Selling distressed loans to investors significantly cuts foreclosure rates
Despite skepticism by many advocates, the Federal Housing Administration (FHA) and Fannie Mae and Freddie Mac (the government-sponsored enterprises, or GSEs) increasing rely on auctioning off severely delinquent mortgages to private investors to dispose of these distressed assets. In January, we showed that sales of distressed or nonperforming loans (NPLs) have been effective from the borrowers’ and taxpayers’ perspectives, but these conclusions were based on limited data. Over the past few weeks, the FHA and the GSEs’ regulator, the Federal Housing Finance Agency (FHFA), have released new, more complete data, which allow us to confirm that this program significantly cuts...
Done deal: AIG finalizes sale of United Guaranty to Arch Capital Group
American International Group officially closed the sale of its mortgage-guaranty unit United Guaranty to Arch Capital Group on Dec. 31, 2016, the companies announced Tuesday morning. The sale, which was previously announced in August, represented a change in plan for AIG. Earlier in the year, AIG said that it planned to take United Guaranty public, but decided to sell instead after receiving blowback from activist investors, according to a report from Bloomberg. In a release, AIG President and CEO Peter Hancock said the company is “pleased” to finalize the sale of United Guaranty. “With this transaction, AIG has taken another...
Pence, Hensarling: Dismantling Dodd-Frank remains a high priority
It’s been a busy first week in office for President Donald Trump, with executive orders on immigration, energy, trade, health care, and more being handed down daily. But executive orders are just the preamble to the big initiatives that Trump and the Republican majority in Congress are expected to push for shortly. Chief among those is the “dismantling” of the Dodd-Frank Wall Street Reform Act. During the presidential transition, Trump’s transition team stated that dismantling Dodd-Frank would be one of the president’s main priorities. And on Thursday, the American public got a reminder that the president and his party plan...
Trump to Order Dodd-Frank Review, Halt Obama Fiduciary Rule
By Justin Sink, Elizabeth Dexheimer, and Katherine Chiglinsky President Donald Trump will order a sweeping review of the Dodd-Frank Act rules enacted in response to the 2008 financial crisis, a White House official said, signing an executive action Friday designed to significantly scale back the regulatory system put in place in 2010. Trump also will halt another of former President Barack Obama’s regulations, hated by the financial industry, that requires advisers on retirement accounts to work in the best interests of their clients. Trump’s order will give the new administration time to review the change, known as the fiduciary rule....
Trump Treasury pick: Fannie Mae and Freddie Mac will be privatized
After President-elect Donald Trump announced that he selected Steve Mnuchin, a former executive at Goldman Sachs and former chairman of OneWest Bank, to lead the Department of the Treasury, Mnuchin began making the media rounds with Wilbur Ross, Trump’s choice to lead the Department of Commerce. One of Mnuchin and Ross’ first stops was with Fox Business, and during an interview with Maria Bartiromo, Mnuchin dropped a bombshell about the future of Fannie Mae and Freddie Mac. Rather than be wound down, as some including another rumored choice to lead the Treasury, Rep. Jeb Hensarling, advocate for, Mnuchin said the...
Taking a break from the housing sessions that ran through the morning, attendees at the Housing America’s Families Forum in Dallas at the George W. Bush Presidential Library on Friday gathered for a light lunch and to listen to one of the most eagerly anticipated speakers for the day, House Financial Services Committee Chairman Rep. Jeb Hensarling. As a republican representative for the Dallas area, Hensarling didn’t have to travel too far for the event and even quipped about needing to get home to do some stuff for his wife. But before heading back home, Hensarling shared his hope for...
Three GSE shareholders have filed a lawsuit against the Federal Housing Finance Agency (FHFA) and the U.S. Department of Treasury over the sweeping of GSE profits into Treasury, or the Net Worth Sweep. GSE shareholders J. Patrick Collins, Marcus J. Liotta, and William H. Hitchcock filed their complaint in the U.S. District Court for the Southern District of Texas, Houston Division, claiming the Net Worth Sweep is illegal and not authorized by the Housing and Economic Recovery Act (HERA) of 2008. The plaintiffs are reportedly seeking billions of dollars in damages. “We are pleased to have brought this important suit,...
$106 million non-performing loan portfolio hits the market
Buyers looking to acquire a pool of non-performing loans have that opportunity, as a $106 million pool of non-performing loans is now on the market, according to MountainView, which is acting as the exclusive advisor for the sale. Per details provided by MountainView, the NPL pool consists of 641 loans that carry an unpaid principal balance of $106,825,324. The loans carry a broker price opinion of $96,441,220. Of the 641 loans in the pool, 85% are for single-family residential properties. According to MountainView, the top states in the NPL pool are New Jersey (18%), New York (11%), Florida (8%), Maryland...
