FHFA Update on GSE Conservatorships

On March 19, Edward J. DeMarco, acting director of the FHFA, gave an update on the GSE conservatorships before the U.S. House Committee on Financial Services.  Mr. Demarco discussed: (i) the goals of the FHFA as conservator; (ii) the FHFA’s approach to preparing for increased private market participation in housing finance; and (iii) the activities that the FHFA has undertaken during the past year to further its conservatorship goals.  FHFA Update.

SIFMA’s 2013 Securitization Conference

On December 6, SIFMA will host its 2013 Securitization Outlook Conference in New York City, which is set to be a timely and informative conference that will bring together a group of academic and industry leaders to discuss:

  • FHFA’s strategic plan, single securitization platform and the near-term outlook for the GSEs
  • The status of eminent domain for mortgage loans
  • The regulatory and marker outlook for private-label securitization markets

Orrick partner Howard Altarescu will participate in the panel discussion. For more information, please click here.

GSE Implementation of Uniform Loan Delivery Dataset Delayed

On December 14, the FHFA extended implementation dates for the Uniform Loan Delivery Dataset, a component of the Uniform Mortgage Data Program initiative by Fannie Mae and Freddie Mac. The voluntary implementation date is delayed to April 23, 2012, and required implementation is delayed from March 2012 to July 23, 2012. FHFA Release.

FHFA HARP Changes

On October 24, the FHFA released a series of changes to the Home Affordable Refinance Program (HARP) in order to attract more eligible borrowers. The changes to the program include: (i) the elimination and/or lowering of certain fees for borrowers; (ii) the removal of the LTV ceiling for fixed-rate mortgages backed by Fannie and Freddie; (iii) a waiver of certain representations and warranties with respect to loans owned or guaranteed by Fannie and Freddie; and (iv) the elimination of the requirement to obtain a new property appraisal in certain circumstances. The end date of the HARP program has been extended through December 31, 2013 for loans originally sold to the GSEs on or before May 31, 2009. The GSEs will issue guidance on the operational details of the changes by November 15. FHFA Release.

GSE and FHA Conforming Loan Limits Extension Bill

On July 15, Representatives Campbell (R-CA) and Ackerman (D-NY) introduced a bill to the House of Representatives that would extend the 2008 levels of the GSE and FHA conforming loan limits through fiscal year 2013. The limits are scheduled to adjust downward this fall from $729,750 to $625,500 in compliance with the Housing and Economic Recovery Act of 2008. The bill has been referred to the House Committee on Financial Services. House Bill.

Fannie, Freddie Agreements with Ally and BofA

On January 3, the FHFA approved agreements between Fannie Mae and Freddie Mac with Ally Financial and Bank of America to resolve claims related to mortgages sold to the GSEs. Each agreement covers a different book of business and has different limitations. The agreements do not address representations and warranties with regard to mortgage servicing or foreclosure processing. For more information, see below. FHFA Release.

High-Cost Loan Limit Extension

On September 29, the House and Senate each passed a continuing resolution which includes provisions to extend the current HECM, GSE, and FHA loan limits for high-cost areas through September 30, 2011.  The loan limit caps are currently set to expire at the end of this year.  President Obama signed the continuing resolution on September 30. Continuing Resolution. Summary of Continuing Resolution.

Treasury and Fed Developments

On November 12, Treasury Secretary Paulson announced that Treasury would not be purchasing troubled assets under TARP, as was originally contemplated with the passage of the Emergency Economic Stabilization Act. Secretary Paulson set forth three priorities for the deployment of remaining TARP funds: (1) strengthening the capital positions of financial institutions, including implementing measures to attract private capital, (2) encouraging investment in ABS, potentially by providing investors with access to federal financing, and (3) mitigating mortgage foreclosures. Secretary Paulson also remarked that Treasury’s preferred stock purchase agreement with the GSEs is “effectively, a guarantee on GSE debt and agency MBS.”  Orrick Client Alert.  Secretary Paulson’s Remarks.

On November 10, Treasury announced that it will purchase, under the Emergency Economic Stabilization Act, $40 billion of newly issued preferred shares of AIG, which it referred to as a “systemically important company.” In conjunction with this announcement, the New York Fed announced reductions on interest on AIG’s credit facility and extended its length from two to five years. The Fed also created two additional AIG lending facilities, one to fund CDO securities on which AIG has written CDS contracts and one to fund RMBS from AIG’s lending portfolio.  Treasury Release.  Fed Release.

On November 10, the Fed approved the application of American Express Company and American Express Travel Related Services Company, Inc. to become bank holding companies on conversion of American Express Centurion Bank from an industrial loan company to a bank.  Fed Release.

On November 10, the New York Fed announced that purchases of eligible money market instruments through the Money Market Investor Funding Facility would begin on or about November 24.  New York Fed Release.