Fix for Mortgage Giants Fannie Mae, Freddie Mac Returns to Back Burner

Mortgage-finance giants Fannie Mae and Freddie Mac, which have been under government control since the financial crisis, don’t appear to be getting a new life as quickly as some had hoped might happen under a Trump presidency.

Overhauling the two companies remains a back-burner issue for the Trump administration and Congress, crowded out by matters such as taxes, immigration and flood insurance. Moreover, prospects that the Senate…

Mortgage and banking groups express concern over efforts to derail …

Fifteen mortgage and banking groups expressed concern that there are efforts to derail a comprehensive overhaul of mortgage giants Fannie Mae and Freddie Mac.

The groups on Thursday wrote a letter to Treasury Secretary Steven MnuchinSteven Terner MnuchinOvernight Finance: CBO to release limited analysis of ObamaCare repeal bill | DOJ investigates Equifax stock sales | House weighs tougher rules for banks dealing with North Korea Week ahead in finance: Clock ticking for GOP on tax reform More former classmates of Mnuchin call on him to resign MORE and Mel Watt, director of the Federal Housing Finance Agency, calling on them to help usher through bipartisan legislation in Congress to reform the housing finance system and end government control of the two entities.

“As you both have made clear on numerous occasions, housing finance reform must go through Congress to create stable, sustainable housing markets that best serve our nation’s communities,” the groups wrote in the letter also sent to members on the Senate Banking and House Financial Services committees.

“We fully endorse this point of view, and believe the debate over recapitalizing a broken system distracts from the critical structural issues that Congress must address to ensure that the federally supported secondary market serves key, bipartisan objectives,” they wrote.

The housing and mortgage groups argue that Congress must pass legislation that makes key structural reforms before a decision is made about how Fannie Mae and Freddie Mac will retain capital.

“Allowing Fannie Mae and Freddie Mac to create a capital cushion simply converts a potential future draw on federal funds into an immediate draw and such an action would effectively increase the size of taxpayer exposure to future losses,” they wrote, noting a Congressional Budget Office report from 2016.

There is concern that there’s a push aimed at allowing the government-sponsored enterprises to recapitalize, potentially without congressional approval.

Building capital buffers could further slow already glacial efforts to pass legislation in Congress with the 10-year anniversary of the financial crisis a year away.

The capital buffer is expected to fall to zero next year, meaning that taxpayers would be on the hook for any losses by Fannie Mae and Freddie Mac.

Congress had made several attempts since the 2008 financial crisis to unwind Fannie Mae and Freddie Mac but there has been no agreement on a final plan.

The groups that sent the letter were American Bankers Association; American Land Title Association; Asian American Real Estate Association; Committee on Healthcare Financing; Consumer Bankers Association; Consumer Mortgage Coalition; Habitat for Humanity; Housing Policy Council of the Financial Services Roundtable; Mortgage Bankers Association; National Affordable Housing Management Association; National Association of Hispanic Real Estate Professionals; National Association of Home Builders; National Association of Housing Cooperatives; National Housing Conference; and Real Estate Services Providers Council.

Playing Russian Roulette With The U.S. Housing Finance System

Can Stock Photo

Forcing Fannie Mae and Freddie Mac into another bailout is an irresponsible game of chance.

Last month, Mel Watt, director of the Federal Housing Finance Agency (FHFA), announced that the two mortgage giants, Fannie Mae and Freddie Mac, could require a federal bailout of as much as $100 billion in the event of an economic downturn.

In fact, a bailout of these two institutions is inevitable as early as next year, if not sooner. The need for an emergency draw on the U.S. Treasury Department to fund these agencies, however, will have nothing to do with the financial health of either Fannie Mae or Freddie Mac.

Both agencies are exceptionally well-managed and regulated, and are highly profitable; they reported combined earnings of nearly $10 billion in the first six months of this year. As with the most recent meltdown of the housing market, irresponsible federal housing oversight will be the cause of their failures.

