Ex-Fannie Mae CEO testifies in $1 billion mortgage trial of Nomura, RBS

By Nate Raymond

NEW YORK (Reuters) – Former Fannie Mae FNMA.OB CEO Daniel Mudd testified on Tuesday in a $1 billion civil trial over losses the company suffered on mortgage-backed securities and said it did not predict the severe decline in U.S. housing prices during the financial crisis.

Mudd appeared in Manhattan federal court after being subpoenaed by Nomura Holdings Inc 8604.T and Royal Bank of Scotland Group Plc RBS.L to testify in a trial pursued by Fannie’s conservator, the Federal Housing Finance Agency.

His testimony came as the defense sought to show that any losses Fannie Mae and Freddie Mac suffered on the $2 billion in securities at issue were caused not by any false statements the banks made but by the collapse in the housing market.

Mudd, who left Fannie Mae in 2008 following its government takeover, told a lawyer for Nomura that macroeconomic factors, including housing prices, were among the factors that could have an impact on those investments.

Asked if Fannie Mae had been able to predict the housing market decline, Mudd said the company’s predictions “undershot” what ultimately took place.

“Did anyone at Fannie Mae when you were CEO predict the depth and extent of the housing price decline in the United States?” asked David Tulchin, a lawyer for Nomura.

“Not to my knowledge,” Mudd said.

The case is the first to reach trial of 18 lawsuits the regulator filed in 2011 over some $200 billion in mortgage-backed securities that various banks sold Fannie Mae and Freddie Mac.

The FHFA, which is seeking $1.1 billion in the trial, previously obtained nearly $17.9 billion in settlements with banks, including Bank of America Corp BAC.N, JPMorgan Chase JPM.N and Deutsche Bank DBKGn.DE.

Those deals followed a series of adverse rulings by U.S. District Judge Denise Cote, who is overseeing the non-jury trial.

The FHFA says of the loans underlying the $2 billion in securities Fannie and Freddie bought from Nomura, 68.6 percent had underwriting defects. Nomura, the deals’ sponsor, and RBS, which underwrote three of the seven, deny wrongdoing.

After leaving Fannie Mae, Mudd became chief executive of hedge fund Fortress Investment Group LLCFIG.N.

But he resigned in 2012 after the U.S. Securities and Exchange Commission accused Mudd and two other Fannie Mae executives of misleading investors about the company’s exposure to risky mortgages. That lawsuit remains pending.

The case is Federal Housing Finance Agency v Nomura Holding America Inc, U.S. District Court, Southern District of New York, No. 11-06201.

(Reporting by Nate Raymond in New York; Editing by Dan Grebler)

Ex-Fannie Mae CEO testifies in $1 bln mortgage trial of Nomura, RBS

By Nate Raymond

NEW YORK (Reuters) – Former Fannie Mae (FNMA.OB) CEO Daniel Mudd testified on Tuesday in a $1 billion civil trial over losses the company suffered on mortgage-backed securities and said it did not predict the severe decline in U.S. housing prices during the financial crisis.

Mudd appeared in Manhattan federal court after being subpoenaed by Nomura Holdings Inc and Royal Bank of Scotland Group Plc (RBS.L) to testify in a trial pursued by Fannie’s conservator, the Federal Housing Finance Agency.

His testimony came as the defense sought to show that any losses Fannie Mae and Freddie Mac suffered on the $2 billion in securities at issue were caused not by any false statements the banks made but by the collapse in the housing market.

Mudd, who left Fannie Mae in 2008 following its government takeover, told a lawyer for Nomura that macroeconomic factors, including housing prices, were among the factors that could have an impact on those investments.

Asked if Fannie Mae had been able to predict the housing market decline, Mudd said the company’s predictions “undershot” what ultimately took place.

“Did anyone at Fannie Mae when you were CEO predict the depth and extent of the housing price decline in the United States?” asked David Tulchin, a lawyer for Nomura.

“Not to my knowledge,” Mudd said.

The case is the first to reach trial of 18 lawsuits the regulator filed in 2011 over some $200 billion in mortgage-backed securities that various banks sold Fannie Mae and Freddie Mac.

The FHFA, which is seeking $1.1 billion in the trial, previously obtained nearly $17.9 billion in settlements with banks, including Bank of America Corp (BAC.N), JPMorgan Chase (JPM.N) and Deutsche Bank (DBKGn.DE).

Those deals followed a series of adverse rulings by U.S. District Judge Denise Cote, who is overseeing the non-jury trial.

