Certified Forensic Loan Auditors, LLC

 
  Upcoming Classes

Search CFLA's Article Archive:

Fannie Mae and Freddie Mac: Senate Banking Leaders Reach Deal

valuewalk.com | March 12, 2014

By Michael Ide

US Senators Tim Johnson (D., S.D.) and Mike Crapo (R., Idaho) have made a new proposal for reforming the US mortgage industry that falls in line with last year’s proposal from Bob Corker (R., Tenn.) and Mark Warner (D., Va.), but getting bipartisan support will be a major problem, reports Nick Timiraos for The Wall Street Journal.

The proposal would set up a system of private companies that release a common security, much like Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) currently sell securitized mortgages under the current system. The new common securities would have an explicit government guarantee, but it would only be honored after all of the private companies had failed, forcing private investors to take losses before taxpayer subsidies kick in. According to Crapo this proposal “provides a balance between providing broad access to mortgages while protecting taxpayers from losses.”

“There is near unanimous agreement that our current housing-finance system is not sustainable in the long term,” said Johnson, but the problem isn’t that many other legislators and interest groups want to keep Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) (though some do), it’s that there is very little agreement on what the future system should look like. Conservatives want the government to get out of the secondary mortgage market entirely, while centrists and liberals have different ideas about how far the government should go to encourage affordable home ownership.

Fannie, Freddie have recovered strongly since 2008

The new proposal looks like a final stab at getting rid of the government sponsored enterprises (GSE) that had been maligned during the financial crisis, but have come roaring back to profitability. Aside from the normal legislative inertia that makes reform difficult the further you get from a crisis, it’s hard to argue that Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) should be shut down when they are clearly doing so well. Supporters of the GSEs say that improved underwriting standards and liquidity requirements are all that’s needed to prevent a future taxpayer bailout.
Income sweeps continue without plan for the future

Investors who have purchased senior preferred shares of Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) will be watching the developments closely as they try to force the government to pay out dividends that were promised in 2008 (several lawsuits are underway). The US Treasury Department announced a full income sweep in August 2012 that left no money behind either for paying out dividends or for recapitalizing the two GSEs, leaving them in the awkward position of being slowly unwound while there is still no agreement on what will come next.

Back to March 2014 Archive

CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

SEE BELOW- http://www.certifiedforensicloanauditors.com

Call us toll free at 888-758-2352

Bookmark and Share
spacer
Facebook Like us on Facebook
Twitter Follow us on Twitter
YouTube View our YouTube Videos
LinkedIn Connect to us on Linkedin
 
BBB Logo

 

spacer
Contact us or view our Sample Documents & Audits by completing the form below.

  • Reload
  • Should be Empty:




 

DVD Sets Only $99

 

FREE Mortgage Fraud Analysis

 

Order Cutting-Edge Services Now

 

Quiet Title Packages from Licensed Attorneys

 

Affiliate Services

 

CFLA Sponsored Attorney Links

 

Take-Home Education Package