During the buildup to the collapse of the housing market that began in 2007, federal financial regulators ignored the many obvious predatory features of subprime lending and allowed reckless, exploitative, and fraudulent mortgage finance-related practices to permeate the mortgage market.

The result was nearly 8 million foreclosures since 2007, collapse of home prices of more than 30% nationally, and the near implosion of the U.S. financial system.

This time around, federal policy makers have structured bailout terms for Fannie Mae and Freddie Mac that require that all earnings of the two agencies be “swept” directly into the Treasury. Simultaneously, both agencies are required to wind down their capital reserves (savings needed to cover future losses) to zero by the end of this year.

Ironically, the agencies were taken into federal conservatorship because of inadequate capital reserves.

Treating Fannie Mae and Freddie Mac as two large cash cows for federal spending leaves them financially vulnerable to failure. As late as last Thursday, U.S. Treasury Secretary, Steven Mnuchin clarified the Administration’s position to wait until next year to address the capital levels for those agencies.

Next year, economic events, as simple as sharp, yet relatively short-lived, interest rate fluctuations, could again send these two agencies, hat-in-hand, back to the Treasury for another taxpayer handout.

The FHFA has attempted to limit the impact of losses for the two agencies by requiring both institutions to develop new ways to share risks with investors. Those efforts are promising but will be inadequate to offset the inevitable need for a future bailout if Fannie Mae and Freddie Mac have no capital cushion.

The announcement of another housing bailout for Fannie Mae and Freddie Mac, which manage a combined $5 trillion book of business, could unsettle capital markets, further limit access to mortgage credit, and elicit a new round of politically-motivated attacks against these agencies from Congress.


Using Fannie Mae and Freddie Mac earnings for federal spending leaves taxpayers exposed to their future losses.

Playing a game of chance with the nation’s housing finance system would benefit neither households nor the economy. Already, the U.S. housing market is significantly under-performing. In spite of a nearly full one-percentage point bounce in the 2nd Q, 2017, homeownership in the U.S. remains near a 50 year low.

The Urban Institute estimates that more than 6 million loan originations are missing from the mortgage markets between 2009 and 2015, due to unnecessarily rigid underwriting requirements that are driven by fears of future housing market losses.

Young adults and people of color are among those households that are finding it particularly difficult to access homeownership. The homeownership rate for Blacks, for example, is  little changed since  since of the passage of the Fair Housing Act of 1968.

Some powerful Members of Congress believe the federal government should not support the mortgage market. Many politicians have argued that losses by the two government housing agencies justify shuttering them.

Freddie Mac September 2017 Outlook

Chad Wandler

Freddie Mac Announces Pricing of $233 Million Multifamily Small Balance Loan Securitization

MCLEAN, VA, Sep 20, 2017 (Marketwired via COMTEX) — MCLEAN, VA–(Marketwired – Sep 20, 2017) – Freddie Mac (otcqb:FMCC) announces the pricing of the SB38 offering, a multifamily mortgage-backed securitization backed by small balance loans underwritten by Freddie Mac and issued by a third-party trust. The company expects to guarantee approximately $233 million in Multifamily SB Certificates (SB38 Certificates), which are anticipated to settle on or about September 28, 2017. Freddie Mac Small Balance Loans generally range from $1 million to $6 million and are backed by properties with five or more units. This is the thirteenth SB Certificate transaction in 2017.