The FHFA says of the loans underlying the $2 billion in securities Fannie and Freddie bought from Nomura, 68.6 percent had underwriting defects. Nomura, the deals’ sponsor, and RBS, which underwrote three of the seven, deny wrongdoing.

After leaving Fannie Mae, Mudd became chief executive of hedge fund Fortress Investment Group LLC(FIG.N).

But he resigned in 2012 after the U.S. Securities and Exchange Commission accused Mudd and two other Fannie Mae executives of misleading investors about the company’s exposure to risky mortgages. That lawsuit remains pending.

The case is Federal Housing Finance Agency v Nomura Holding America Inc, U.S. District Court, Southern District of New York, No. 11-06201.

(Reporting by Nate Raymond in New York; Editing by Dan Grebler)

Fannie, Freddie $10B MSR Portfolio Up for Sale

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A Freddie Mac and Fannie Mae mortgage servicing rights portfolio with approximately $10 billion of unpaid principal balance is now on the market.

Nearly one-quarter of the portfolio’s mortgages are located in California, while 12% are in Colorado and 7% are in Washington. The average loan size is $232,719 with an average loan age of 24 months.

The portfolio, which has a low delinquency rate, features an average FICO score of 763, an average loan-to-value ratio of 75%, and an average interest rate is 3.82%.

“This portfolio gives buyers a rare opportunity to buy a large amount of discount and par rate servicing,” said Robert Wellerstein, managing director at MountainView Servicing Group.

Bids for the portfolio, which includes 100% fixed-rate and first-lien products, are due by April 13.

MountainView Servicing Group, who is advising this transaction, said the undisclosed bank wants to retain servicing on the mortgages through a sale with a subservicing agreement but will consider a traditional sale.

Pending home sales point to hopeful sign for housing

Colder than average temperatures and heavy snow in much of the U.S. failed to keep February home buyers away. Signed contracts to buy existing homes rose 3.1 percent from January, according to the National Association of Realtors (NAR).

The Realtors’ so-called “Pending Home Sales Index” is 12 percent higher than one year ago, and is at its highest level since June, 2013.

The gains were primarily driven by sales in the West and Midwest. Pending sales jumped 11.6 percent month-to-month in the Midwest and are now 13.8 percent higher than a year ago. Sales in the Northeast fell 2.3 percent but are 4.1 percent above a year ago. Sales in the South decreased 1.4 percent sequentially, but are 10.8 percent above last February. Sales in the West climbed 6.6 percent and are now 18.3 percent above a year ago.

“Pending sales showed solid gains last month, driven by a steadily-improving labor market, mortgage rates hovering around 4 percent and the likelihood of more renters looking to hedge against increasing rents,” said Lawrence Yun, chief economist for the NAR. “These factors bode well for the prospect of an uptick in sales in coming months. However, the underlying obstacle-especially for first-time buyers-continues to be the depressed level of homes available for sale.”

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Higher prices and tight supply continue to hamstring the market. Total housing inventory at the end of the month was slightly lower than February of 2014, and new listings are not coming on a nearly the pace needed to meet demand. Closed February sales of existing homes, which represent contracts signed in December and January, improved only slightly, up 1.2 percent month-to-month. Home builders have also not ramped up production, citing still tight credit for construction loans and rising prices for land in the best locations.

“Many are now facing lot shortages,” said Stephen Paul of Maryland-based Mid-Atlantic Builders. “Public [builders] are buying more land direct and squeezing out the traditional land developer margins. That is causing more builders to have to develop their own lots, for which they may not have the resources or expertise.”

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The Realtors predict total existing-homes sales in 2015 to be around 5.25 million, an increase of 6.4 percent from 2014. They also predict the national median existing-home price for all of this year to increase around 5.6 percent. In 2014, existing-home sales declined 2.9 percent and prices rose 5.7 percent.

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February’s Pending Home Sales Hit Highest Level Since June 2013, Says NAR

The number of contracts signed to buy previously-owned homes in February hit the highest level since June 2013, thanks to big leaps in the Midwestern and Western regions, the National Association of Realtors said Monday.

NAR’s Pending Home Sales Index, which tracks contract signings (as opposed to closed sales), rose 3.1% in February to 106.9, from a downwardly revised January level of 103.7. (An index of 100 represents an average level of contract activity.) That level was 12% higher than in February 2014, when the index stood at 95.4, and marks the sixth consecutive month of year-over-year gains. February’s index is at its highest level since June 2013, when the measure stood at 109.4, and surpassed expectations of economists surveyed by Bloomberg ahead of the release.

