Mind-Blowing News from the FHFA by Addison Wiggin originally appeared in the Daily Reckoning.
The upcoming FHFA suits are seeking reimbursement for losses on the securities sold to Fannie and Freddie.
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Add to that list the mounting pressure on the FHFA and the fuzzy fate of the GSEs.
By pooling the properties, the FHFA hopes it can move these homes off the federal books in bulk.
The announcement came in remarks from FHFA Acting Director Edward DeMarco, to the National Association of Business Economics.
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Therefore, through these lawsuits, FHFA turns to the courts to adjudicate the violations that it has alleged in its complaints.
The FHFA filed separate lawsuits against 17 global financial giants, including Barclays, JPMorgan Chase, Goldman Sachs and Citigroup.
There are other things like FHA, FHFA, which oversee Fannie and Freddie.
In August 2012, a federal district court judge in California ruled against the FHFA. Read my post on the ruling here.
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The FHFA reckons the number of beneficiaries could rise by about 1m.
The FHFA has raised other concerns beyond the cost of such write-downs.
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The FHFA numbers also strip out the top end of the market, where there are reasons to think that prices will stabilise more quickly.
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The FHFA can appeal, and a higher court might need to resolve contrary PACE decisions in New York courts, according to Elkind.
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That might seem perplexing, since the Treasury is covering their losses, but the FHFA had stood by its legal obligation to minimise losses to taxpayers.
Buried down in the FHFA plan to restructure the GSEs, from February, was a proposal to essentially unleash multifamily financing solely to the private sector.
The Obama administration has argued strongly in favor of the FHFA adopting the principal-reduction program for Fannie and Freddie, saying it would provide more sustainable loan modifications.
WSJ: Data Show Fannie, Freddie Savings From Debt Forgiveness
The FHFA last fall announced a sweeping revision of HARP guidelines, including eliminating a previous cap that limited the program to borrowers who owed up to 125% of their current property value.
WSJ: Data Show Fannie, Freddie Savings From Debt Forgiveness
Local governments across the country either scuttled or chose not to offer residential PACE programs after the Federal Housing Finance Agency (FHFA) ruled, in July 2010, it would not underwrite mortgages on homes with PACE liens.
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"FHFA's determination to direct each company to delist does not constitute any reflection on either's current performance or future direction, nor does delisting imply any other findings or determination on the part of FHFA as regulator or conservator, " said FHFA Acting Director Edward J.
Last month, I directed my economic team to work with the Federal Housing Finance Agency -- or FHFA -- and their partners in the housing industry to identify barriers to refinancing, knock those barriers down, and explore every option available to help many American homeowners to refinance.
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On August 9, a federal district court judge in California ruled (PDF) that the Federal Housing Finance Agency (FHFA) violated federal law when it decided, without public notice or opportunity for stakeholders to comment, in July 2010, not to underwrite mortgages on homes with property assessed clean energy (PACE) loans.
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In its role as conservator of Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSE) that have been kept afloat with billions of taxpayer dollars since 2008, the FHFA noted that it has not filed suit against every issuer, nor on every private label mortgage-backed security (PLS) purchased by one of the GSEs.
It is important to repeat that the editorial omits the key point, that it was exactly in that period that the House Financial Services Committee, that I chair, passed and helped pass through the House a bill that embodied the reforms asked for by the Bush administration, and that was the basis for Secretary Paulson's and FHFA Director James Lockhart's recent actions.
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