A data and analytics firm has developed a method to hedge exposure to the underlying risk associated with fluctuating real estate values. The Chicago Board Options Exchange has approved the RPX Futures for its futures exchange. The RPX Composite Index, designed by Radar Logic, calculates the daily value of home prices by determining the price of housing per square foot. “The RPX is a translation of price per square foot gathered from public source records,” explained Michael Feder, CEO of Radar Logic. “We look at all closing transactions with enough information to observe.” The index numbers...

The Treasury Market Practices Group this week issued new guidance on the system of charges for failed agency MBS trades that went into effect earlier this year, hoping to address lingering industry concerns about the voluntary program. The group acknowledged that market participants will likely see an increase in operational expenses from the system, but participants should see a decline in the amount of resources they have to commit to addressing these issues as the number of failed trades declines. For the agency MBS market, the TMPG said its recommended two-day resolution period should allow...

A Chicago police officers’ pension fund has filed suit against Bank of America and U.S. Bancorp, claiming that the two banks failed to protect investors during their turn as MBS trustees and violated an obscure, seven-decade-old federal securities statute. The lawsuit, brought last week by the Chicago Policeman’s Annuity & Benefit Fund, said that BofA, and later U.S. Bank as successor trustee, “regularly disregarded their contractual and statutory duties” by failing to oversee some 41 Washington Mutual trusts backed by home loans. “By failing to perform their duties, defendants have caused MBS holders...

Lack of procedures for resolving repurchase conflicts between non-agency MBS investors and providers of representations and warranties could negatively affect the rating for any newly issued residential MBS, according to a new analysis by Moody’s Investors Service. The volume of unresolved repurchase conflicts between MBS investors and reps and warranties providers can be gauged by the number of lawsuits and the growing dollar value of settlements, said Moody’s analyst Kathryn Kelbaugh. The issue was thrust into the spotlight recently because 82 percent of the loans backing the $746 million non-agency...

After months of hearing Congressional Democrats and White House allies suck up the public debate oxygen in favor of GSE principal reduction, mortgage writedown opponents are speaking up as the Federal Housing Finance Agency looks to be reconsidering its stand against loan forgiveness. Industry groups are expressing with greater volume their concern that principal forgiveness on loans guaranteed by Fannie Mae and Freddie Mac would ultimately hurt the housing market.

Four and a half years after it was placed on a form of probation, the Federal Home Loan Bank of Chicago was officially released from its consent cease-and-desist order by the Federal Housing Finance Agency this week. FHFA Acting Director Edward DeMarco said the Finance Agency terminated the order because of improvements in the Bank’s financial condition and capital position, resolution of the agency’s risk management concerns and consideration of “specific comments and assurances made by the FHLBank’s board of directors to FHFA.”

The Federal Housing Finance Agency has revised and consolidated its categories for safety and soundness and Affordable Housing Program examination findings pertaining to Fannie Mae, Freddie Mac and the Federal Home Loan Banks, the FHFA announced in a recent advisory bulletin. Examination findings are deficiencies related to risk management, risk exposure, or violations of laws, regulations or orders that affect the performance or condition of a regulated entity, according to the FHFA.

Fannie Mae and Freddie Mac’s mortgage servicers will soon be required to review and respond to short sale requests within 30 days of an offer on the property and to provide weekly status updates if the offer is still under review after that, under new standards issued this week by the Federal Housing Finance Agency. Under the new guidance, effective June 15, servicers will have to make a final decision within 60 days of receiving an offer on a short sale property. The FHFA said the change is an attempt to hasten the traditionally time-consuming and difficult primary alternative to foreclosure.

MBS Business Surges in 1Q 2012 Due to RefiGSE single-family securitizations leapt 16.2 percent during the first three months of 2012 compared to the previous quarter as mortgage lenders delivered some $303.9 billion in home loans to Fannie Mae and Freddie Mac’s securitization programs, according to an Inside The GSEs analysis. The first quarter’s flood of new business marked the fourth straight quarterly increase in production of GSE mortgage-backed securities after the market tanked in the second quarter of 2011.

Fannie Mae and Freddie Mac’s combined cash infusion from taxpayers during the latter half of 2011 came in significantly below estimates forecast by the GSEs’ conservator, according to a new report. The Federal Housing Finance Agency’s fourth-quarter conservatorship report noted that Fannie and Freddie’s actual combined draw during the second half of last year was $19 billion, some $10 billion below the Finance Agency’s most optimistic projections issued last fall. In October, the FHFA circulated its updated projections of the financial performance of the GSEs, including potential draws under the Senior Preferred Stock Purchase Agreements with the Treasury Department.