Tag Archives: GSE

Fannie Mae sells $1 billion in NPLs to Goldman Sachs subsidiary, private equity

In what is becoming a frequent occurrence, Fannie Mae announced Tuesday that it sold a large portfolio of non-performing loans to a collection of private equity funds and a subsidiary of Goldman Sachs.

The government-sponsored enterprise said Tuesday that it sold off $1.06 billion in non-performing loans from its portfolio, with some now-familiar names making up the buyer pool.

Among the buyers is MTGLQ Investors, a “significant subsidiary” of Goldman Sachs.  According to the Securities and Exchange Commission, Goldman Sachs owns, directly or indirectly, at least 99% of the voting securities of MTGLQ Investors, L.P.

This latest purchase is MTGLQ Investors’ fifth purchase of NPLs from one of the GSEs this year alone.

Over the course of this year, in various sales, MTGLQ Investors bought more than $2.3 billion in unpaid principal balance from the GSEs.

Read on.

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Corker, Warner, bipartisan Senate coalition to FHFA: Leave GSE reform to us

Housingwire:

Over the last few months, several groups, including 32 congressional Democrats, attempted to push the Federal Housing Finance Agency to allow Fannie Mae andFreddie Mac to rebuild their dwindling capital base.

The letter sent by the congressional Democrats asked FHFA Director Mel Watt to use the supposed authority granted to him by the Housing and Economy Recovery Act of 2008 to let Fannie and Freddie hold capital instead of funneling it to the Department of the Treasury, as is stipulated by the Preferred Stock Purchase Agreements that went into effect when the government took Fannie and Freddie.

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In the wake of that letter, a group of the largest trade organizations in housingdelivered a strong rebuke to the Democrats’ efforts, as the Mortgage Bankers AssociationNational Association of RealtorsAmerican Bankers AssociationNational Association of Home Builders, and the National Housing Conference said that their view is that “comprehensive reform to the secondary housing finance system must come through Congress,” rather than from Watt and the FHFA.

Thus far, the FHFA has not responded directly to those efforts, but Watt did take part in the Financial Stability Oversight Council’s annual report, which stated that it believes that Congress needs to take the lead on housing finance reform to fully stabilize the country’s housing finance system.

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But just how far down the road is housing finance reform? The conclusion of the senators’ letter gives insight into the lack of inertia for GSE reform in the current Congress.

Spoiler alert: Don’t hold your breath for GSE reform this year.

“In closing, we are hopeful that housing finance reform will be on the agenda for the next Congress and Administration and look forward to working with you on that effort,” the senators conclude. “Until that time, we strongly encourage you to focus your efforts on steps that would help, not hurt, housing finance reform legislation.”

To read the senators’ full letter, click here.

 

George Will takes on #FannieGate, says GSEs ‘should never have existed’

Well, it seems we can’t go more than a few days without a prominent, national media personality commenting on the stability and standing of Fannie Mae and Freddie Mac, how the government-sponsored enterprises ended up in conservatorship, and what’s next for the GSEs.

Last month, Rolling Stone’s Matt Taibbi wrote that there was a government conspiracy behind the bailout and subsequent takeover of Fannie and Freddie, and that the government is preparing to hand the housing finance system over to the big banks.

And now, no less than George Will has weighed in on “#FannieGate,” the now viral movement first covered by HousingWire.

ICYMI: #FannieGate includes some Fannie and Freddie shareholders, many of which claim that the government’s “sweep” of all of the GSEs’ profits was unwarranted, unwanted and maybe even illegal.

In what appears to be a syndicated column, spotted on DelawareOnline.com, Will writes about the “misadventures of Fannie and Freddie,” and it’s clear from reading Will’s piece that not only does he think the GSEs current status is unsustainable and unhealthy, he also thinks the creation of Fannie and Freddie was a giant mistake.

Will’s piece starts out:

Gigantic government’s complexity and opacity provide innumerable opportunities for opportunists to act unconstrained by clear law or effective supervision. Today’s example, involving the government’s expropriation of hundreds of billions of dollars, features three sets of unsympathetic actors — a grasping federal government, a few hedge funds nimble at exploiting the co-mingling of government and the private sector, and two anomalous institutions that should never have existed.

Read on.

International manhunt ends in arrest of field servicer provided services to one of the GSEs on child prostitution charges

Housingwire:

[Editor’s note: The following story contains graphic details.]

Mickey Snow, the owner and operator of a multi-state field services provider that until recently provided services to one of the government-sponsored enterprises, was arrested in Thailand after leading authorities on a worldwide chase to avoid prosecution on child prostitution charges.

