Fannie Mae and Freddie Mac shareholders have filed a class action lawsuit against the U.S. government, alleging that the takeover of the government-sponsored enterprises was illegal and cost them billions, Bloomberg News reported. [more]

Timothy Mayopoulos

Fannie Mae will pay the Treasury Department $58.7 billion in dividends by the end of June, Forbes reported.

The mortgage finance firm recorded $8.1 billion in pre-tax income in the first quarter. Its payment to the feds is enabled by a $50.6 billion valuation allowance on deferred tax assets, the magazine said. Then, the total dividends reimbursing the Treasury for the 2008 bailout will hit $95 billion. Yesterday, Freddie Mac reported a quarterly net income of $4.6 billion and owes a $7 billion dividend to the Treasury. No valuation allowance was announced, Forbes said. [more]

Edward DeMarco and Rep. Melvin Watt

President Barack Obama is expected to tap a North Carolina congressman to lead the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, CNBC reported.

Rep. Melvin Watt, a Democrat and senior member of the House Financial Services Committee, was integral to passing Dodd-Frank, the financial regulatory overhaul enacted in 2010. [more]

Edward DeMarco

The controversial regulator of Fannie Mae and Freddie Mac is urging lawmakers to drastically scale back or even eliminate the mortgage market’s reliance on taxpayers, Bloomberg News reported.

Edward DeMarco is making his push to privatize Fannie and Freddie less than a week after a bipartisan group of Senators introduced a bill to keep the Obama administration from selling off shares in the government-backed lending giants without congressional approval. [more]

From Left: Bob Corker, Mark Warner, David Vitter and Elizabeth Warren

A bipartisan group of lawmakers is looking to keep their colleagues from using Fannie Mae and Freddie Mac to balance the federal budget, according to the Wall Street Journal. Sens. Bob Corker,  Mark Warner, David Vitter and Elizabeth Warren have introduced a bill called the “Jumpstart GSE Reform Act,” which would prevent Congress from using increases in fees charged by Fannie and Freddie to bankroll spending increases or tax cuts…. [more]

Edward DeMarco

The government-backed mortgage giants Fannie Mae and Freddie Mac are abandoning their separate systems for securitizing home loans and are forming a joint company that could be up and running as soon as next year, NBC News reported.

The consolidation is intended to help reduce the government’s role in the mortgage market, according to its regulator, the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, and will regulate the new company as well…. [more]

Even before Hurricane Sandy wreaked havoc in New York, New Jersey and Connecticut, the states were faced with dramatic increases in foreclosures, Bloomberg News reported today.

October default, auction and repossession notices increased 123 percent in New York, 140 percent in New Jersey and 41 percent in Connecticut from a year earlier, according to a RealtyTrac Inc. report cited in the story. Those were the biggest annual gains nationwide. [more]

In the wake of last week’s hurricane, Fannie Mae and Freddie Mac are expanding assistance to those whose properties were destroyed or sustained damage during the storm. Evictions and foreclosures will be suspended for 90 days in storm disaster areas and both Fannie and Freddie gave servicers more leeway to suspend payments, waive late payment fees and provide modifications on loans for owners in storm-stricken areas. [more]

Freddie Mac is continuing a streak. The government-sponsored mortgage backer posted a $2.9 billion third-quarter profit today, which marks the fourth consecutive quarterly gain for the once embattled company, the Wall Street Journal reported.

The third-quarter profit figures stand in stark contrast to the $4.4 billion loss in the third quarter of last year. This year’s profit is the result of stabilizing home prices, stronger housing demand and a low inventory of homes for sale. [more]

Preet Bharara

The U.S. Attorney for the Southern District of New York is suing Bank of America for $1 billion — alleging that the bank defrauded Fannie Mae and Freddie Mac.

The suit alleges that Countrywide Financial, which Bank of America later acquired, administered a loan-origination process which generated thousands of either fraudulent or defective loans that were then sold to Fannie and Freddie. [more]