Sen. Corker Introduces GSE ‘Wind Down’ Bill

Mortgage & Real Estate

Sen. Bob Corker, R-Tenn., Wednesday introduced legislation that would reduce Fannie Mae and Freddie Mac’s share of the mortgage market by “at least 10%” per year.

The bill also calls for a reduction in the credit guarantee the GSEs provide MBS investors to 90%. This 10% haircut on timely payment of interest and principal on their mortgage-backed securities would go into effect six months after enactment of the Corker bill.

“We are no closer to transitioning Fannie Mae and Freddie Mac off government life support than the day the firms were taken under direct government control in 2008,” Sen. Corker said.

The Tennessee senator wants his bill to be a “marker,” starting the legislative process to gradually reduce the GSEs’ footprint over a 10-year period .

The Senate Banking Committee member also joined Sen. Kay Hagan, D-N.C. in sponsoring a bill to create a covered bond market in the U.S.

Covered bonds are common in Europe and Canada. They can be collateralized by mortgages, consumer loans and other assets.

“The U.S. lags behind its global peers in the development of a covered bond market because we lack a legislative framework for issuers and investors,” Sen. Hagan said. “With a legislative framework in place, U.S. financial institutions will have a powerful tool that can be used to fund loans to small businesses and households.”

Senators Chuck Schumer, D-N.Y. and Mike Crapo, R- Idaho, also are co-sponsoring the covered bond bill.

It is modeled after a similar covered bond bill in the House sponsored by Reps. Scott Garrett, R-N.J., and Carolyn Maloney, D-N.Y.

Daily Briefing | Wednesday, November 9, 2011

  • E-Sign Coming to FHA Docs, 4506-T in 2012, Says MBA

    The Federal Housing Administration and Internal Revenue Service will begin allowing electronic signatures on FHA loan documents and the 4506-T form in 2012, according to the Mortgage Bankers Association.

  • GSE ‘Bonus’ Bill Wants All Employees on a Federal Pay Scale

    The House Financial Services Committee is slated to vote next Tuesday (Nov. 15) on a bill that would suspend the compensation packages of top Fannie Mae and Freddie Mac executives.

  • Micro, Macro Economic Pressures Bring Serious Delinquency Rate Up

    TransUnion data show a trend of progressive, six-quarter improvement in the performance of borrowers 60 days or more past due reversed in the third quarter, increasing the national mortgage delinquency rate from 5.82% in the previous quarter to 5.88%.

  • Ginnie Mae Profit Almost Doubles in FY 2011

    Ginnie Mae reported a $1.2 billion profit from its secondary market operations in fiscal year 2011 — up 84% from FY 2010 — due to lower loss provisioning.

  • Industry Groups Want More Testing on New GFE Form

    The Consumer Financial Protection Bureau is close to completing its redesign of the Good Faith Estimate form that home buyers receive after applying for a mortgage — but some industry groups believe the agency needs to test the disclosures on real loans.

  • Ally Contemplating Bankruptcy for Residential Unit?

    Ally Financial Inc. is actively considering putting its ailing Residential Capital Corp. mortgage lending unit into bankruptcy, according to a report from Dow Jones.

  • MarketAxess Finds Nonagency RMBS/CMBS Launch Draws Interest

    MarketAxess, a U.S. and European fixed-income electronic trading platform, has made an initial foray into U.S. nonagency residential and commercial mortgage-backed securities markets that appears to be drawing some interest.

  • Residential Applications Spike as Rates Continue to Fall

    Mortgage applications jumped 10.3% for the week ending Nov. 4, a sign that continued low interest rates are starting to entice consumers, according to new figures compiled by the Mortgage Bankers Association.

  • FHA Hires Huntoon Paige President to Head Multifamily

    The Federal Housing Administration confirmed that it has hired a new multifamily director and a new chief risk officer.

  • MetLife Targets Ag Mortgage Business

    MetLife has originated over $1.6 billion in agricultural mortgages in the first nine months of 2011. It provides mortgage loans on farms, ranches, timberland and agribusiness facilities throughout North America.

  • Settlement Odds in Killinger Case Now Higher

    A judge has given the Federal Deposit Insurance Corp. and former executives at Washington Mutual Bank until yearend to settle civil charges related to the thrift’s 2008 failure, raising the likelihood of an out-of-court resolution.

  • Wells Fargo Develops New Home Financing Website

    The nation’s largest mortgage lender has launched a new home lending website to assist people toward achieving sustainable home ownership.

  • REIT Staves Off Liquidation

    Presidential Realty, a real estate investment trust based in White Plains, N.Y., has terminated its plan of liquidation and instead entered into a strategic transaction where affiliates of Signature Community Investment Group acquired a significant interest in the company.

Leave a Reply