Mark Zandi is the Chief Economist with Moody’s Analytics, where he directs economic research. His broad research interests encompass macroeconomics, financial markets and public policy. His recent research has focused on mortgage finance reform and the determinants of mortgage foreclosure and personal bankruptcy. Zandi frequently testifies before Congress on topics including the economic outlook, the nation’s daunting fiscal challenges, the merits of fiscal stimulus, financial regulatory reform, and foreclosure mitigation. In March, Zandi and several housing policy experts (Jim Parrott, Gene Sperling, Lewis Ranieri, and Barry Zigas) wrote a white paper containing a proposal to replace the GSEs with a...
FHFA Seeking $13 Billion From RBS in Mortgage-Backed Securities Suit
By Brian Honea Royal Bank of Scotland (RBS) may have to pay as much as $13 billion in a mortgage-backed securities lawsuit filed by the Federal Housing Finance Agency (FHFA), according to multiple media reports. FHFA made a filing in the U.S. District Court in Connecticut in late June seeking $13 billion in damages, according to a report from Bloomberg. RBS was one of 18 lenders sued by the FHFA in 2011 to recoup U.S. taxpayer costs following the government’s $187.5 billion bailout of Fannie Mae and Freddie Mac in 2008. The lawsuit against RBS in the Connecticut court involved...
Freddie Mac’s Portfolio Expands for Fifth Straight Month, This Time by $4.5 Billion
By Brian Honea Freddie Mac‘s total mortgage portfolio expanded at an annualized rate of 2.8 percent in June, marking the fifth consecutive month and the 10th time in the last 12 months the portfolio has grown, according to Freddie Mac’s June 2015 Monthly Volume Summary released on Wednesday. The serious delinquency rate on Freddie Mac-backed single-family residential mortgage loans fell by another 5 basis points from May to June, down to 1.53 percent–virtually the same as the 1.52 percent serious delinquency rate reported for Freddie Mac-guaranteed loans in November 2008 at the start of the financial crisis. Freddie Mac’s serious...
Fannie Mae and Freddie Mac Are Turning Up Efforts to Sell Non-Performing Loans
By Brian Honea As they promised earlier this year, Fannie Mae andFreddie Mac have intensified their efforts in the last few months to rid their single-family residential mortgage portfolios of deeply delinquent, non-performing loans (NPLs). On Thursday, Freddie Mac announced it ismarketing a bundle of NPLs with $1.2 billion in aggregate unpaid principal balance, the largest NPL sale to date. It is Freddie Mac’s sixth NPL sale of the year and the seventh overall; the first occurred last year in July. Including yesterday’s NPL transaction, Freddie Mac has offered nearly $4 billion worth of NPL sales over the last 13...
Selling distressed loans to investors significantly cuts foreclosure rates
Despite skepticism by many advocates, the Federal Housing Administration (FHA) and Fannie Mae and Freddie Mac (the government-sponsored enterprises, or GSEs) increasing rely on auctioning off severely delinquent mortgages to private investors to dispose of these distressed assets. In January, we showed that sales of distressed or nonperforming loans (NPLs) have been effective from the borrowers’ and taxpayers’ perspectives, but these conclusions were based on limited data. Over the past few weeks, the FHA and the GSEs’ regulator, the Federal Housing Finance Agency (FHFA), have released new, more complete data, which allow us to confirm that this program significantly cuts...
Done deal: AIG finalizes sale of United Guaranty to Arch Capital Group
American International Group officially closed the sale of its mortgage-guaranty unit United Guaranty to Arch Capital Group on Dec. 31, 2016, the companies announced Tuesday morning. The sale, which was previously announced in August, represented a change in plan for AIG. Earlier in the year, AIG said that it planned to take United Guaranty public, but decided to sell instead after receiving blowback from activist investors, according to a report from Bloomberg. In a release, AIG President and CEO Peter Hancock said the company is “pleased” to finalize the sale of United Guaranty. “With this transaction, AIG has taken another...
Pence, Hensarling: Dismantling Dodd-Frank remains a high priority
It’s been a busy first week in office for President Donald Trump, with executive orders on immigration, energy, trade, health care, and more being handed down daily. But executive orders are just the preamble to the big initiatives that Trump and the Republican majority in Congress are expected to push for shortly. Chief among those is the “dismantling” of the Dodd-Frank Wall Street Reform Act. During the presidential transition, Trump’s transition team stated that dismantling Dodd-Frank would be one of the president’s main priorities. And on Thursday, the American public got a reminder that the president and his party plan...
Trump to Order Dodd-Frank Review, Halt Obama Fiduciary Rule
By Justin Sink, Elizabeth Dexheimer, and Katherine Chiglinsky President Donald Trump will order a sweeping review of the Dodd-Frank Act rules enacted in response to the 2008 financial crisis, a White House official said, signing an executive action Friday designed to significantly scale back the regulatory system put in place in 2010. Trump also will halt another of former President Barack Obama’s regulations, hated by the financial industry, that requires advisers on retirement accounts to work in the best interests of their clients. Trump’s order will give the new administration time to review the change, known as the fiduciary rule....