SB38 Pricing

                          Class   Principal / Notional Amount (mm)   Weighted Average Life (Years)   Spread (bps)   Coupon   Yield   Dollar Price A-5F   $9.208   4.07   S + 35   2.3500%   2.1912%   $100.4977 A-5H   $65.023   4.11   S + 53   2.5300%   2.3738%   $100.4849 A-7F   $16.700   5.40   S + 50   2.5600%   2.4416%   $100.4852 A-7H   $13.655   5.47   S + 70   2.7600%   2.6467%   $100.4608 A-10F   $72.563   7.21   S + 77   2.9200%   2.8309%   $100.4812 A-10H   $55.962   7.32   S + 92   3.0700%   2.9869%   $100.4499 X1   $259.012   5.02   Non-Offered               


Sole lead manager and bookrunner: Wells Fargo Securities, LLC

Co-managers: FTN Financial Capital Markets, J.P. Morgan Securities LLC, Multi-Bank Securities, Inc. and Stifel, Nicolaus Company, Incorporated

105 mortgages originated by Hunt Mortgage Partners, LLC

SB38 Certificates Offering Circular

Small Balance Securitization Investor Presentation

Freddie Mac is guaranteeing six senior principal and interest classes and an interest only class of securities issued by the FRESB 2017-SB38 Mortgage Trust and is also acting as mortgage loan seller and master servicer to the trust. In addition to the seven classes of securities guaranteed by Freddie Mac, the trust will issue certificates consisting of Class B and R Certificates, which will not be guaranteed by Freddie Mac and will be sold to private investors.

The Small Balance Loan (SBL) origination initiative was first announced in October 2014, and expands the company’s continuing effort to better serve less populated markets and provide additional liquidity to smaller apartment properties. Freddie Mac has a specialty network of Seller/Servicers and SBL lenders with extensive experience in this market who source loans across the country.

This announcement is not an offer to sell any securities of Freddie Mac or any other issuer. Offers for any given security are made only through applicable offering circulars and related supplements, which incorporate Freddie Mac’s Annual Report on Form 10-K for the year ended December 31, 2016, filed with the Securities and Exchange Commission (SEC) on February 16, 2017; all other reports Freddie Mac filed with the SEC pursuant to Section 13(a) of the Securities Exchange Act of 1934 (Exchange Act) since December 31, 2016, excluding any information “furnished” to the SEC on Form 8-K; and all documents that Freddie Mac files with the SEC pursuant to Sections 13(a), 13(c) or 14 of the Exchange Act, excluding any information furnished to the SEC on Form 8-K.

Freddie Mac’s press releases sometimes contain forward-looking statements. A description of factors that could cause actual results to differ materially from the expectations expressed in these and other forward-looking statements can be found in the company’s Annual Report on Form 10-K for the year ended December 31, 2016, and its reports on Form 10-Q and Form 8-K, filed with the SEC and available on the Investor Relations page of the company’s Web site at and the SEC’s Web site at

Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders, and taxpayers. Learn more at, Twitter @FreddieMac and Freddie Mac’s blog

MEDIA CONTACT: Christopher Spina 703-388-7031 INVESTOR CONTACT: Robert Koontz 571-382-4082 Aaron Dunn 571-382-5818

� 2017 Nasdaq, Inc. All rights reserved.

U.S. Existing-Home Sales Fall to a One-Year Low After Harvey …

Sales of previously owned U.S. homes declined to a one-year low in August as affordability continued to hamper demand and Hurricane Harvey caused a slump in Houston-area purchases, a National Association of Realtors report showed Wednesday.

Key Takeaways

While decreased purchase activity in Houston helped push down the sales count nationwide, and may continue to do so in coming months, residential real estate is struggling to improve because of declining affordability, NAR said in the report. 

Hurricane Season Takes Its Toll On Home Sales And Builder … – NPR

Electrician Chris Piazza works on a home being built in Destrehan, La., in March. The recent enormous storms have hit the housing industry hard, with several signs turning negative.

Gerald Herbert/AP

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Gerald Herbert/AP

Electrician Chris Piazza works on a home being built in Destrehan, La., in March. The recent enormous storms have hit the housing industry hard, with several signs turning negative.

Gerald Herbert/AP

With Hurricane Maria still smashing up Puerto Rico, the economic costs of this year’s hurricane season continue to grow by the minute. It will take a while for economists to tally it all up.

