The Federal Housing Finance Agency (FHFA) will be holding a public event in Miami on Friday and a group representing investors will be ready to rumble on federal housing matters.
FHFA Director Mel Watt will be taking part in a town hall event at Miami-Dade College North Campus on Friday to encourage South Florida residents to take part in the Home Affordable Refinance Program (HARP).
We will be working with community leaders and other trusted sources to get the word out that more than 97,000 homeowners in Florida are still eligible for, and can save money by, refinancing through HARP, said Watt last month when the event was announced. We will also be providing information about the range of assistance available to homeowners in distress other than those who are eligible for HARP.
But with HARP participants using loans owned or guaranteed by Fannie Mae or Freddie Mac, representatives of Investors Unite will be waiting for Watt.
Investors Unite defines itself as a coalition of private investors from all walks of life, committed to the preservation of shareholder rights for those invested in the Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac. Formed by Tennessee businessman Tim Pagliara, Investors Unite has drawn a wide range of political support, ranging from the left, with consumer advocate and presidential candidate Ralph Nader, to the right with Ted Olson who served as solicitor general under President George W. Bush.
Investors Unite works to educate Fannie Mae and Freddie Mac shareholders and lawmakers of the importance of reforming the GSEs in a way that will reimburse shareholders what they are contractually and legally owed, but have not been paid, the group insists on its website.
Pagliara spoke to Sunshine State News on Thursday about what his group hopes to do. Noting that the federal government is mulling over GSE reform which could damage Fannie Mae and Freddie Mac investors, Pagliara and his group are looking to protect these shareholders, especially as many of them invested before the 2008 federal bailout and the current conservatorship.
Investors United puts a face on the individual investors who own these entities, Pagliara told Sunshine State News, noting that shareholders include ordinary individuals from all walks of life.
With the FHFA looking for input on proposed increases to guarantee fees (g-fees) that Fannie Mae and Freddie Mac charge lenders, Investors Unite is urging Watt not to raise them.
As long as Treasury is taking all of Fannie and Freddies profits, any increase in g-feeswould amount to nothing more than a new tax applied to general deficit reduction," Pagliara wrote Watt this summer. As you know, g-fees were historically determined by the GSEs and FHFA does not have a mandate as conservator to run the GSEs as not-for-profit entities. We urge you to adhere to a set of principles that takes into account the critical purpose of setting appropriate guarantee fees while respecting the rights of all economic stakeholders, including the GSEs shareholders.
Talking to Sunshine State News on Thursday, Pagliara insisted Watt has the authority to end the conservatorship curently in place and his group is urging the FHFA director to use that power. Last month, U.S. Sen. Tim Johnson, D-S.D., urged Watt to do that if housing reform continues to stall in Congress.
Everyone agrees that conservatorship cannot continue forever, so I hope my colleagues will keep working toward a more certain future for the housing market," Johnson told Watt at a Senate Banking Committee meeting in the middle of November. If Congress cannot agree on a smooth, more certain path forward, I urge you, Director Watt, to engage the Treasury Department in talks to end the conservatorship.
Pagliara told Sunshine State News that if Watt raises g-fees and investors in Fannie and Freddie are not made whole, the nations housing industry -- which he noted makes up 18 percent of the American economy -- would be hurt badly.
We stand for shareholder rights, Pagliara told Sunshine State News, noting raising the fees would be bad policy and a return to Depression-era policies.
This will cause mortgage rates to go up -- not because of the rates, but because of the risks, he said. They dont understand the financial markets and the impact it will have.
Admitting Watt has a tough job, Pagliara expected at least 20 supporters to be at the event on Friday, noting his 1,100 member group has big representation in Florida.
Were there to support the rule of law, following and representing shareholder rights, Pagliara said. Weve made good headway educating the public and I expect a good result.
Reach Kevin Derby at kderby@sunshinestatenews.com or follow him on Twitter: @KevinDerbySSN