According to various media reports, Snow owns and operates Snow Enterprises, which operates in North Carolina, Florida and Kentucky. Snow Enterprises’ websitestates that the company provides appraisals, property inspections, property preservation, as well as other services.

Sources tell HousingWire that Snow Enterprises had a contract to provide services to one of the GSEs, until the sordid details that lead to Snow’s arrest first became public and the contract was canceled.

According to a report from Greensboro.com, Snow, 75, fled the country earlier this year after details of a child prostitution ring first shook the city of Eden, North Carolina in September.

The prostitution ring allegedly involved a mother pimping out her underage daughters to older men.

According to the Greensboro.com report, local police learned in early September that two teenage girls told the Department of Social Services they had been prostitutes since January 2013.

The report states that the girls said that their clients were older men and that their mother facilitated the deals.

From the Greensboro.com report:

Police that day charged their mother — 52-year-old Teresa Vanover of Carolina Avenue in Eden — with 24 counts of child abuse by prostitution and 24 counts of promoting prostitution.

The mother would take the girls to various men, who gave Vanover money in exchange for performing sex acts on the girls.

House vote on GSE CEO pay limits delayed two weeks

The chief executive officers of Fannie Mae and Freddie Mac will have to wait two more weeks to see if Congress will vote to install limits on their compensation, after a busy Congressional calendar delayed a scheduled vote on the compensation packages of Fannie Mae CEO Timothy Mayopoulos and Freddie Mac CEO Donald Layton.

The House of Representatives was due to vote last week on limiting the pay of the Fannie and Freddie CEOs, but that vote was delayed by a combined house budget vote, a vote on reopening the federal Export-Import Bank, and a vote on electing Rep. Paul Ryan, R-Wis., as the newSpeaker of the House.

Now, the vote on limiting the pay of the GSE CEOs is tentatively scheduled for the week of Nov. 16, according to the office of Rep. Ed Royce, R- Calif., who authored the House’s Equity in Government Compensation Act of 2015.

Royce’s bill, and a companion bill in the Senate, would cap the GSE CEOs’ pay at its current level, which is $600,000, instead of the $3 million raises that were awarded to Mayopoulos and Layton earlier this year by the Federal Housing Finance Agency.

Read on.

Did Sen. Corker violate SEC rules, Senate ethics by telling investors to short GSEs?

Loose lips, sink ships…

Made questionable remarks on CNBC regarding stocks

[Update 12:25 p.m. ET: Response from Corker’s office]

Sen. Bob Corker, R-Tenn. appeared on CNBC Wednesday discussing the issue of conservatorship for the GSEs, and in dismissing a report suggesting the White House is open to ending conservatorship he said investors should shortFannie Mae and Freddie Mac.

Corker said “hedge funds” are spreading false rumors that the White House wants to “re-IPO” Fannie and Freddie.

“People should be short it, because it’s major BS,” Corker said. “It’s just talking your own book.”

He was referring to an Oct. 5 note from the research firmPolitical Alpha. This note made the rounds in both Washington and Wall Street causing GSE shares to trade-up. The note states:

Multiple sources have confirmed that the White House has reached out to the housing finance community to better understand its options on what to do with the GSEs after conservatorship.

The Administration is in the very early stages of looking at various options to end the GSEs conservatorship.  This is a major shift in thinking as it would entail ending the GSE profit sweep allowing Fannie and Freddie to begin to retain capital.  While we have been told the Administration is not close to deciding how to proceed, the initial announcement of the White House’s intent would clearly be beneficial to the entire capital structure of the GSEs.

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This raises serious questions about whether Corker, who serves on the Banking, Housing and Urban Affairs and is author of a bill, “Jumpstart the GSEs” which is currentlylanguishing in the Senate, violated Senate ethics rules, Securities & Exchange Commission or both.

Corker is also co-author of Corker-Warner, a housing reform bill that failed in the Senate.

Read on.

Click here to see video of Sen. Corker’s interview with CNBC’s Rick Santelli. 

Fannie, Freddie form new company to develop single GSE bond

Fannie Mae and Freddie Mac have taken another step in the development and day-to-day management of a single GSE bond by joining together in the formation of a new company.

The two companies established Common Securitization Solutions, a jointly owned limited liability company, with the goal of facilitating the design and eventual implementation of the single GSE bond through the Common Securitization Platform.

Common Securitization Solutions will operate the Common Securitization Platform once it is established, although there has been no acknowledgment of a specific timeline for the development of either the single GSE bond or the Common Securitization Platform to this point.

When the GSE’s conservator, the Federal Housing Finance Agency, released its proposal for the “Single Security” in August, the agency said that it would take “multiple years” to build the single security.

Read on.