But this much already is clear: The recent enormous storms have taken a toll on the housing industry.

Three separate industry reports, issued over the past three days, have all shown that rough weather in the South and wildfires in the West have been creating problems for this key economic sector.

On Wednesday, the National Association of Realtors said existing-home sales fell again, down 1.7 percent from July. The decline reflected the ongoing lack of inventory — that is, buyers can’t find enough affordable houses to purchase. But it also showed the impact of Hurricane Harvey, which kept many people from getting to their closings.

At Least 100,000 Homes Were Affected By Harvey. Moving Back In Won't Be Easy

“Some of the South region’s decline in closings can be attributed to the devastation Hurricane Harvey caused to the greater Houston area,” Lawrence Yun, chief economist for the National Association of Realtors, said in a statement. “Sales will be impacted the rest of the year in Houston, as well as in the most severely affected areas in Florida from Hurricane Irma.”

The Realtors’ data followed Tuesday’s Commerce Department report showing that its measure of housing completions fell 10.2 percent in August from the previous month. And in the South, where Hurricane Harvey hit hard in late August, completions were down 22.2 percent. When weather prevents builders from completing projects on time, it hurts profits.

And on Monday, the National Association of Home Builders said its monthly industry survey showed a significant decline in optimism. The trade group’s confidence index dropped to a reading of 64, down 3 points from August, because “the recent hurricanes have intensified our members’ concerns about the availability of labor and the cost of building materials,” Granger MacDonald, the group’s chairman, said in a statement.

After Heavy Damage, Florida Keys Residents Anxiously Wait To Return Home

Still, economists are optimistic about the longer-term outlook for housing because many other factors remain favorable. “With ongoing job creation, economic growth and rising consumer confidence, we should see the housing market continue to recover at a gradual, steady pace throughout the rest of the year,” National Association of Home Builders Chief Economist Robert Dietz said.

Yun agreed that better days will come once the hurricane season ends, saying “nearly all of the lost activity will likely show up in 2018.”

And there’s one other factor that brightens the outlook: Millennials are getting older, paying off student debt and moving into their homebuying years, which is expected to drive demand.

At the end of its meeting Wednesday, the Federal Reserve Board issued a statement on the economy, and it too said that while the hurricanes have been hurting businesses and workers, the impact won’t last. “Storm-related disruptions and rebuilding will affect economic activity in the near term, but past experience suggests that the storms are unlikely to materially alter the course of the national economy over the medium term,” the board said.

How To See If Home Prices Are Rising Or Falling Where You Live

Hackers Targeting Realtors, Homeowners With Email Scams « CBS …

PHILADELPHIA (CBS) — Like most realtors, Kristina Soloviena emails clients all day long. But last year, unknown to her, hackers infiltrated her Gmail account, monitored the correspondence between her and her clients and waited for the perfect time to strike.

“It was time to send the remainder of the down payment to close escrow,” Soloviena said.

Using Solovieva’s email account, the hackers sent a message to one of her clients telling them to wire hundreds of thousands of dollars to a fraudulent  account.

“It’s creepy, uh being watched and knowing they’ve been reading all of our emails,” Soloviena said.

Lawsuit: ICE Detention Center Exploits Immigration Detainees For Labor

The National Association of Realtors and the FBI are now issuing warnings about “sophisticated email scams targeting the real estate industry.”

“It’s a nationwide phenomena, unfortunately,” Matt Fuller of the San Francisco Association of Realtors said.

He warns realtors aren’t the only ones being hacked.

“It can be the agents email,  it can be the title company, it can be a lender — it can be a transaction coordinator,” Fuller said.

The hackers’ goal, he says, is to impersonate someone involved in the real estate transaction.

By sending emails from their account, instructing buyers to wire money, usually when the buyer is expecting to make a payment.