“Pending sales showed solid gains last month, driven by a steadily-improving labor market, mortgage rates hovering around 4% and the likelihood of more renters looking to hedge against increasing rents,” said Lawrence Yun, NAR’s chief economist. “These factors bode well for the prospect of an uptick in sales in coming months. However, the underlying obstacle – especially for first-time buyers – continues to be the depressed level of homes available for sale.”

A separate report from NAR showed that the share of first-time home buyers increased to 29% in February from 28% in January, marking the first increase since November 2014.

Yun also said that inventory is tighter at the lower end of the market, where first-time home buyers tend to purchase.

February’s index read continues a shift in the market that began last September. Before that month, contract signings had been down on a year-over-year basis since September 2013, as quickly rising prices slowed the pace at which Americans were purchasing homes. As price gains slowed down and investors exited the market, contract signings have crept up.

Overall, the housing reports released in March show a market that is stabilizing. Though construction starts fell a dramatic 17% in February compared to January, they were just 3.3% below February 2014 groundbreakings, according to Commerce, and can be largely blamed on unusually harsh winter weather. A report last week showed sales of previously-owned homes up 1.2% in February as supply remains tight and prices rise. Tomorrow we’ll get the latest data on sales prices for previously-owned homes in January; at this point we know that prices for previously-owned homes continued to slow down in December (the most recent data available from SP/Case-Shiller) carrying on a nearly year-long streak of slow-downs.

The rising number of contracts for previously-owned homes suggests that as prices moderate, consumers are getting back into the buying game. Today’s pending home sales report is considered a more timely pulse of the market than other reports because it is forward-looking, based on contracts signed rather than closed transactions. (Closings generally come one to two months after a contract is signed.) The biggest pressure for buyers appears to be tighter inventory, which is helping to keep prices on the rise. 

The national median sales price for existing, or previously-owned, homes for 2014 rose 5.7% to $208,100. That level of price appreciation is much steadier than the rapid, 11.5% gain for 2013. In 2015, NAR expects the national median existing-home prices to rise about 5%.

Total existing-home sales for 2015 are forecast to be around 5.25 million, or about 6.4% above 2014. Last year sales finished 2.9% below 2013 levels (5.1 million) at 4.94 million, while prices rose 5.7%.

Pending contracts for existing-homes varied by region in February, with gains in the Midwest and West offset by declines in the Northeast and South. The index tracking pending contracts in the Northeast fell 2.3% in February from January, while the Southern index declined by 1.4%. Meanwhile, the Western region’s index climbed 6.6% in February to its highest level since June 2013, as the Midwest index jumped 11.6% in February.

On a year-over-year basis, all regions of the United States increased contract signings in February: the Northeast by 4.1%, South by 10.8%, Midwest by 13.8%, and West by 18.3%.

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Pending Sales of U.S. Homes Rose More Than Forecast in February

(Bloomberg) — More Americans than forecast signed contracts to purchase previously owned homes in February, indicating a pickup in the housing market ahead of the spring selling season.

The index of pending sales increased 3.1 percent to 106.9, the highest since June 2013, after a 1.2 percent gain the prior month that was smaller than initially estimated, figures from the National Association of Realtors showed Monday in Washington. The median forecast of 35 economists surveyed by Bloomberg called for a 0.3 percent rise.

Employment gains and rising rents encouraged buyers to take advantage of cheap borrowing costs in February even as some contended with frigid weather. Stronger wage growth and an increase in the number of homes for sale would help provide an additional boost for the market this spring, when buying interest typically heats up.

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“Pending sales showed solid gains last month, driven by a steadily improving labor market, mortgage rates hovering around 4 percent and the likelihood of more renters looking to hedge against increasing rents,” Lawrence Yun, the NAR’s chief economist, said in a statement. “These factors bode well for the prospect of an uptick in sales in coming months.”

Estimates in the Bloomberg survey ranged from a 5 percent decline to a 2 percent increase. The Realtors’ group revised the January data from a previously reported 1.7 percent increase.

Two of four regions saw an increase, reflecting an 11.6 percent jump in the Midwest and a 6.6 percent gain in the West, the report showed. Pending sales fell 2.3 percent in the Northeast and 1.4 percent in South.

