FHFA

FHFA Sues Wells Fargo Regarding Underwriting of RMBS

 

On June 3, the Federal Housing Finance Agency (FHFA), as conservator for the Federal Home Loan Mortgage Corporation (Freddie Mac), filed a lawsuit in the United States District Court for the Southern District of New York against Wells Fargo Securities, LLC (Wells Fargo) (as successor to Wachovia Capital Markets, LLC (Wachovia)), alleging a violation of Section 11 of the Securities Act. FHFA’s lawsuit alleges losses resulting from Wachovia’s underwriting of two NovaStar securitizations purchased in 2006. FHFA alleges that Freddie Mac was misled about the quality of the loans in the bond deals, and that Wachovia, which Wells Fargo acquired in 2008, participated in drafting the registration statements at issue. These registration statements allegedly contained material misstatements and omissions. FHFA further alleges that its claims are timely because of various tolling agreements entered into between FHFA, Freddie Mac and Wells Fargo. The two deals at issue in FHFA’s Complaint are among six securitizations subject to a $165 million class-action settlement between investors and underwriters, including Wells Fargo, from 2017. FHFA has made multiple unsuccessful bids to be excluded from the settlement, including an appeal that the Second Circuit denied in January of this year, where it argued that the settlement would infringe on the agency’s statutorily-authorized conservatorship powers. FHFA has since filed another appeal, which the agency contends permits it to pursue the claims in this Complaint against Wells Fargo.

Second Circuit Upholds Dismissal of U.S. Bank’s Untimely Breach of Contract and Indemnity Claims

 

On February 6, the Second Circuit affirmed a trial court order dismissing repurchase and indemnification claims brought by the Federal Housing Finance Agency (“FHFA“), acting on behalf of U.S. Bank as Trustee, against GreenPoint Mortgage Funding Inc., predicated on allegations that mortgage loans sold by GreenPoint breached representations and warranties in the relevant loan purchase agreements. READ MORE

FHFA Issues Proposed Rule on Enterprise Capital

 

On June 12, 2018, the Federal Housing Finance Agency (“FHFA“) issued a proposed regulation on capital requirements for Fannie Mae and Freddie Mac (the Enterprises). The proposed rule would implement a new framework for risk-based capital requirements and a revised minimum leverage capital requirement for the Enterprises. FHFA suspended regulatory capital requirements after placing the Enterprises into conservatorships in September 2008 and the capital requirements in this rule would also be suspended while the Enterprises remain in conservatorship. Comments on this proposal will be accepted for 60 days after publication in the Federal Register. Press Release. Proposed Rule. Fact Sheet.

FHFA Issues Final Rule on Fannie Mae and Freddie Mac Duty to Serve Underserved Markets

On December 13, 2016, the Federal Housing Finance Agency (FHFA) issued a final rule implementing the Duty to Serve provisions mandated by the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended by the Housing and Economic Recovery Act of 2008 (HERA).  The statute established a duty for Fannie Mae and Freddie Mac to serve three underserved markets: manufactured housing, affordable housing preservation and rural housing.  The intent of the provisions is to increase the liquidity of mortgage investments and improve distribution of investment capital available for mortgage financing for very low-, low- and moderate-income families in the manufactured housing, affordable housing preservation and rural housing markets. Press Release. Final Rule.

 

SIFMA Sends Comment Letters to FHFA on Credit Risk Transfer

 

SIFMA, along with the Association of Mortgage Investors and the National Association of Real Estate Investment Trusts, and separately along with the ABA, AMI, HPC, MBA, and SFIG, submitted comment letters to the FHFA in response to the FHFA request for comments on the GSEs credit risk transfer programs, particularly with respect to exploration of more “front end” risk transfer options that share risk with the private sector before, or concurrently with, the purchase of loans by the GSEs. SIFMA, AMI, NAREIT Comment Letter Joint Trades Comment Letter.

FHFA Further Adjusts Multifamily Lending Caps for Fannie Mae and Freddie Mac

 

On August 18, 2016, the Federal Housing Finance Agency (“FHFA”) announced an additional increase to the 2016 multifamily lending caps for both Fannie Mae and Freddie Mac. The caps for both Fannie Mae and Freddie Mac were raised from $35 billion to $36.5 billion, effective immediately. Press release.

Agencies Finalize Rule Exempting Certain Commercial and Financial End Users from Initial and Variation Margin Requirements

On August 1, 2016, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency and the Farm Credit Administration announced a final rule that contains certain exemptions for “certain commercial and financial end users from margin requirements for certain swaps not cleared through a clearinghouse.”  The rule implemented without any changes the interim final rule from November 2015. Press Release. Press Release. Press Release. Press Release.