“They’d been watching us all along – and reading all of our correspondence,” Soloviena said.

State Worker Admits To Stealing $75,000 In False Claims

Lucky for Soloviena’s clients, they questioned the fake email and didn’t fall for it.

The National Association of Realtors and the FBI advise everyone buying, or trying to buy real estate to verify any instructions they receive in an email and never wire money unless you are positive the instructions came from a reliable source.

KBRA Assigns Preliminary Ratings to FREMF 2017-K67 and Freddie Mac Structured Pass-Through Certificates K-067

NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of
preliminary ratings to nine classes of FREMF Series 2017-K67 mortgage
pass-through certificates and five classes of Freddie Mac structured
pass-through certificates (SPCs), Series K-067 (see ratings list below).
FREMF Series 2017-K67 is a $1.4 billion CMBS multi-borrower transaction.
Freddie Mac will guarantee six classes of certificates issued in the
underlying Series 2017-K67 securitization and will deposit the
guaranteed underlying certificates into a separate trust that will issue
the SPCs.

The underlying transaction is collateralized by 67 fixed-rate
multifamily mortgage loans. The loans have principal balances that range
from $1.3 million to $132.6 million. The largest exposure is represented
by Crystal Plaza Apartments (9.2%), a 537-unit, Class-B, high-rise
multifamily complex located in Arlington, Virginia, approximately five
miles south of downtown Washington DC. The five largest loans represent
23.5% of the cut-off date balance and also include Pine Hills South
(4.0%), Coral Bay Park Apartments (3.8%), Coral Bay Canyon Apartments
(3.5%), and The Davis Modern Apartment Homes (3.1%). The assets are
located in 25 states, with the three largest concentrations in
California (22.0%), Virginia (10.8%), and Texas (10.5%).

KBRA’s analysis of the underlying transaction incorporated our CMBS
Multi-Borrower rating process that begins with our analysts’ evaluation
of the underlying collateral properties’ financial and operating
performance, which is used to determine KBRA’s estimate of sustainable
net cash flow (KNCF) and KBRA value using our CMBS
Property Evaluation Methodology
. KBRA’s weighted average KNCF
for the portfolio is 3.5% less than the issuer’s NCF. KBRA
capitalization rates were applied to each asset’s KNCF to derive
individual property values that, on an aggregate basis, were 41.4% less
than third party appraisal values. The weighted average KBRA
capitalization rate for the transaction is 8.70%. The KBRA credit model
deploys rent and occupancy stresses, probability of default regressions,
and loss-given default calculations to determine losses for each
collateral loan, which are then used to assign our credit ratings.

For complete details of the analysis, please see our Pre-Sale Report, FREMF
, published today at
The report includes our KBRA Comparative Analytic Tool (KCAT). KCAT is
an easy to use, Excel-based workbook that provides the following

  • KBRA Deal Tape – contains KBRA loan level details for every loan in
    the pool, and the ability for users to input adjustments to KNCF and
    KBRA Cap Rates and see the related impact on key deal metrics.
  • KBRA Credit Metrics Comparison Tool – Enables the user to compare the
    subject transaction to a user-defined transaction comp set.
  • Excel based property cash flow statements for the top 20 loans.

The preliminary ratings are based on information known to KBRA at the
time of this publication. Information received subsequent to this
release could result in the assignment of final ratings that differ from
the preliminary ratings.

Preliminary Ratings Assigned: FREMF 2017-K67














Class Balance (US$)




Expected KBRA Rating




































































































*Notional balance


Preliminary Ratings Assigned: Freddie Mac Structured
Pass-Through Certificates, Series K-067








Class Balance (US$)


Expected KBRA Rating































*Notional balance



Representations Warranties Disclosure

All Nationally Recognized Statistical Rating Organizations are required,
pursuant to SEC Rule 17g-7, to provide a description of a transaction’s
representations, warranties and enforcement mechanisms that are
available to investors when issuing credit ratings. KBRA’s disclosure
for this transaction can be found in the report entitled FREMF
2017-K67 Representations Warranties Disclosure Report

Related Publications: (available


the iOS App

About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a
Nationally Recognized Statistical Rating Organization (NRSRO). In
addition, KBRA is recognized by the National Association of Insurance
Commissioners (NAIC) as a Credit Rating Provider (CRP).

