Dodd-Frank News Center

FHFA issues report on Enterprises' non-performing loan sales

This story appeared in Bank Digest.                                   

The Federal Housing Finance Agency has released its "Enterprise Non-Performing Loan Sales Report," which provides information on sales of non-performing loans (NPLs) by Fannie Mae and Freddie Mac (the Enterprises), as well as post-sale borrower outcomes. According to the report, the Enterprises' NPL sales reduce the number of delinquent loans held in their inventories and transfer credit risk to the private sector. NPLs are generally one year or more delinquent.                                   

Among other information, the report provides the quantity and attributes of NPLs sold from Aug. 1, 2014, through June 30, 2017, and reflects borrower outcomes as of June 30, 2017, on NPLs sold through Dec. 31, 2016.

Latest Foreclosure Prevention Report issued

This story appeared in Bank Digest.                                   

The Federal Housing Finance Agency has issued its Foreclosure Prevention Report for August 2017. According to the report, Fannie Mae and Freddie Mac (the Enterprises) completed 15,298 foreclosure prevention actions in August, bringing the total to 3,960,367 since the Enterprises were placed into conservatorship in September 2008. More than half of these actions have been permanent loan modifications.                                   

In addition, there were 11,234 permanent loan modifications in August, bringing the total to 2,109,381 since the start of the conservatorships. Regarding the Enterprises' mortgage performance, the report said the serious delinquency rate fell from 0.94 percent at the end of July to 0.93 percent at the end of August.

FHFA modifies streamlined refinance program, extends HARP

This story appeared in Bank Digest

The Federal Housing Finance Agency has announced modifications to the streamlined refinance program for borrowers with high loan-to-value (LTV) ratios. In August 2016, FHFA announced that Fannie Mae and Freddie Mac (the Enterprises) would implement a High LTV Streamlined Refinance program to provide much-needed liquidity for borrowers who are current on their mortgage but are unable to refinance because their loans have LTV ratios that exceed the Enterprises' maximum limits. In order to preserve the objectives of the Enterprises' credit risk transfer program, FHFA is establishing an eligibility date which makes the program available for loans originated on or after Oct. 1, 2017. In addition, to ensure that high LTV borrowers who are eligible for HARP continue to have a refinance option, FHFA is also directing the Enterprises to extend the Home Affordable Refinance Program through Dec. 31, 2018.

Second Quarter 2017 Refinance Report filed

This story appeared in Bank Digest

The Federal Housing Finance Agency has released its Second Quarter 2017 Refinance Report, which shows that more than 356,000 refinances were completed in the second quarter of 2017, compared with approximately 510,000 in the first quarter. FHFA reported that nearly 9,700 homeowners refinanced their mortgages in the second quarter through the HARP program, bringing the total number of HARP refinances to almost 3.5 million since inception of the program in 2009.

Latest Foreclosure Prevention Report issued

This story appeared in Bank Digest

The Federal Housing Finance Agency has issued its Foreclosure Prevention Report for May 2017. According to the report, Fannie Mae and Freddie Mac (the Enterprises) completed 15,683 foreclosure prevention actions in May, bringing the total to 3,914,668 since the Enterprises were placed into conservatorship in September 2008. More than half of these actions have been permanent loan modifications.

In addition, there were 10,769 permanent loan modifications in May, bringing the total to 2,076,345 since the start of the conservatorships. Regarding the Enterprises' mortgage performance, the report said the serious delinquency rate fell further from 1.01 percent at the end of April to 0.98 percent at the end of May.

FHFA issues report on results of Enterprises' annual stress tests

This story appeared in Bank Digest

The Federal Housing Finance Agency has released a report providing the results of the annual stress tests Fannie Mae and Freddie Mac (the Enterprises) are required to conduct under the Dodd-Frank Act. According to the FHFA, the report provides updated information on possible ranges of future financial results of the Enterprises under severely adverse economic conditions.

The Dodd-Frank Act requires certain financial institutions with more than $10 billion in assets to conduct annual stress tests to determine whether they can absorb losses as a result of adverse or severely adverse economic conditions.

OIG says FHFA should improve administration of Suspended Counterparty Program

This story appeared in Bank Digest.                                  

The Federal Housing Finance Agency’s Office of Inspector General has issued a report to assess the administration by the FHFA's Office of General Counsel of the agency's Suspended Counterparty Program and determine whether the program is achieving its stated objective. According to the report, the FHFA adopted the SCP in June 2012 to augment counterparty risk management programs of Fannie Mae and Freddie Mac and the Federal Home Loan Banks (the regulated entities) that were designed to protect them from excessive financial loss caused by deterioration in a counterparty's financial condition.                                   

The OIG found deficiencies in OGC's administration of the SCP, the remediation of which could enable the program to effectively limit the regulated entities' exposure to the risks inherent in doing business with counterparties found to have engaged in covered misconduct, according to the report. The OIG recommended that the FHFA establish a plan with a timeline to reduce the backlog of referrals under the SCP and document its reasons for any departures from the suspension periods prescribed in its guidelines.

Royal Bank of Scotland pays $5.5B to settle FHFA securities claims

This story appeared in Bank Digest.                                  

The Royal Bank of Scotland Group plc has agreed to pay $5.5 billion to resolve claims brought against RBS, related companies, and specifically named individuals by the FHFA in relation to RBS's issuance and underwriting of approximately $32 billion of residential mortgage-backed securities.                                   

The FHFA had charged RBS with violating federal and state securities laws in connection with private-label RMBS trusts purchased by Fannie Mae and Freddie Mac between 2005 and 2007. RBS will pay approximately $4.525 billion to Freddie Mac and approximately $975 million to Fannie Mae. As a part of the settlement agreement, RBS did not admit to any wrongdoing.

Powell speaks on housing finance reform before American Enterprise Institute

This story appeared in Bank Digest.                        

Fed Governor Jerome H. Powell spoke at the American Enterprise Institute in Washington, D.C., on July 6, 2017. The subject of his prepared remarks was "The Case for Housing Finance Reform." 

In his prepared remarks, Powell discussed what he believes is an urgent need for fundamental reform of the housing finance system, arguing that it is "the great unfinished business of post-financial crisis reform." Powell believes that now is the time to address the housing finance system's shortcomings while the economy and housing sector are healthy and before the memories of the crisis fade. He offered five principles for reform that he believes should be taken into consideration based on lessons learned from the old system's collapse and from the experience of post-crisis bank reform.

FHFA establishes minority and women outreach program

This story appeared in Bank Digest.

The Federal Housing Finance Authority is establishing a minority and women outreach program pursuant to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989; the Federal Housing Enterprises Financial Safety and Soundness Act of 1992; and the Dodd-Frank Act. The final rule establishing the program also redesignates the current Minority and Women Inclusion regulation in the Code of Federal Regulations to Subchapter B of the FHFA’s regulations. The final rule is effective March 24, 2017.