On November 26, the FHFA announced that the 2014 maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac will remain at the existing levels in most areas. Press Release.
Freddie Mac
FHFA Announces Changes to Fannie Mae and Freddie Mac Mortgage Insurance Master Policy Requirements
On December 2, the FHFA announced that Fannie Mae and Freddie Mac have completed the first major overhaul of mortgage insurance master policy requirements. Fannie Mae and Freddie Mac, with FHFA oversight, addressed gaps in the existing master policy framework, focusing on loss migration, establishing timeframes for claim processing, setting standards for determining when coverage must be maintained or could be revoked, and promoting information sharing. Press Release.
FHFA Notice on Lender-Placed Insurance Practices
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.
FHFA Common Securitization Platform
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.
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.
Shareholders Allege Improper Takeover of Fannie and Freddie by the Government
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.
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.
Freddie Mac $1 Billion Performing Modified Loan Securitization
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.