An improved housing market puts Fannie Mae and Freddie Mac back in the black and generating enough profit to repay most of the $188 billion in bailout funds from the U.S. Treasury. The reduction in foreclosures generates huge cuts in mortgage servicing jobs at Chase Bank.
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Fannie Mae sending $10.2 billion to taxpayers as profit swells
By Margaret Chadbourn Reuters August 8, 2013
Fannie Mae (FNMA.OB), the largest U.S. mortgage finance company, said on Thursday its second-quarter profit nearly doubled to $10.1 billion, triggering another big payment to the U.S. Treasury that could complicate the debate over revamping Fannie and its smaller sibling, Freddie Mac.
The quarterly profit was Fannie’s sixth in a row, mainly driven by a housing recovery that has reduced mortgage delinquencies and lifted home prices. The government rescued Fannie Mae and Freddie Mac (FMCC.OB) in 2008, covering losses on soured loans. Since then, taxpayers have bailed out the pair to the tune of nearly $188 billion.
Fannie Mae said it will make a $10.2 billion dividend payment in September to the U.S. Treasury for its rescue aid. After that payment, which comes on the heels of nearly $60 billion Fannie sent to the government last quarter, it will have paid about $105 billion in dividends to the Treasury, roughly 90 percent of the $117.1 billion it received in taxpayer assistance.
Meanwhile, Freddie Mac, which on Wednesday reported its second-largest profit ever, $5 billion, will be sending Treasury a $4.4 billion check next month. That will bring its running total to about $41 billion, or close to 60 percent of the $71 billion in bailout funds provided to Freddie.
Under the terms of the bailout agreement, both mortgage companies are only allowed to hold $3 billion in net worth and all profit in excess of that goes back to taxpayers.
Moreover, none of the dividend payments goes toward repaying the $188 billion in rescue funds, which were provided by the government and gave it a controlling stake in the form of preferred shares. Neither company has the option of buying back the stakes, which is one of the big questions regarding their future.
Chase cutting 450 Fort Worth positions as mortgage foreclosures decline
By Jim Fuquay Fort Worth Star-Telegram August 8, 2013
JPMorgan Chase will cut 450 mortgage servicing jobs at its CentrePort facility in northeast Fort Worth as the need for personnel to handle foreclosures decreases, the bank said Thursday.
Chase spokesman Greg Hassell said another 25 jobs in other North Texas locations also will go. The cuts are a small percentage of the bank’s approximately 14,500 employees in North Texas, and Chase hopes to place some of the affected workers into 340 current job openings in its regional operations, Hassell said.
Chase in February announced that it plans to cut 19,000 jobs companywide by the end of 2014, including 13,000 to 15,000 in mortgage-related positions. The local cuts are part of that, Hassell said Thursday.
He said affected workers will receive at least 90 days’ notice.
According to data from RealtyTrac, a real estate information service, U.S. foreclosures are at their lowest level since 2007, just before the financial crisis took hold. Also, mortgage refinancings have waned with the recent rise in interest rates, although mortgage rates remain historically low and home purchase loans are up.
JPMorgan Chase is the nation’s second-largest servicer of mortgages, with just over $1 trillion in its portfolio as of June 30, according to Mortgage Daily, an online data provider. Mortgage servicers handle borrowers’ monthly payments as well as delinquent loans, institute foreclosure proceeds when necessary, and distribute the proceeds to investors and other mortgage lenders.
Chase is the largest bank in Tarrant County and second-largest in the Metroplex by deposits. The bank and its predecessors have long operated a large operations facility at CentrePort, just south of Dallas/Fort Worth Airport, that handles a variety of functions.
Harbor Point was failed public housing—until it was rebuilt as the nation’s first mixed-income community. Twenty-five years later, what can we learn from this visionary project?
By Witold Rybczynski Architect Magazine August, 2013
Although Americans regularly pay lip service to the value of diversity, the truth is that people of different incomes generally choose—for a variety of reasons—to live apart. Nevertheless, since 1992, the federal government has spent more than $5 billion to encourage the rich and poor to live side by side. The so-called Hope VI program has awarded several hundred block grants to scores of cities around the country to replace the barracklike public housing projects of the 1950s with a blend of subsidized and market housing.
Replacing the projects, which concentrate the poor in isolated enclaves, with mixed-income neighborhoods certainly sounds like a great idea. But what does it take to make a successful socially engineered community that departs so radically from the American mainstream? The model for the Hope VI program was a pioneering housing experiment in Boston called Harbor Point, the nation’s first attempt to transform a large dysfunctional federal public housing project into a mixed-income planned community. Now 25 years old, Harbor Point, perhaps more than other projects, can help answer that difficult question.