State Bankers Assail FHFA Refinance Fee

State bankers associations from every state sent a letter to Federal Housing Finance Agency Director Mark Calabria, urging him to rescind the “adverse market fee” on Fannie Mae and Freddie Mac mortgage refinances. The fee is designed to protect Fannie and Freddie from risk associated with the pandemic. It charges 0.5 percent of the loan amount to the borrower who is refinancing, or roughly $1,400 on the typical mortgage in the United States. “The new fee, referred to as an “adverse market refinance fee,” will harm consumers in urban, rural, and suburban communities across the country,” the associations said in the letter. “Borrowers have been helped by the historically low interest rates, allowing them to refinance their loans into significantly lower…

Mortgage, Housing Groups Assail FHFA Fee

A coalition of housing, banking and public interest groups on Thursday strongly condemned the Federal Housing Finance Agency for implementing an “adverse market fee” on Fannie Mae and Freddie Mac mortgage refinances. The fee is designed to protect Fannie and Freddie from risk associated with the pandemic. It charges 0.5 percent of the loan amount to the borrower, or nearly $1,500 on the typical mortgage in the United States. The American Bankers Association, Mortgage Bankers Association, National Association of Realtors and 17 other organizations called the fee an “ill-timed, misguided” surprise.  “Wednesday night’s surprise announcement by Fannie Mae and Freddie Mac (the GSEs) conflicts with the Administration’s recent executive actions urging federal agencies to take all measures within their authority…

FHFA Announces New Renter Protections

Multifamily property owners whose mortgages are backed by Freddie Mac or Fannie Mae must inform tenants in writing about rent and eviction protections if they enter into a new or modified forbearance agreement, The Federal Housing Finance Agency announced Thursday. While in forbearance due to economic challenges caused by the coronavirus pandemic, property owners must agree not to evict tenants solely for not paying rent. “Landlords in forbearance must notify their tenants that they cannot be evicted for nonpayment of rent due to the pandemic,” FHFA Director Mark Calabria said. “If tenants are able to pay their rent, they should continue to do so.”  Other protections previously announced include: Giving tenants at least a 30-day notice to vacate;Not charging tenants…

GSEs Report Solid Q2 Earnings

Fannie Mae and Freddie Mac reported financial results for the second quarter on Thursday, with Fannie notching net income of $2.5 billion and Freddie recording $1.9 billion. Both companies reported significantly higher net worth as of June 30. Here are the details: Fannie Mae Fannie Mae reported net income of $2.5 billion for the second quarter of 2020, compared with net income of $461 million for the first quarter of 2020 – due primarily to a decline in credit-related expense in the second quarter of 2020 compared with the first quarter of 2020.  Fannie Mae’s net worth increased from $13.9 billion as of March 31, 2020 to $16.5 billion as of June 30, 2020. Fannie Mae provided $542 billion in…

FHFA Releases 2021 Housing Goals For Fannie, Freddie

The Federal Finance Housing Agency on Monday announced 2021 housing goals for Fannie Mae and Freddie Mac that are identical to the mortgage purchase goals that were in place for the last three years. “Due to the economic uncertainty related to the COVID-19 national pandemic, FHFA is proposing benchmarks for calendar year 2021 only, and those levels will remain the same as they were for 2018-2020,” FHFA said in announcing the goals. Here are the single-family goals for 2021: GoalCurrent 2018-2020 benchmark Proposed 2021 benchmarkLow-Income Home Purchase Goal24 percent24 percentVery Low-Income Home Purchase Goal6 percent6 percentLow-Income Areas Home Purchase Subgoal14 percent14 percentLow-Income Refinancing Goal21 percent21 percent Here are the multi-family goals for 2021: GoalCurrent 2018-2020 benchmark Proposed 2021 benchmark Low-Income Goal315,000…

Freddie Appoints CFO Amid Conservatorship Exit Prep

Christian M. Lown will be the new chief financial officer and executive vice president of Freddie Mac as the company seeks to emerge from conservatorship, Freddie announced Tuesday. Lown replaces Donald F. Kish, who has served as interim CFO since December. Kish will continue serving as Senior Vice President, Corporate Controller and Principal Accounting Officer. “I am excited to join Freddie Mac as the company prepares for its next chapter and I look forward to working with such a talented management team and innovative company,” said Lown said. At Navient, Lown was responsible for the accounting, corporate development, financial planning and analysis, investor relations, procurement, treasury, and vendor management functions. Prior to joining Navient in 2017, Lown was Managing Director,…

GSEs Seek Advisors To Leave Conservatorship

Fannie Mae and Freddie Mac are looking for financial advisors to help them emerge from conservatorship. Each of the GSEs announced they will be issuing a request for proposal on Tuesday to “secure a financial advisor that will facility the company’s responsible exit for conservatorship. The advisors will help Fannie and Freddie on everything from capital considerations to business plans to capital raising activities and more. “Even as we work to stabilize the housing markets during this unprecedented pandemic, Freddie Mac has remained focused on exiting conservatorship responsibly,” David Brickman, Freddie Mac CEO David Brickman said. “Today we begin the competitive selection process for a financial advisor that will ultimately facilitate our return to full private capital ownership. This is…

Freddie CEO: Greatest Housing Challenge In Decade

By Jim Perskie Freddie Mac CEO David Brickman said Thursday the housing market is “facing its greatest challenge in more than a decade” and that the impact of the coronavirus will be felt over the next year, at least. Brickman expected home sales – and perhaps home prices – to fall significantly in the second quarter before beginning to recover. “While home prices increased in the first quarter, the future effect of the COVID-19 pandemic is highly uncertain and dependent on the pace of economic recovery,” he said in discussing Freddie Mac’s first quarter financial results. “The decline in home prices could be significant if forbearance and foreclosure mitigation do not limit the effect on home prices.” The Labor Department…

Freddie Mac Earnings Tumble

Freddie Mac on Thursday reported significantly lower earnings for the first quarter of the year as the impact of the coronavirus pandemic began to seep into the mortgage markets late last month. The company’s first quarter net income of $200 million was down from $2.6 billion for the fourth quarter of 2019. Comprehensive income dropped from $2.4 billion in Q4 2019 to $0.6 billion in Q1 2020. Freddie Mac attributed the decrease to: Higher credit-related expense of $1.1 billion primarily driven by higher expected credit losses on loans as a result of the pandemic.Losses on single-family loans held in inventory due to effects from the pandemic, combined with lower gains on single-family reperforming and nonperforming loan sales due to a…

Analysis: 1.4 Million GSE Mortgages In Forbearance

Mark Calabria appears to have misjudged the burden the coronavirus pandemic is going to have on the mortgage industry. Calabria, the director of the Federal Housing Finance Agency, told HousingWire earlier this month that he expected about 1 million mortgages backed by Freddie Mac and Fannie Mae to go into forbearance. Financial technology firm Black Knight found that there were nearly 1.4 million Fannie and Freddie loans in forbearance as of Friday, April 19 – representing 4.9 percent of their mortgages. “In these times, it is essential to both our industry and for the benefit of the entire U.S. economy to have a clear understanding of the magnitude of the mortgage forbearance situation,” Black Knight CEO Anthony Jabbour said. Calabria has been…