On November 6, Wells Fargo & Co. disclosed in a regulatory filing with the Securities and Exchange Commission that it settled claims by the Federal Housing Finance Agency (acting as conservator to Fannie Mae and Freddie Mac) against it for approximately $335 million. Wells Fargo noted that Fannie Mae and Freddie Mac had opted out of a class settlement approved in 2011 in a suit alleging misstatements in the offering documents for the RMBS securitizations. 10Q Excerpt.
On November 5, the FHFA directed Fannie Mae and Freddie Mac to prohibit servicers from being reimbursed for expenses associated with captive reinsurance arrangements. FHFA Release.
On October 7, the FHFA announced that the joint venture between Fannie Mae and Freddie Mac to build and create a new common securitization platform has reached certain milestones, including the filing of a certificate of formation for the legal entity created by the joint venture as well as leasing office space. FHFA Release.
On August 9, the FHFA announced that it is seeking public input on strategies to reduce Fannie Mae and Freddie Mac‘s presence in the multifamily housing market and is seeking input on various proposed alternatives. Input must be received within 60 days or not later than October 8. FHFA Release and Proposal.
On July 25, the FHFA announced that it had settled its claims against UBS AG concerning mortgage-backed securities that UBS sold to Fannie Mae and Freddie Mac between 2004 and 2007. UBS agreed to pay a total of $885 million. The settlement covers federal and state securities claims concerning 33 separate RMBS securitizations that FHFA asserted against UBS in four separate lawsuits filed in 2011. The settlement also provides that the FHFA will not bring putback claims in connection with certain other securities covered by the agreement. UBS did not admit any liability in connection with the settlement. Release and Agreement.
On July 24, the FHFA announced that Freddie Mac is nearing completion of its first risk-sharing transaction, a direct debt issuance, that will assist Freddie Mac in transferring credit risk to the private sector on recently-acquired, single-family loans. FHFA Release.
Can shareholders of a government-sponsored enterprise successfully challenge the constitutionality of a government takeover of the entity? Shareholders of Fannie Mae and Freddie Mac will try to do so in a $41 billion class action filed against the United States in the Court of Federal Claims on June 10. Plaintiffs allege that even though the Federal Housing Finance Authority’s 2008 takeover of the mortgage giants benefited the nation as a whole, it harmed the companies’ shareholders and violated their constitutionally protected private ownership rights. For more information on this suit and to visit our Securities Litigation blog, please click here.
On May 28, the FHFA, acting on behalf of Fannie Mae and Freddie Mac, dismissed its lawsuit against Citigroup Inc. and certain of its affiliates and employees after reaching a settlement with defendants. The lawsuit related to over $3.5 billion in RMBS that Fannie Mae and Freddie Mac allegedly purchased from Citigroup. The suit was one of 18 cases filed by the FHFA against a number of investment banks between July and September 2011. In this case, as in the others, the FHFA asserted a number of state and federal securities claims alleging that Citigroup made material misrepresentations and omissions in the offering documents for the RMBS at issue. This is the second of the 18 cases, along with the case against General Electric, in which the FHFA has reached a settlement. Stipulation.
On May 23, Freddie Mac announced that it has begun securitizing certain performing modified mortgage loans held in its portfolio. These loans have been current for at least six consecutive months. Freddie Mac Release.
On May 30, Treasury and HUD announced an extension of the Making Home Affordable Modification Program (HAMP) through December 31, 2015. In addition, on May 30, the FHFA announced that it has directed Fannie Mae and Freddie Mac to extend the HAMP modification program and the streamlined modification initiative through year-end 2015. HAMP eligibility was originally scheduled to sunset in December 2013, and the streamlined modification initiative was originally expected to end in August 2015. Treasury Release. FHFA Release.