(This
will be a very brief blog, as I head off for a week at the beach with my wife,
oldest son and his wife, and 5 grandkids, two of which are from west coast son
#2 and his wife.)
My Fourth of July Declaration
Going forward I want to reiterate my support for the GSEs staying prominent
in the nation’s mortgage finance system— albeit not as heavily handcuffed—based
on my heavy interaction with financial service interests and regulators
while working on the Hill, at the Home
Loan Bank System, the Fed, as well as my two decades with
Fannie.
Simply put, if properly regulated, F&F represent the
best model for the nation’s consumers and the many
finance professionals in the mortgage finance system.
Those experiences reinforced my belief the pre-conservatorship
F&F secondary mortgage model—hands down--produced the most efficient,
effective, equitable, and fair system for consumers and major commercial mortgage
market participants.
At bottom, it’s the GSEs informal but real regulatory function
(won’t accept loans which don’t meet their tough underwriting requirements
which discourages their creation) combined—when they had them—with their profit
incentive.
Their public mission--when combined with profit for achieving it produced--the ideals which are paramount for risk/reward necessities.
The fact that F&F, in turn, today are tightly regulated by the
FHFA, gives a belt and today suspenders approach to the way GSEs should be
overseen.
Looking ahead, simply stated, rather than disrupt and crush the
mortgage GSEs, the federal government and Congress should recognize their value
and strengths and re-enforce them.
We’ll see.
Major News of the Past
Week—NYT
The leader is the New York Times’ request to Judge Margasret Sweeney
to open the depositions of Ed DeMarco and Mario Ugoletti to the public.
The paper’s high profile position adds to all of the rumors
associated with the depos and the suggestion of possible conflict with
previously understood circumstances, some created by those very gentleman in
their official capacities at head of the FHFA (DeMarco) and a senior Treasury
official working on the “Third Amendment” (Ugoletti).
Judge Sweeney already gave Treasury two weeks to respond to
a similar demand from the Fairholme lawyers.
Here’s hoping the Times financial columnist, Gretchen Morgenson,
gets her journalistic hands on the material, since her column about the
original government slow walking and obfuscation brought huge attention to DoJ and Treasury hijinks
in the “Third Amendment” court cases, when she exposed it in her weekly column
about three months ago.
(See the NYT request
story from Inside the GSEs, a
publication in the Inside Mortgage
Finance Group, Guy Cecala
publisher.)
New York Times Pushes for Access to FHFA Testimony
The New York Times Company filed a motion
this week and is intervening in a case to have
access to
testimony pertaining to Edward DeMarco, former
acting director of the Federal Housing Finance
Agency, stating the government has failed to
show
good cause for sealing the documents.
DeMacro, along with Mario Ugoletti, are both
witnesses in the Fair Holmes Funds v. The
United
States case and each testified in May.
Ugoletti was a senior official with the
Department of Treasury during the government
bailout
of the GSEs and is now special advisor to FHFA
Director Mel Watt.
The plaintiff in the case, Fairholme Funds,
moved
to have the “Protected Information” designation
revoked or to have the redacted versions of the
transcripts de-designated.
The New York Times argues that it has a right to
intervene as a news organization on behalf of
the
public to access documents that arose from
discovery.
Court documents stated that every circuit court
that has considered the question has come to the
conclusion that nonparties may permissively
intervene
for the purpose of challenging confidentiality
orders.
In the motion, The New York Times said
that the
party seeking a protective order has the burden
of
showing that good cause exists for issuance of
that
order.
But it added that it is equally apparent that
the
obverse also is true, i.e., if good cause is not
shown,
the discovery materials in question should not
receive
judicial protection and therefore would be open
to the
public for inspection.
“The public’s interest in the underlying facts
of
this case is undeniable,” the motion stated.
“The government should not be able to hide from
the public, voters and taxpayers, the facts that
were
central to the decisions that the government
made as
part of the far-reaching effort to safeguard the
U.S.
economy.”
The court motion goes on to say that by
providing
access to the evidence, the public will be able
to better
understand the government’s decision.
Here Comes Tim Howard,
the real one!
Former Fannie Mae CFO Tim Howard will file an amicus brief on
Monday, July 6, in support of Perry Capital, plaintiffs asking for review of
Judge Lamberth’s original decision to dismiss Perry claims.
One of the principal arguments made in the Perry appeal was that
in dismissing the case, Lamberth relied on a factual record that was both
incomplete and improperly supplemented by assertions made by the government
with no opportunity for response by the plaintiffs.
I’m told Howard’s brief will highlight facts relating to Fannie
Mae’s and Freddie Mac's conservatorship
and subsequent treatment that are highly relevant to the case but were either
misrepresented or ignored in the factual record put forth by the
government.
(Shhh. He’s saying our
government sometimes distorts and sometimes lies!!)
What Others Are Saying
Inside Mortgage
Finance’s John Bancroft reports on
Fannie/Freddie second quarter business volumes.
By John Bancroft
Fannie Mae and Freddie Mac saw a robust 22.3 percent
increase in their single-family business during the second quarter of 2015,
according to a new Inside Mortgage Finance ranking and analysis.
The two government-sponsored enterprises issued a combined
$232.36 billion of single-family MBS during the second quarter. It was their
strongest quarterly production level since the third quarter of 2013, and it
lifted year-to-date issuance 55.8 percent above the volume generated during
the first half of 2014.
However, at $422.28 billion in MBS issuance for the first
half of the year, the GSEs would have to see a huge gain over the next six
months to break the $1 trillion mark for all of 2015.
__________________________________________________________________________
|
A Welcome, New Voice
Enters the GSE fray
Rep. Eva Clayton (D-NC.) has some advice for the
White House and her former North Carolina congressional colleague, Mel Watt, in
a Huffington Post column
__________________________________________________________
Jeb Bush says the Stars
and Bars is a “Racist” standard.
__________________________________________
Logan Beirne in the National
Law Review
_________________________________________
Maloni, 7-4-2015
2 comments:
Thanks for the post. Very nice.
Didn't William Isaac -ex FIDC chairman- also filed an amicus brief supporting Perry? Or was it supporting Fairholme?
Just got back form our vacation and saw your question.
You are correct, Bill Isaac did file an amicus as part of a group of four people (one brief), the ICBA, the Association of Mortgage Investors and Robert Hartheimer, I believe.
The brief was prepared by Tom Vartanian, a former General Counsel at the old Home Loan Bank Board and more recently a lawyer involved in a variety of financial services matters.
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