Trump Treasury pick: Fannie Mae and Freddie Mac will be privatized
After President-elect Donald Trump announced that he selected Steve Mnuchin, a former executive at Goldman Sachs and former chairman of OneWest Bank, to lead the Department of the Treasury, Mnuchin began making the media rounds with Wilbur Ross, Trump’s choice to lead the Department of Commerce. One of Mnuchin and Ross’ first stops was with Fox Business, and during an interview with Maria Bartiromo, Mnuchin dropped a bombshell about the future of Fannie Mae and Freddie Mac. Rather than be wound down, as some including another rumored choice to lead the Treasury, Rep. Jeb Hensarling, advocate for, Mnuchin said the...
Taking a break from the housing sessions that ran through the morning, attendees at the Housing America’s Families Forum in Dallas at the George W. Bush Presidential Library on Friday gathered for a light lunch and to listen to one of the most eagerly anticipated speakers for the day, House Financial Services Committee Chairman Rep. Jeb Hensarling. As a republican representative for the Dallas area, Hensarling didn’t have to travel too far for the event and even quipped about needing to get home to do some stuff for his wife. But before heading back home, Hensarling shared his hope for...
Three GSE shareholders have filed a lawsuit against the Federal Housing Finance Agency (FHFA) and the U.S. Department of Treasury over the sweeping of GSE profits into Treasury, or the Net Worth Sweep. GSE shareholders J. Patrick Collins, Marcus J. Liotta, and William H. Hitchcock filed their complaint in the U.S. District Court for the Southern District of Texas, Houston Division, claiming the Net Worth Sweep is illegal and not authorized by the Housing and Economic Recovery Act (HERA) of 2008. The plaintiffs are reportedly seeking billions of dollars in damages. “We are pleased to have brought this important suit,...
$106 million non-performing loan portfolio hits the market
Buyers looking to acquire a pool of non-performing loans have that opportunity, as a $106 million pool of non-performing loans is now on the market, according to MountainView, which is acting as the exclusive advisor for the sale. Per details provided by MountainView, the NPL pool consists of 641 loans that carry an unpaid principal balance of $106,825,324. The loans carry a broker price opinion of $96,441,220. Of the 641 loans in the pool, 85% are for single-family residential properties. According to MountainView, the top states in the NPL pool are New Jersey (18%), New York (11%), Florida (8%), Maryland...
Mark Zandi is the Chief Economist with Moody’s Analytics, where he directs economic research. His broad research interests encompass macroeconomics, financial markets and public policy. His recent research has focused on mortgage finance reform and the determinants of mortgage foreclosure and personal bankruptcy. Zandi frequently testifies before Congress on topics including the economic outlook, the nation’s daunting fiscal challenges, the merits of fiscal stimulus, financial regulatory reform, and foreclosure mitigation. In March, Zandi and several housing policy experts (Jim Parrott, Gene Sperling, Lewis Ranieri, and Barry Zigas) wrote a white paper containing a proposal to replace the GSEs with a...
FHFA Seeking $13 Billion From RBS in Mortgage-Backed Securities Suit
By Brian Honea Royal Bank of Scotland (RBS) may have to pay as much as $13 billion in a mortgage-backed securities lawsuit filed by the Federal Housing Finance Agency (FHFA), according to multiple media reports. FHFA made a filing in the U.S. District Court in Connecticut in late June seeking $13 billion in damages, according to a report from Bloomberg. RBS was one of 18 lenders sued by the FHFA in 2011 to recoup U.S. taxpayer costs following the government’s $187.5 billion bailout of Fannie Mae and Freddie Mac in 2008. The lawsuit against RBS in the Connecticut court involved...
Freddie Mac’s Portfolio Expands for Fifth Straight Month, This Time by $4.5 Billion
By Brian Honea Freddie Mac‘s total mortgage portfolio expanded at an annualized rate of 2.8 percent in June, marking the fifth consecutive month and the 10th time in the last 12 months the portfolio has grown, according to Freddie Mac’s June 2015 Monthly Volume Summary released on Wednesday. The serious delinquency rate on Freddie Mac-backed single-family residential mortgage loans fell by another 5 basis points from May to June, down to 1.53 percent–virtually the same as the 1.52 percent serious delinquency rate reported for Freddie Mac-guaranteed loans in November 2008 at the start of the financial crisis. Freddie Mac’s serious...
Fannie Mae and Freddie Mac Are Turning Up Efforts to Sell Non-Performing Loans
By Brian Honea As they promised earlier this year, Fannie Mae andFreddie Mac have intensified their efforts in the last few months to rid their single-family residential mortgage portfolios of deeply delinquent, non-performing loans (NPLs). On Thursday, Freddie Mac announced it ismarketing a bundle of NPLs with $1.2 billion in aggregate unpaid principal balance, the largest NPL sale to date. It is Freddie Mac’s sixth NPL sale of the year and the seventh overall; the first occurred last year in July. Including yesterday’s NPL transaction, Freddie Mac has offered nearly $4 billion worth of NPL sales over the last 13...