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Last Year

The index increased 12 percent on an unadjusted basis versus a year earlier, after a 6.1 percent gain in the prior 12-month period. It was projected to climb 8.7 percent, according to the Bloomberg survey median.

A reading of 100 in the pending sales index corresponds to the average level of contract activity in 2001, or “historically healthy” home-buying traffic, according to the NAR.

Economists consider pending sales a leading indicator because it tracks contract signings, as opposed to purchases of existing homes, which are tabulated when a deal closes, typically a month or two later.

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The latter makes up more than 90 percent of the housing market. Re-sales rose 1.2 percent in February to a 4.88 million annual rate, the NAR said March 23.

A report from the Commerce Department on March 24 showed new-home sales, which account for about 7 percent of the residential market, unexpectedly rose in February to a seven-year high. New-home sales are also tabulated when contracts are signed, indicating the market strengthened during the month.

To contact the reporter on this story: Nina Glinski in Washington at nglinski@bloomberg.net

To contact the editors responsible for this story: Carlos Torres at ctorres2@bloomberg.net Vince Golle

More from Bloomberg.com

National Association of Realtors Sees Slow Uptake of .realtor Domains

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Registrations for .realtor domain names have declined, but the low level of interest could point to larger issues with how generic top-level domains are being created and marketed to consumers.

More than four months after the National Association of Realtors (NAR) announced that it would offer its members .realtor top-level domains, few Realtors have taken advantage of the exclusive perk.

NAR instituted the .realtor domain benefit, along with a variety of extras, in the hopes that it would set apart its licensed real estate agents and provide them with professional clout.

“When consumers visit a .realtor website they will know that they have reached a source of comprehensive and accurate real estate information, as well as someone with unparalleled insight into the local market,” NAR President Steve Brown said in a statement last August.

However, the number of .realtor domain-name registrations has plateaued at about 95,000 since they first became available, far below the 500,000 personalized domains that the organization had planned to offer.

A poll conducted by Inman last year indicated that more than eight out of 10 readers of the real estate news site planned to apply for their own .realtor domains, suggesting that, in theory, 800,000 new websites could have been registered.

NAR has a ways to go before it reaches anywhere near that number. At the current rate of registration—around 60 registrations per day, according to Inman—it would take NAR 18 years to give away its 500,000 .realtor domain names, according to nTLDstats data.

Part of the problem could lie in the restrictions that NAR places on the use of these top-level domains, according to Inman. Users must follow NAR’s business rules [PDF] in registering domain names, limiting their creative options.

And the .realtor name and concept don’t appeal to everyone. Last fall, Inman contributor Teresa Boardman wrote a column, “Why I Don’t Want To Be a .Realtor”, in which she argued that “[t]he domain names are more about real estate, not about me.”

“I never wanted to be part of a big national company,” Boardman explained. “I always wanted to be the local real estate agent helping others in the community.”

Despite the lull in .realtor registrations, NAR remains optimistic that the offer will entice more members. NAR Spokeswoman Sara Wiskerchen told Inman that the association is “pleased with the number of .realtor registrations, which are going well and higher than expected.

“We anticipated continued and steady growth after the initial rush of registrations, and believe that ongoing education and launching association and brokerage domains in the near future will keep .realtor front and center,” she added.

Top-Level Troubles

And it’s not just NAR that’s struggling to make its personalized domain names attractive to consumers; .realtor is only one name drowning in a sea of top-level domains that have yet to gain significant traction online.

One of the major issues is compatibility with existing devices and software. The Internet Corporation for Assigned Names and Numbers (ICANN) is scrambling to adapt to the deluge of generic top-level domains cropping up online, from .pizza to .lol, Forbes reports.

“New types of domains and email addresses break stuff,” Brent London, Google’s representative in an ICANN working group, said at a meeting of the organization, according to Forbes. “Just to send an email from one person to another, you’d find yourself in a situation where an operating system, mail servers, routers, mail service providers, security software, all need to work properly.”

Speaking at the domain-names industry conference NamesCon 2015, Akram Atallah, former chief operating officer of ICANN and current president of its global domains division, explained the roadblocks preventing generic top-level domains from flourishing.

“New [gTLD] registries are still trying to find their footing,” Atallah said, according to The Register. “We are seeing a lot of new entrants.”

Additionally, big brands are also waiting on the sidelines for others to get in on the domain-name game. Generic top-level domains are a complicated new territory to navigate, and businesses may be hesitant to be pioneers of this form of digital marketing.