HouseLogic Helps Homeowners Love Their Bathrooms

WASHINGTON, Sept. 19, 2017 /PRNewswire/ — Converting a cramped and crowded bathroom into a spa-like sanctuary is within the reach of every homeowner. This month’s “Stop Hating Your Bath” spotlight from, the comprehensive website for homeowners from the National Association of Realtors®, features seven articles containing information, tips and advice on how homeowners can transform their bathroom from a nightmare to a dream retreat.

Check out the full spotlight at

Is adding a new bathroom worth the hassle? HouseLogic’s infographic can help you decide.

Is adding a new bathroom worth the hassle? HouseLogic’s infographic can help you decide.

Here is HouseLogic’s advice for cleaning less, creating more space and avoiding problems along the way:

Startling Facts About Adding a Bath That Sharp Homeowners Know. Adding another bathroom seems like a no-brainer, right? Not so fast! There are some mitigating factors to consider before starting construction. Look at HouseLogic’s infographic to decide if adding a bathroom is worth the cost and hassle, with considerations like needing to remain in the home for at least five years to recoup the cost.

5 Bathroom Trends You Miiiiight Want to Reconsider. One of the benefits of being a homeowner is having complete control of a home’s design and décor, but some choices may not be worth the trouble. Check out HouseLogic’s list of bathroom remodeling trends that may be more frustrating than fabulous, such as intricately patterned tiny tile mosaics that can be incredibly difficult to keep clean.

4 Must-Haves for the Easiest-to-Clean Bathroom, Ever. Fighting to keep dirt and grime out of the bathroom can feel like a never-ending battle. HouseLogic lays out the essentials for maintaining a spic-and-span bathroom with as little effort as possible, with tips like forgoing tile and instead using grout-free materials.

5 Bathroom Things You’ll Hate If You Install Them. Water, humidity and artificial lighting mean that some building and decorating materials simply do not belong in a bathroom. HouseLogic keeps homeowners from making remodeling mistakes by listing five materials to avoid at all costs, like wallpaper, which could peel off the walls when exposed to shower steam.

Everyone Wants This In Their Bathroom! What a Change It Makes! HouseLogic breaks down everything homeowners need to know about choosing and installing a bathroom exhaust fan.

9 Ah-Ha Hacks the Pros Use to Max Out Bathroom Space. A cluttered bathroom can create chaos in a room that should be a home’s peaceful refuge. HouseLogic spoke with professional organizers and came up with a list of hacks to make the most of the space in even the most cramped bathrooms, such as mounting a second shower rod to hang caddies, towels and loofahs.

6 Foolproof Tips to Dump Your Ugly Tub for a Gorgeous Shower. When a homeowner is sick of stepping over a porcelain hump and doing battle with a shower curtain just to shampoo each morning, it might be time to ditch the tub and put in a spacious walk-in shower. Check out HouseLogic’s tips for turning a bathtub into a shower without making costly mistakes, such as not removing a home’s only bathtub, which most real estate professionals agree is important in preserving a home’s marketability.

For more information on how to make the most of every room in a home, visit

HouseLogic is a free source of information that helps consumers make smart, confident decisions about all aspects of home ownership. Made possible by Realtors®, the site helps owners get the most value and enjoyment from their existing home and helps buyers and sellers make the best deal possible.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

Information about NAR is available at This and other news releases are posted in the “News, Blogs and Videos” tab on the website.  

For further information contact:
Jane Dollinger, 202/383-1042

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SOURCE National Association of Realtors

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