Posturing for Progress

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local edition Or ig i nat ion SECONDARY MARKET Tornado Survivors Receive Help from GSEs s e c on da r y m a r k e t a na ly t ic s se r v ic i ng Fannie Mae and Freddie Mac help the areas affected by summer storms. OKLAHOMA // Fannie Mae and Freddie Mac reminded servicers of mortgage relief options available to homeowners whose residences were affected by the tornado that ravaged areas in Oklahoma. Relief options for borrowers in disaster areas include delayed foreclosure and eviction proceedings, waived penalties and late fees, and gave forbearance on mortgage payments, among other forms of assistance. "Our servicers are required to offer assistance to homeowners who have been affected by a natural disaster," said Leslie Peeler, SVP at Fannie Mae. "We know that many people have had their lives impacted as a result of this tornado, and our thoughts and prayers are with them. We will work with our servicers to make sure they are providing the appropriate options to borrowers." "Freddie Mac is urgently reminding the nation's mortgage servicers about the full range of mortgage relief options they can provide to affected borrowers with mortgages we own or guarantee, including forbearance on mortgage payments for up to one year. We strongly encourage borrowers to contact their servicers, who are fully authorized to work with them on a case-bycase basis," said Tracy Mooney, SVP for Freddie Mac. The GSEs advised affected borrowers to contact their mortgage servicer to receive assistance. Potential FHA Losses Worse then Expected Some legislators worry the agency is trying to cover up the extent of its financial troubles. 62 | The M Report WASHINGTON, D.C. // A House panel is investigating what it believes is an attempt by Federal Housing Administration (FHA) officials to cover up the full details of the agency's financial troubles regarding its Mutual Mortgage Insurance (MMI) Fund. why her agency hadn't reported the larger figure. Issa also sent a letter to IFE requesting more information on the report. According to the Journal, an October email between an IFE analyst and "a senior FHA official" showed that while the Fannie Mae and Freddie Mac reminded servicers of mortgage relief options available to homeowners whose residences were affected by the tornado that ravaged areas in Oklahoma. The House Oversight and Government Reform Committee reviewed emails between FHA and IFE Inc., the firm that conducted the agency's actuarial report last year. While FHA projected a deficit of $16.3 billion (revised to $943 million in the White House budget), the messages reveal that its losses could be as high as $115 billion under the most extreme conditions. In a letter first reported on by the Wall Street Journal, Rep. Darrell Issa (R-California), head of the committee, asked FHA commissioner Carol Galante agency wanted the results of the more extreme scenario, it preferred to keep that analysis out of the report that would be reviewed by media. In a response to the Journal, HUD spokeswoman Addie Whisenant said the agency is reviewing the issue and will "respond to the committee appropriately." A lawyer representing IFE asserted the firm was not pushed to change its conclusions or evaluating methods and "look[s] forward to working with Chairman Issa's staff to share our views with them." GDP Drops in Q1 Corporate profits slide, causing the nation's economy to slow its growth. WASHINGTON, D.C. // The U.S. economy grew at a seasonally adjusted annual rate of 2.4 percent in the first quarter, slightly slower than originally reported, the Bureau of Economic Analysis (BEA) reported. Economists surveyed by Bloomberg had expected the revised gross domestic product (GDP) to grow at a 2.5 percent pace, unchanged from the first estimate issued a month ago. At the same time, BEA said corporate profits in the first quarter were $1.97 trillion, down almost $44 billion from the fourth quarter. The last time corporate profits showed a quarter-overquarter decline was in the first quarter of 2012. Corporate profits are considered a key indicator of employment trends. Profits fell for both financial and non-financial corporations. The quarterly drop in profits at financial corporations was fourth in the last five quarters. The GDP estimates were based on data updated from the initial report issued a month ago. For that report, BEA said only two months of data were available for several key data sources, and it assumed an increase in nondurable manufacturing inventories, an increase in merchant wholesale and retail inventories, an increase in exports of goods (excluding gold), and a decrease in imports of goods, excluding gold. The positive movement in GDP meant the economy met and overcame two significant challenges: the end of the twoyear payroll tax holiday as of January 1—which cost most wage earners $1,000 for the entire year—and as of March 1, the beginning of the federal budget sequester, which reduced federal spending. Government spending in the revised report was down about $5 billion from the initial report.

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