Mark Calabria, a libertarian economist who heads the Federal Housing Finance Agency, has made it a priority to return Fannie and Freddie to private hands, a goal shared by Mr. Mnuchin. How that is done could affect the cost and availability of mortgages backed by the companies, which guarantee roughly half of the $11 trillion in existing home loans. Completing the complex process before President Trump’s term ends on Jan. 20 is a long shot, and President-elect Joe Biden is considered unlikely to continue the effort. But Messrs.…

FHFA Sets Multifamily Fannie, Freddie Caps

The 2021 multifamily loan purchase caps for Fannie Mae and Freddie Mac will be $140 billion – or $70 billion for each Fannie and Freddie, the Federal Housing Finance Agency announced Tuesday. The $140 billion will support the multifamily market, and at least 50 percent of Fannie and Freddie’s multifamily loans are required to be used for affordable housing. “Multifamily housing is a critical component of the nation’s housing supply and especially of its affordable housing stock.  As we continue to address the shortage of affordable housing, especially amid the COVID crisis, FHFA will keep a close eye on the multifamily caps to ensure that they are sufficient and serve to increase the supply of affordable housing but do not…

FHFA Approves GSE Use Of Classic FICO

The Federal Housing Finance Agency announced Tuesday that it had validated and approved the use of the Classic FICO credit score model by Freddie Mac and Fannie Mae as work continues to assess adopting more modern credit score tools. In February, FHFA sought input on new credit score models, but Tuesday’s announcement gives FHFA time to sort through the different models. FHFA said it expects Fannie and Freddie will take “an additional year to complete the validation and approval process of the remaining credit score models submitted in response to the solicitation.” “The validation and approval of Classic FICO by the Enterprises allows them to continue supporting the mortgage market while assessing more modern credit score models that were submitted…

FHFA Extends GSEs Ability To Buy Loans In Forbearance

The Federal Housing Finance Agency announced Wednesday that it will extend Fannie and Freddie’s ability to purchase some single-family mortgages in forbearance to continue to support the liquidity of mortgage lenders during the pandemic. FHFA originally put the policy in place in April in response to borrowers seeking mortgage forbearance shortly after closing on loans – and before the lender could deliver the loan to Fannie Mae or Freddie Mac. Prior to the change, loans in forbearance were ineligible to be sold under Fannie and Freddie requirements, placing the borrower and the lender in jeopardy. The latest extension covers loans originated through November 30. “Eligible loans will continue to be priced to mitigate the heightened risk of loss to the…

FHFA Proposes New Fannie, Freddie Product Rule

The Federal Housing Finance Agency on Monday announced a new rule that would require Fannie Mae and Freddie Mac to provide advance notice to FHFA of new activities and obtain prior approval before launching new products. The rule, which was announced by FHFA Director Mark Calabria at the Mortgage Bankers Association’s annual meeting, “establishes revised criteria for determining whether a new activity requires notice to FHFA and for determining if that activity is a new product that merits public notice and comment.”  “The proposed rule will enhance the safety and soundness of the secondary mortgage market by ensuring the Enterprises adhere to their statutory missions,” Calabria said. “This proposed rule is an important step as the Agency works to end…