Consumer Financial Services Law Blog
Dykema Gossett PLLC
Dykema Gossett PLLC

Consumer Financial Services Law Blog

Consumer Financial Services Law Blog

News and analysis regarding Consumer Financial Services litigation and regulation, and activities of the Consumer Financial Protection Bureau

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Showing 3 posts in Fannie Mae.

Fannie Mae, Freddie Mac Respond to California’s Residential PACE Fund

In response to the explosion of new residential Property Assessed Clean Energy programs (PACE programs) instituted by a number of counties in California, Fannie Mae and Freddie Mac have each issued a reminder re-emphasizing the position of the Federal Housing Finance Agency (FHFA) regarding first-lien mortgage loans to be sold to Fannie Mae and Freddie Mac.   Read More ›

Challenges To Freddie Mac and Fannie Mae’s Ability to Foreclose by Advertisement under the United States Constitution

Over the past several months, one of the newer arguments challenging foreclosure by borrowers is that Fannie Mae and Freddie Mac are government actors, and therefore, they may not foreclose by advertisement because doing so violates borrowers’ due process rights under the Fifth Amendment.  As our readers are aware, on September 6, 2008, the Director of the Federal Housing Finance Agency (FHFA) placed Fannie Mae and Freddie Mac into conservatorships.  As Conservator, FHFA “immediately succeed[ed]” by operation of law to “all rights, titles, powers, and privileges of [Fannie Mae]” and was empowered to “take over the assets of and operate [Fannie Mae] with all the powers of the shareholders, the directors, and the officers of [Fannie Mae] and conduct all business of the regulated entity,” and to “perform all functions of [Fannie Mae] in [Fannie Mae’s] name.”  12 U.S.C 4617(b)(2)(B).  Essentially, borrowers argue that Fannie Mae and Freddie Mac are subject to constitutional claims as a government actor because they were placed into conservatorship by the FHFA.   Read More ›

FHFA Limits Fannie and Freddie to “Qualified Loans”: Another Strike Against Non-Qualified Loans and the Consumers Who Rely on Them

In January, the CFPB issued its final Qualified Mortgage Rule (QMR) creating a safe harbor for lenders from liability for loans that meet its criteria for a “qualified mortgage.” The Federal Housing Finance Authority (FHFA) has endorsed this Rule by barring Fannie Mae and Freddie Mac from purchasing non-qualified mortgages. This means that, beginning in January 2014 when the QRM takes effect, Fannie and Freddie will no longer be permitted to purchase: (i) loans with terms over 30 years, (ii) interest-only loans; (iii) negative amortization or ballooning principal loans; or (iv) loans with points and fees exceeding the thresholds set by the CFPB. The one exception the FHFA made is for loans that meet Fannie’s and Freddie’s underwriting and delivery standards. According to the FHFA, the “[a]doption of these new limitations by Fannie Mae and Freddie Mac is in keeping with FHFA’s goal of gradually contracting their market footprint and protecting borrowers and taxpayers.” These limitations also add to the growing number of disincentives for lenders to offer non-qualifying loans, which could constrict access to credit for those who may need it the most.  Read More ›