On September 19, FHFA launched a new FHFA Quarterly Performance Report of the Housing GSEs which provides a summary of data available in Fannie, Freddie and the FHLBanks’ public filings, including certain combined trends. The first issue covers the second quarter of 2013 and includes such factors as house prices, average interest rates and swap rates. The reportalso includes a quarterly update on the conservatorships of Fannie and Freddie. Release. Report.
FHFA
Joint Proposal on Risk Retention
On August 28, the FDIC, Fed, FHFA, OCC, SEC and HUD issued a notice of revised proposed rulemaking relating to required risk retention by sponsors in securitization transactions. The proposed rule would define “qualified residential mortgage” (QRM) in the same way that the CFPB has defined qualified mortgages (QMs) and would exempt securitizations of QRMs from the risk retention requirements. Comments on the revised proposed rule must be submitted by October 30. Joint Release. Proposed Rule.
FHFA Input on Freddie Mac and Fannie Mae Multifamily Businesses
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.
UBS Reaches Settlement with the FHFA
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.
FHFA Statement on Freddie Mac Risk-Sharing Transaction
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.
Appraisal Exemption for Higher-Priced Mortgages
On July 10, the Fed, the CFPB, the FDIC, the FHFA and the OCC issued a joint proposed rule which would create exemptions from certain appraisal requirements for a subset of higher-priced mortgage loans. The proposed rule would provide exemptions for: (i) transactions secured by existing manufactured homes and not land; (ii) certain “streamlined” refinancings; and (iii) transactions of $25,000 or less. Comments must be received on or before September 9. Joint Release. Proposed Rule.
FHFA Report to Congress
On June 13, the FHFA released its fifth annual Report to Congress detailing its 2012 examinations of Fannie Mae, Freddie Mac and the Federal Home Loan Banks. The FHFA deemed Fannie and Freddie ‘critical concerns’ in 2012 but noted that they each generated positive annual income. FHFA Release. FHFA Report to Congress.
Citi Settles FHFA’s $3.5B RMBS Suit
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.
FHFA Limit on Fannie and Freddie Loan Purchases to Qualified Mortgages
On May 6, the FHFA announced that it is directing Fannie Mae and Freddie Mac to limit future mortgage acquisitions to loans that fall under the requirements for a qualified mortgage. Starting on January 10, 2014, Fannie and Freddie will no longer be able to purchase a mortgage loan that is subject to the “ability to repay” requirements under the Dodd-Frank Act if the loan: (i) is not fully amortizing; (ii) has a term of longer than 30 years; or (iii) includes points and fees in excess of 3% of the total loan amount (or such other limits for low balance loans as set forth in the rule). FHFA Release. Fannie Mae Letter. Freddie Mac Letter.
FHFA GSE Viability Reports
On May 3, the FHFA released reports prepared by Fannie Mae and Freddie Mac on their multifamily businesses which conclude that without government guarantees, the multifamily businesses of Fannie and Freddie have little inherent value. FHFA Release. Fannie Mae Report. Freddie Mac Report.