Fannie, Freddie see profits in third quarter
Government-sponsored mortgage backer Freddie Mac posted a $2.9 billion profit in the third quarter, the Wall Street Journal reported, enabling it to make a dividend payment of $1.8 billion to the U.S. Treasury for its taxpayer-financed bailout. That marks Freddie’s fourth-consecutive quarterly gain, and stands in stark contrast to its loss of $4.4 billion in the third quarter of last year. It’s also the second consecutive quarter in which Freddie has not needed any assistance from the government. Fannie Mae, meanwhile, posted a $1.8 billion profit in the third quarter and paid $2.9 billion in dividends to the Treasury, Reuters reported. The profit compares with a loss of $5.1 billion a year ago. For both GSEs, the gains were prompted by stabilizing home prices and stronger demand for housing. “We continue to see home prices improve again in the third quarter, albeit not nearly at the level they did in the second quarter. That is the single biggest driver in the results,” Susan McFarland, Fannie Mae’s chief financial officer, told Reuters.
Gair to head post-Sandy housing recovery in NYC
In the wake of Superstorm Sandy, Mayor Michael Bloomberg last month appointed Brad Gair, former deputy commissioner at the New York City Office of Emergency Management, as the city’s director of Housing Recovery Operations. Gair’s primary responsibility is to create an inventory of temporary housing for New Yorkers displaced by the storm. Gair previously served as recovery officer for the Federal Emergency Management Agency after the attacks of Sept. 11, according to Newsday.
Feds crack down on mortgage ads
The Consumer Financial Protection Bureau and Federal Trade Commission last month announced a crackdown on mortgage advertisements, the Wall Street Journal reported. The agencies sent out warning letters about problematic ads to dozens of lenders, home builders, advertisers and brokers, and launched investigations in cases that raise more significant concerns. After scrutinizing some 800 mortgage ads, regulators found that some firms with no affiliation to the government added “Government Loan Department” to their return addresses. The regulators said they also found too-good-to-be-true promises of low interest rates and ads that falsely suggested that consumers had been preapproved to receive large sums of cash.
Cuomo: No hurricane deductibles for New Yorkers
The New York State Department of Financial Services informed the insurance industry last month that “hurricane deductibles” would not be triggered by Superstorm Sandy, the Daily News reported. Because the storm did not have sustained hurricane-force winds when it hit in New York, Gov. Andrew Cuomo announced, homeowners will not have to pay hurricane deductibles, which often amount to 1 to 5 percent of a home’s value. The insurance industry in New York is state regulated, Reuters reported, so insurance policy language on hurricane provisions must be approved by the Department of Financial Services. “That is good news for New Yorkers,” New York State Superintendent of Financial Services Benjamin Lawsky told the Daily News. “It means they will have to pay less out of pocket.” But New Yorkers whose homes were flooded by Sandy face larger problems: Homeowners insurance typically covers damage from wind, but not flooding.