CAI is working to ensure that residents of community associations have access to fair and affordable mortgages through our engagement with federal agencies on reform of Government Sponsored Enterprises (GSEs). Government sponsored entities such as Fannie Mae and Freddie Mac have been important actors in ensuring the flow of capital into the mortgage finance system, ensuring the availability of affordable financing for homebuyers for over a generation.
The federal government has decided to end the role of Fannie Mae and Freddie Mac in the housing finance system. This will impact the availability of mortgage financing and the cost of obtaining a mortgage as the functions of Fannie Mae and Freddie Mac are turned over to private sector entities. GSE reform will impact the ability of the market place to attract financing for Americans to purchase homes.
GSE Reform FAQ
CAI actions to date:
CAI Testifies Before Congress on Impact of Foreclosure Crisis on Associations (5/2012) Mr. Dick Pruess, long-time CAI member and chair of California’s Legislative Action Committee, told federal lawmakers that association homeowners suffer when lenders delay foreclosures, allowing delinquent owners to remain in their properties.
The U.S. House of Representatives Financial Services Committee asked CAI to testify on a plan to sell real estate owned (REO) held by mortgage giants Fannie Mae and Freddie Mac to private investors. The federal agency that oversees Fannie Mae and Freddie Mac is testing a program that will sell large numbers of REO to investors who must agree to rent the properties for a minimum of three years. CAI was asked to share how bulk sales of Fannie Mae and Freddie Mac REO would impact community associations and homeowners. Read more...
Federal Reserve Issues Guidance to Banks on REO Rentals (4/2012) On April 5, the Federal Reserve System issued guidance to banks intended to spur the temporary conversion of Real Estate Owned (REO) to rental property. Earlier this year, the Federal Reserve strongly encouraged the sale of REO to investors for use as rental properties. With this new guidance, the Federal Reserve is offering banks the option to keep ownership of REO properties while making the properties available for rent. The Federal Reserve’s REO rental guidance will impact CAI’s members in two general areas. Read more…
CAI Urges Community Association Perspective in Bulk Sales of HUD, Fannie Mae, and Freddie Mac Properties (4/2012) Many believe the answer to the national foreclosure crisis lies in bulk sales of foreclosed properties to investors for use as rental properties. Outspoken supporters of this approach include Federal Reserve Chairman Ben Bernanke and Mark Zandi, Chief Economist and founder of Moody’s Analytics. These efforts have culminated in the launch of a pilot program for bulk sales of Fannie Mae and Freddie Mac owned properties to investor syndicates. Read more...
CAI Prods Mortgage Loan Servicers on Assessment Delinquencies (2/2012) On February 23rd, CAI wrote the U.S. Department of Justice, the U.S. Department of Housing and Urban Development, and the Iowa Attorney General, urging that mortgage servicers be required to pay association assessments on real estate owned (REO) and properties in foreclosure. On February 9th, the federal government and 49 states agreed to a nationwide settlement on foreclosure violations by mortgage servicing companies. Read more…
House Democrats Urge Replacement of Fannie, Freddie Regulator (1/2012) A group of House Democrats is urging President Obama to use his recess appointment authority to name a new director of the Federal Housing Finance Agency (FHFA). FHFA has been led by Acting Director Edward DeMarco for two years.
The Democratic lawmakers wrote, “FHFA has consistently and erroneously interpreted its mandate far too narrowly and as such has failed to take adequate action to help homeowners…” As conservator of Fannie Mae and Freddie Mac, FHFA has directed the companies to offer assistance to troubled borrowers, but has not permitted these programs to reduce principal balances on mortgages. Read More...
Freddie Mac Extends Loan Payment Flexibility to Long-Term Unemployed (1/2012) Beginning February 1st, companies servicing mortgages owned by Freddie Mac may offer unemployed borrowers having trouble making payments on their mortgage up to 12 months of loan forbearance.
Freddie Mac servicers may offer unemployed borrowers 6 months loan forbearance at their discretion as a means to prevent the loan from moving into foreclosure due to a loss of income as a result of unemployment. However, servicers must seek approval from Freddie Mac prior to extending a borrower the maximum 12 months forbearance. Read more...
CAI Applauds Administration Guidance of GSE Foreclosures (1/2012) In a letter dated January 6, 2012, CAI has thanked the Office of the Comptroller of the Currency (OCC) for guidance to banks and federal savings associations on their responsibilities in foreclosure. That guidance, embodied in OCC Bulletin 2011-49, provides notice that lenders who foreclose are responsible for payment of community association assessments. CAI survey data indicates that more than three out of four bank-owned properties do not pay required assessments, putting strain on the rest of the homeowners in the community. You can read CAI's letter here.
Congress to Increase Fees on Fannie Mae, Freddie Mac, and FHA (12/2011) The Congress has opted to increase fees for Fannie Mae, Freddie Mac and FHA to pay for a reduction in the payroll tax. As part of an economic stimulation package, the Obama Administration ushered in a reduction in employee payroll taxes. The temporary reduction is set to expire on December 31st unless Congress votes to approve an extension. Read More...
Subcommittee on Capital Markets & GSEs Moves Housing Finance Bill (12/2011) On December 14th, the House Financial Services Subcommittee on Capital Markets voted 18 – 15 to advance the Private Mortgage Markets Investment Act (PMMIA) of 2011. The proposal will next be considered by the House Financial Services Committee. Read More...
CAI Engages White House on Mortgage Issues: (8/2010)
CAI has engaged the White House on critical issues affecting the future of mortgage financing. Responding to a request for information from the White House, CAI, through its Federal Affairs Task Force, submitted comments on how the evolving federal requirements for mortgage qualification are affecting the more than 60 million residents of community associations. The comments also provided feedback on proposals to overhaul the entire federal mortgage finance system. Read more ...
Protecting Fannie and Freddie (9/08)
FHFA establishes a single regulator for GSEs and the Federal Home Loan Banks.