Further addressing the issue of subprime mortgage fallout, the National Association of Home Builders (NAHB) last week spoke to members of Congress on the issue of enacting comprehensive regulatory reform for government-sponsored enterprises, including Fannie Mae, Freddie Mac and the Federal Home Loan Banks.
Speaking to members of the Senate Banking Committee, NAHB executive vp and CEO Jerry Howard said, “At a time when the housing market needs them more than ever, Fannie Mae and Freddie Mac have failed to adequately respond to the mortgage crisis. Rather than aggressively pursue market solutions, they are hunkering down to shore up financial results and shareholder returns -- and are even taking steps that will further burden struggling mortgage borrowers.”
The NAHB has requested Fannie Mae and Freddie Mac be provided with “the flexibility to respond promptly, within their charters, to meet market needs.”
Fannie Mae CEO Dan Mudd addressed the NAHB in February, outlining steps the nation’s largest mortgage broker has taken to help subprime borrowers.
Specifically, Mudd focused on the company’s foreclosure prevention efforts, explaining how Fannie Mae is “reaching out to homeowners in need, helping them refinance into new loans, modifying existing loans, and when all else fails, giving them an exit with dignity; in other words, avoiding foreclosures at all costs.”
He said Fannie Mae has refinanced more than 68,000 subprime borrowers into prime-fixed loans (about $13 billion in loans), and the organization expects to do more as the next wave of short-reset ARMs (adjustable-rate mortgages) that originated in 2006 begin to adjust at higher levels this spring. Fannie Mae also supports the Hope Now “teaser freezer” initiative to give borrowers with short-reset ARMs time to refinance into cheaper loans.
In related news, Fannie Mae has announced that Jacqueline Wagner will join the company as senior vp and chief audit executive. Wagner was formerly with the American Express Company in New York, where since 2002 she served as senior vp, chief operational risk officer and general auditor.