A high ranking Democrat on the House Financial Services Committee wants to explore ways of recouping the cost of placing the government-sponsored enterprises into conservatorships.
"As our housing markets begin to stabilize, we will begin to consider innovative ideas for recovering the costs resulting from the decision to place Fannie Mae and Freddie Mac into conservatorship," said Rep. Paul Kanjorski, D-Pa.
"Twenty years ago, we found a way for industry to pay back the sizable U.S. Treasury payments for resolving the savings-and-loan crisis. We can do it again," he said.
The bailout of Fannie and Freddie has already cost the Treasury Department $150 billion which is close to what the government paid to save the S&L industry in the late 1980s. The problem with Fannie and Freddie is that their losses are continuing with no end in sight. (Both will report 2Q earnings in a few weeks.)
To reduce the government cost of the S&L bailout, Congress turned to the Federal Home Loan Bank System, requiring them to pay $300 million annually to cover the interest payments on $30 billion of government issued bonds. The proceeds were used to resolve hundreds of failed S&Ls with the FDIC selling off their assets to the highest bidder.
Daily Briefing | Wednesday, September 8, 2010
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MBA Asks FHFA for Assurances on GSE Servicing Rights
The Mortgage Bankers Association is asking the Federal Housing Finance Agency to assure lenders that their servicing contracts with the GSEs will not be repudiated in the event of their liquidation by the government.
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Mortgage Applications Fall but Purchase Business Rises
Residential loan applications fell by 1.5% on a seasonally adjusted basis last week, but there was a slight improvement in new purchase money loans, according to figures compiled by the Mortgage Bankers Association.
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New Hard Money Trade Group States Priorities
A new trade group that caters to the 'hard money' segment of the mortgage industry has drafted a code of ethics for its members — lenders that are privately held and cater to borrowers who can't get credit elsewhere.
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BDO Hires CRE Expert with Chapter 11 Experience
BDO Seidman has brought on Richard Hauer, a commercial property workout professional, to assist the New York consulting firm's bankruptcy and restructuring professionals on all real estate-related issues.
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Vendor Product Designed to Spot Debt Changes by Borrowers
CoreLogic Credco has unveiled a new product called the LQ GAP report, which is designed to help residential lenders comply with Fannie Mae's 'Loan Quality Initiative' by identifying and summarizing any changes in an applicant's credit report between pre-approval and pre-funding.
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HUD Distributes $1B in Foreclosure Aid
The Department of Housing and Urban Development Wednesday awarded an additional $1 billion of funding to states and counties, earmarking the money for fighting the damage caused in certain neighborhoods by home foreclosures.
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Fiserv Changes Name on Servicing Platform
Fiserv this week rebranded its multiple product loan servicing platform, calling it LoanServ.
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Fed Beige Book: Home Sales Stink
The Federal Reserve, in its new 'Beige Book' report, says U.S. home sales are in the tank again with "evidence of very low or declining" interest from consumers in buying a house.