“This is a new way of doing things online so it’s mostly a competitive issue: A lot of them are sitting around the pool waiting for the first one to jump in,” Atallah said, as reported in The Register.

For now, all that associations can do is be patient as the technical difficulties and marketing challenges of top-level domains are ironed out. It could be awhile before .ninja is as wholly embraced as .com or .org.

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Julia Haskins is a contributor to Associations Now. More »

Pending Home Sales Jump 3% in February

The National Association of Realtors (NAR) on Monday morning released its data on pending sales of existing homes for February. The pending home sales index rose 3.1% from a slightly downwardly revised index reading of 103.7 in January to the February reading of 106.9. That is 12% higher than in February 2014, when the index reading was 95.4. The February reading is the highest since June 2013 and marks the sixth consecutive month of year-over-year gains, with each month’s gain higher than the previous month’s.

The consensus estimate called for a month-over-month increase of 0.3% in pending sales. The index reflects signed contracts, not sales closings. An index reading of 100 equals the average level of contract signings during 2001. The index has been above 100 (the “average” reading) for 10 straight months.

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The NAR’s chief economist noted:

Pending sales showed solid gains last month, driven by a steadily-improving labor market, mortgage rates hovering around 4 percent and the likelihood of more renters looking to hedge against increasing rents. These factors bode well for the prospect of an uptick in sales in coming months. However, the underlying obstacle — especially for first-time buyers — continues to be the depressed level of homes available for sale.

Strong sales in the NAR’s Midwest and West regions more than outweighed smaller declines in the Northeast and South. Sales in the Midwest rose 11.6% to an index level of 110.4. West region sales climbed 6.6% to 102.1. Sales in the Northeast region slipped 2.3% and sales in the South fell 1.4%.

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Fannie Mae recklessness risks future financial crises and taxpayer losses …

Nearly seven years after it was bailed out from the housing market crash, mortgage giant Fannie Mae is still engaging in behavior that could precipitate future financial crises and taxpayer losses, a government watchdog warns in a report to be released Wednesday.

The Federal Housing Finance Agency inspector general said its latest concerns involve Fannie Mae’s “haphazard” decision to fill a critical auditor position with an employee who lacked proper qualifications and suffered from a conflict of interest.

Unless Fannie Mae’s leaders and the audit committee that allowed the hiring do their jobs better, there is a “substantial risk” the mortgage company “will operate in an unsafe and unsound manner, suffer losses and expose U.S. taxpayers to further financial risks,” the inspector general said.

The watchdog also had harsh words for the FHFA, the federal agency that oversees Fannie Mae, saying its own leadership failed to act on concerns about the hiring of the auditor position, choosing instead to stay silent.

Fannie Mae and Freddie Mac are two federally insured mortgage giants that were taken over by the U.S. government in fall 2008 during the height of the U.S. financial crisis, which was caused in part by risky subprime mortgages.

Taxpayers bailed out the two entities in one of the most dramatic government interventions in U.S. market history. FHFA was created as a federal agency to provide better oversight to the two mortgage giants.

The current controversy centers on the Chief Audit Executive (CAE), a critical role at Fannie Mae “tasked with providing independent, objective assurance of the enterprise’s governance, risk management and control processes,” the inspector general reported.

But despite the CAE’s role in determining the financial safety of Fannie Mae’s actions, including what loans to hand out, the company internally hired a manager who didn’t have enough experience to meet the role, falling below the “preferable” level of qualifications for the job.

Though looking for at least 15 years’ experience as an auditor, the manager hired had only seven years’ experience and hadn’t worked as an auditor since 1992, the report said.

Furthermore, before becoming the CAE, the manager had served as the chief credit officer for Fannie Mae’s largest business unit. That presented a major conflict of interest, investigators said, since he was strongly invested in the financial success of the company, which could have clouded his judgment on whether a loan was sound.

The report did not name the manager.

Spokespeople for Fannie Mae did not return reporters’ requests for comment Tuesday.

Peter Morici, an economist and professor at the R.H. Smith School of Business at the University of Maryland, said it was “absolutely ridiculous” for Fannie Mae to be hiring its own managers as auditors “when there’s such a large pool [of] talent out there available for this.”

It is “good old-fashioned Latin American corruption,” said Mr. Morici, who also is a frequent columnist for The Washington Times and other publications. “They’re going to inspect their own work, their friends and supervisors. It’s just not what you do. It’s like having the students write and grade their own exams.”

