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Freddie Mac Drowns in Red; CEO Layton says Lenders need to Lower Down Payment

November 4th, 2015 Comments off

donald_layton__ceo_freddie_mac__housingwire__creditOn the news of Freddie Mac reporting a net loss of $475 million for the third quarter of 2015, significantly down from the net income of $4.2 billion for the same quarter 2014—the first time in four years– MHProNews has learned from housingwire that Freddie Mac CEO Donald Layton is suggesting lenders lower their down payment when writing mortgages. He says that would help the GSE increase access to credit for possible homeowners.

Referring to the loss, Layton, calling it “accounting noise,” said the real economics going on is that lenders are not fully exploiting the three percent down payment mortgages that Freddie will now bundle and securitize. He said mortgage lenders are unduly afraid of representation and warrants claims, but in fact, that activity has declined, he noted.

He did describe the loss thusly: “This $0.5 billion loss was caused mainly by the accounting associated with our use of derivatives, whereby the derivatives are marked to market but many of the assets and liabilities being hedged are not. He added, We’re sampling performing loans earlier to test for defect in manufacturing. All this is designed to have lenders feel more comfortable.

Freddie’s net worth is $1.3 billion, and it has repaid $96.5 billion to taxpayers and received $71.3 billion from the Treasury.

Federal Housing Finance Agency Director Mel Watt, noting the decrease was not a decline in credit quality or an increase in credit losses, said as the GSEs transfer credit risk away from the taxpayer to the private sector, their revenues will of necessity decline.

A U. S. Treasury official who says the loss is not indicative of a weakness, stated, “The prospect of any material losses by the GSEs is another reminder that comprehensive housing finance reform is necessary. Taxpayers remain on the hook for losses incurred by the GSEs, whether through the capital buffer or the ongoing, $258 billion backstop under the PSPAs.

Suggesting this could be the first shot in a return to the housing crisis, Rep. Ed Royce (R-CA) has introduced legislation to limit the pay of GSE CEOs. He said, “Losses like this combined with multimillion dollar CEO salaries at the GSEs are the warning shots of a return to the pre-crisis model of private gains and public losses that wrecked the economy. We can’t simply put the blinders on and say that Fannie and Freddie are just like other companies when taxpayers are on the hook if they go in the red.

His bill would limit compensation to $600,000 instead of the $3 million proffered by the FHFA earlier this year.

Meanwhile, Freddie’s comprehensive loss for Q3 2015 was $501 million, as compared to comprehensive income of $3.9 billion for Q2 2015. Freddie’s single-family rental business’ purchase climbed to $90 billion, a 50 percent increase compared to the same period 2014. ##

(Photo credit: housingwire–Freddie Mac CEO Donald Layton)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

Sunday Morning Recap June 14, 2015 to June 20, 2015

June 21st, 2015 Comments off

Sunday_morning_recapIn manufactured housing news, UMH planning MHC as other MHCs closing, programs help MH buyers, MHC sells for $98k per homesite, Texas reports MH sales. In modular news, Magnolia Homes may be revived, Brad Pitt moves mods to Indian Rez, Mods house Irish homeless, micro mods go urban. In company news, Skyline stock on roller coaster, Cavco likely to get tax abatement, insider trading at Patrick. Meth lab clean-up in MH disputed. More……

Saturday, June 20, 2014

Pilot Program will Provide Energy Efficient Manufactured Homes in DE

Friday, June 19

UMH Properties Alters Plans from Modular to a Manufactured Home Community

Program will Assist Buyers of Manufactured Homes

Skyline Corp. Rises up, Falls Down all Week Long

Texas Reports Sale of Manufactured Homes

Public Hearing Follows Cavco’s Request for Tax Abatement

Gendell Unloads more of Patrick Stock

Thursday, June 18

Ohio Measure would Require Community Owners to Clean up Meth Labs

Skyline Corp. Continues its Roller Coaster Run, while the Nasdaq Hits a New High

While Home Starts Fall, Housing Permits Rise in May

Concordis Developing Micro Modular Units in Urban Settings

Modular Builder Magnolia Homes may be Rescued

Reservations for Induction Dinner Ahead of Last Year

Wednesday, June 17

Florida’s The Villages Expanding Continuum of Care for Seniors

Liberty Homes Plummets, Nobility Homes Rises, MHCV Slips

Residents of Closing Manufactured Home Community have Concerns Addressed

Davis Homes in NC Offers Paths to Manufactured Home Ownership through USDA

Rep. Ed Royce Questions HUD Sec. Julian Castro

Modular Homes Destined for Homeless in Dublin

Tuesday, June 16

Modular Builder Hires Pete Murray as President

Skyline Corp. Spikes; Donald Trump Running for President, Yikes!

More Insider Trading at Drew Industries

Fire Fee in Florida Disproportionately Affects Manufactured Home Residents

Canadian Group Protests Closing of Manufactured Home Community for Senior Facility

Manufactured Homes Planned for Durango, but More could be Justified

Monday, June 15

High End Manufactured Home Community Sells for $13.8 M

MHCV Advances 6th Straight Day, while Dow Falls over 100 Points 2nd Straight Day

Builders of Single-family Homes see Brighter Days

Brad Pitt’s Foundation Installing Modular Homes for Fort Peck Indians

Michigan has New Member on Manufactured Housing Commission ##

(Image credit: MHProNews.)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

 

CFPB Director Cordray Grilled at House Financial Services Committee Hearing

January 28th, 2014 Comments off

Consumer Financial Protection Bureau (CFPB) Director Richard Cordray received criticism during a hearing Tue., Jan 28 from the Chairman of the House Financial Services Committee, Jeb Hensarling, (R-TX), who said his committee is already hearing negative feedback from consumers regarding the Qualified Mortgage rule which went into effect Jan. 10. While QM has been well received in some mortgage circles, like the Mortgage Bankers Association (MBA), Rep. Steve Pearce says manufactured housing (MH) has been left out of the equation, and that 50 percent of the houses in New Mexico are manufactured homes.

Noting that most of the lenders have quit dealing with manufactured homes altogether in NM, and 25 percent have quit lending to the housing market totally, he told Cordray, “In your attempt to protect the small guys, you are limiting access to credit.”

Cordray acknowledged the importance of MH to a certain segment of the population, that it presents special difficulties because of issues pertaining to the land on which the home is located, but that small lenders and credit unions can continue to make loans that historically have been successful. “In terms of lending, they have carte blanche, because we trust them on the lending they do,” Cordray said. He added the agency will continue to analyze data and adjust rules based on that information, according to mninews.com.

The CFPB is also working with the Federal Housing Finance Agency (FHFA) to collect data on millions of mortgages to streamline the system, MHProNews.com has learned. Rep. Ed Royce, noting Target’s security breach in Dec., expressed concern about collecting credit information on 50 million people. Rep. Sean Duffy said, “I am specifically interested in testimony in regard to the data collection at the CFPB, specifically the extent of the information that is being collected on the American people and to the extent of the disclosure you get to collect and monitor on their financial transactions.” Saying there is already a lot of information available in the homeowner market, Cordray said, “In order to make judgments and to get it right we have to get information to get it right.”

(Photo credits: above, Rep. Jeb Hensarling, wikipedia; below, Richard Cordray, abcnews)