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» NEW FHFA INITIATIVE SIMPLIFIES MODIFICATION PROCESS The Federal Housing Finance Agency (FHFA) introduced a new policy to help seriously delinquent borrowers avoid foreclosure. Starting July 1, Fannie Mae and Freddie Mac servicers will lift loan modification barriers by offering eligible borrowers reduced payments without asking for financial or hardship documentation. Through FHFA's Streamlined Modification Initiative, eligible borrowers who are 90 days to 24 months past due will receive a solicitation offer for a trial period plan that lasts three months. The offer letter will include a dollar amount for a new mortgage with a fixed interest rate and a term of 40 years. The initiative also provides principal forbearance for certain borrowers who are underwater. "This new option gives delinquent borrowers another path to avoid foreclosure," said Edward J. DeMarco, FHFA's acting director. "We will still encourage such borrowers to provide documentation to support other modification options that would likely result in additional borrower savings." In order to be eligible, a loan must be owned or guaranteed by Fannie Mae or Freddie Mac and be a first-lien mortgage that is at least 12 months old with a loan-to-value ratio equal to or greater than 80 percent. Delinquent borrowers with second homes or investment properties can also qualify for a no-doc modification. Loans that have been modified twice previously are not eligible. The initiative ends August 1, 2015. STAT INSIGHT 2,262,609 HARP refinances through January 2013. Source: Federal Housing Finance Agency VISIT US ONLINE @ DSNEWS.COM FREDDIE MAC RELEASES SINGLEFAMILY LOAN-LEVEL DATA Freddie Mac increased its efforts to support greater transparency through the release of loan-level data for its single-family mortgages. The dataset includes about 15.7 million fully amortizing 30-year fixed-rate single-family mortgages originated from 1999 to 2011, which represent about 53 percent of the GSE's mortgage acquisitions for that period. Freddie Mac is making the data available under the guidance of its regulator, the Federal Housing Finance Agency (FHFA). Freddie Mac says the data will help investors develop more accurate credit performance models which will pave the way for singlefamily risk-sharing initiatives between the GSEs and private capital. The Single-Family Loan-Level Dataset can be accessed by visiting the Economics & Housing Research page on Freddie Mac's website. The dataset includes information on credit performance such as voluntary prepayments, repurchased and modified loans, and loans that became short sales, deeds-inlieu of foreclosure, and foreclosure transfers. Fitch Ratings says Freddie Mac's public release of its historical loan data is "an important step toward drawing private capital back to the U.S. mortgage market." The ratings agency believes such openness and cooperation will allow the GSEs to sell credit risk to the private market in the form of risksharing arrangements, gradually reducing their dominant role in housing finance. "Risk-sharing has been identified as a key initiative for the GSEs by their conservator," Fitch noted. "Transactions that sell mortgage risk through credit-linked notes or senior/ subordinated structures will help the GSEs offload some credit risk and provide market pricing guidance on the credit risk they retain." The FHFA's target is for $30 billion in risk-sharing this year, which Fitch says is very small relative to the outstanding balance of GSE-supported mortgages. Nevertheless, the agency says it views the move as "a positive step." FREDDIE MAC FILES SUIT AGAINST 12 BANKS OVER LIBOR SCANDAL The story of the London Interbank Offered Rate (Libor) scandal added another chapter in March as Freddie Mac brought suit against Barclays, Bank of America, Citibank, and several other institutions for investment losses related to alleged rate-rigging practices. The GSE is suing a dozen banks for "punitive damages to the extent allowable by law" as well attorneys' costs and legal fees. A dollar amount for damages sought was not specified. In its complaint, Freddie Mac asserts that each defendant in the suit "owed a duty to Freddie Mac to honestly and accurately report USD LIBOR and not to intentionally mislead Freddie Mac and others by secretly and collectively manipulating USD LIBOR for their gain and to the detriment of others in the financial markets." It was first revealed in June 2012 that traders at some institutions had been involved from 2007 to 2010 in a rate manipulation scheme. Barclays was the first to admit its involvement in the scandal, paying $453 million in a settlement with authorities. Since then, UBS and Royal Bank of Scotland have also paid for their own alleged roles. In December, the Federal Housing Finance Agency's Office of the Inspector General (FHFA-OIG) revealed Freddie Mac, along with Fannie Mae, may have lost upwards of $3 billion as a result of the rate-rigging. VERBOSITY "We know that Fannie Mae will not continue in the future as it operated in the past and that its role and structure will change over time. In this transition period, we are determined to restore trust and create a positive legacy. We will do this through our performance." —Fannie Mae, 2012 Progress Report 23

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