On March 16, the FHFA issued a Progress Report on the initiatives outlined in the 2014 Strategic Plan for the Conservatorships of Fannie Mae and Freddie Mac and the 2014 Conservatorship Scorecard. The Progress Report describes activities Fannie Mae and Freddie Mac undertook in 2014 to further FHFA’s conservatorship goals: Maintain, Reduce, and Build. Release. Report.
On March 2, FHFA announced changes to requirements for sales of non-performing loans (NPLs) by Freddie and Fannie to reduce the number of severely delinquent loans held in their inventories and to transfer risk to the private sector. The requirements are expected to encourage broad participation by potential investors and provide for future publication of aggregate data about borrower outcomes. Release. Fact Sheet.
On January 30, the Federal Housing Finance Agency (FHFA) today proposed new minimum financial eligibility requirements for Fannie Mae and Freddie Mac Seller/Servicers. The proposed minimum financial requirements include net worth, capital ratio and liquidity criteria for the Enterprises’ Seller/Servicers. FHFA is releasing the proposed criteria to provide greater transparency, clarity and consistency to industry participants and other stakeholders, and anticipates finalizing these requirements in the second quarter of 2015. Release.
On January 27, 2015 the FHFA Director, Melvin L. Watt, testified in front of the U.S. House of Representatives Committee on Financial Services. Director Watt’s testimony provided, amongst other items, an update on the financial condition of Fannie Mae and Freddie Mac and the financial condition of the Federal Home Loan Banks. Release.
On January 14, FHFA released the 2015 Scorecard outlining specific priorities for Fannie Mae, Freddie Mac and their joint venture, Common Securitization Solutions, LLC. The Scorecard assesses Fannie and Freddie’s performance under FHFA’s Strategic Plan for Fannie and Freddie and furthers the goals outlined thereunder, including building a new single-family securitization infrastructure for use by the Enterprises. Release. Scorecard. Strategic Plan.
On November 18, Judge Denise Cote of the United States District Court for the Southern District of New York granted the Federal Housing Finance Agency’s motion for partial summary judgment on the statute of limitations defense asserted by Nomura and related entities. FHFA, as conservator for Fannie Mae and Freddie Mac, alleges that Nomura made materially false statements in offering documents for RMBS between 2005 and 2007 in violation of Sections 11 and 12(a)(2) of the Securities Act of 1933. Judge Cote found that Fannie and Freddie did not have sufficient information by September 2007 to determine whether the offering documents contained misstatements, and that a reasonably diligent investor in their position would not have investigated the offering documents or discovered the misstatements by that date. As a result, the Court held that FHFA’s claims were not barred by the statute of limitations. Opinion & Order.
On October 30, the index of interest rates published by the FHFA on conventional purchase-money mortgages decreased slightly from August to September from 4.08% to 4.06%. Release.
On October 6, the FHFA announced that it is extending the comment period for its proposed rule on Federal Home Loan Bank membership by 60 days, or to January 12, 2015. The proposed rule would revise the requirements for financial institutions to apply for and retain membership in one of the 12 Federal Home Loan Banks. Press Release. Proposed Rule.
On September 12, the FHFA and several HSBC affiliates and certain of their current and former officers (collectively, HSBC) announced a US$550 million settlement of claims that the FHFA had brought against HSBC in the Southern District of New York. FHFA, acting as conservator for Fannie Mae and Freddie Mac, alleged that HSBC made false and misleading statements in offering documents issued in connection with 19 RMBS securitizations. It brought claims for violations of Sections 11, 12(a)(2), and 15 of the Securities Act of 1933, as well as the Virginia and Washington, D.C., Securities Acts. HSBC did not admit liability or wrongdoing. Settlement Agreement.
On September 2, the FHFA proposed a rule that would revise the requirements for financial institutions to apply for and retain membership in one of the 12 Federal Home Loan Banks (Banks). The proposed rule would revise FHFA’s existing Bank membership regulation to ensure that members maintain a commitment to housing finance and that only eligible entities can gain access to Bank advances and the benefits of membership. Release. Proposed Rule.