In their report, investigators described the hiring process as “haphazard” and “far from diligent.”

The company’s senior management conducted a review and determined that there were no candidates within Fannie Mae who were “ready now” to become the CAE.

But the Audit Committee that assembled to hire a new CAE ignored the senior management’s conclusions and decided to only consider internal candidates. The audit committee members then hastily assembled a list of potential choices, producing nine names within six days.

Of those nine names, members of the Audit Committee only interviewed three before selecting their hire. The decision seems to have been a largely arbitrary one, as investigators noted “no corporate record that the Audit Committee formally met, either in person or by phone, to discuss the qualifications of the different candidates and to make its selection.”

Federal investigators slammed the Audit Committee, stating there were “significant lapses in corporate governance” and questioning whether the committee “appreciates its governance obligations in this environment.”

The FHFA said it agreed with the inspector general’s report and would ensure that the Audit Committee records and documents all meetings and decisions.

The federal agency also said they would direct Fannie Mae to hire an independent third party to conduct an evaluation of the Audit Committee itself and its effectiveness.

Fannie Mae has been under strict federal control ever since the financial collapse of 2008. The Treasury Department committed an estimated $200 billion to try to fix Fannie Mae — and fellow mortgage company Freddie Mac — under the Troubled Asset Relief Program, or TARP.

In addition to buying up toxic loans and assets handed out by the companies, the FHFA was charged with righting the ship and trying to get the company back on its feet while ensuring it doesn’t engage in risky loan behavior again.

FHFA officials have been slowly trying to wean both companies off government control by gradually restoring to them greater independence.

But Wednesday’s audit represents a sharp rebuke from federal investigators, who questioned whether some of Fannie Mae’s managers are taking their jobs seriously, and whether FHFA was providing adequate oversight in the face of concerns.

“FHFA’s oversight of Fannie Mae’s appointment of a new CAE was ineffective,” the inspector general concluded. “Several senior FHFA officials questioned the robustness of the hiring process among themselves but elected not to discuss those deficiencies with the Audit Committee after being informed of its selection or with the Fannie Mae Board before it approved the selection.”

Fannie Mae Continues Push for MF Sustainability

Fannie Mae headquarters

WASHINGTON, DCFor years, the financial case for sustainability has been strictly one of common sense — but backed up by plenty of rigorous financial studies: by building and maintaining sustainable buildings, the owners and tenants save energy and maintenance costs. Lately, though, the financial incentives have become more direct, thanks to Fannie Mae.

The GSE began offering favorable financing terms for sustainable projects last month and recently closed the first Fannie Mae M-PIRE (Multifamily Property improvements to Reduce Energy) loan for a Bronx rental building

Not surprisingly, the offer of better financing has been of great interest to the community, Chrissa Pagitsas, the director of Fannie Mae’s Multifamily Green Initiative, tells GlobeSt.com. “We have seen an immediate market response to it,” she says.

The program, announced last month, recognizes eight certifications including the USGBC’s LEED program. For qualifying properties, Fannie Mae is offering a 10 basis point interest rate reduction, to 3.9% from 4% on loans for multifamily refinance, acquisition or supplemental mortgage loan. So, on a $10 million dollar loan amortizing over 30 years, the owner would save $95,000 in interest payments over a 10-year term.

Last month it also closed for Greystone the first Fannie Mae M-PIRE loan for $865,000 loan.

The M-PIRE pilot launched in fall of 2013 with three DUS lenders–Wells Fargo, Greystone and Beech Street. The underwriting criteria allows for potential energy savings to be included in the loan, which increases the loan amount, which then funds the improvements in the property. Energy and water costs can account for as much as 20-35% of a property’s operating expenses, Fannie Mae notes.

The Fannie Mae M-PIRE mortgage product is available to affordable and market rate cooperative and conventional rental housing owners in the five boroughs of New York City.

Fannie Mae has been investigating a national product based on the M-PIRE model as well.

Meanwhile, the GSE continues to push its other green initiatives into the multifamily community. Last November the US Environmental Protection Agency announced that 17 apartment and condo buildings were the first existing multifamily housing properties to earn the new ENERGY STAR multifamily certification for superior energy performance. The EPA and Fannie Mae had worked on that designation.

Fannie Mae also continues to add to the industry’s knowledge base about the advantages of green. Last year, for example, it reported that there is a huge gap between the operating costs of energy efficient and inefficient buildings, with the least efficient properties spending $165,000 more in annual energy costs.