The gap between the performance and liquidity of Fannie Mae and Freddie Mac MBS continues to widen and a proposal to make their securities interchangeable is gaining traction among stakeholders. But unless a workable valuation solution is found, bridging that gap between the two government-sponsored enterprises will remain nearly impossible, said the Mortgage Bankers Association. Pricing differences between Fannie and Freddie have grown...

Leading Senate Democrats and Republicans have been moving cautiously to advance legislation to expand the Home Affordable Refinance Program, although industry observers say the odds are long the measure will see meaningful Congressional action before the legislative clock runs out. Senate Banking Committee Chairman Tim Johnson, D-SD, and Sen. Richard Shelby, R-AL, the committee’s ranking member, have been working on an agreement to ensure that the proposed amendments to the legislation in a markup would be strictly narrowed to making changes to HARP. However, Shelby is pushing to permit any provision on housing finance to be considered...

When it comes to modifying non-agency mortgages, early loan modifications greatly increase the rate of success, and principal reductions are the most effective type of loan mod, according to a new study by the MBS strategy group at Amherst Securities Group. “Modification activity has undergone a dramatic reshaping over the past few years, which has dramatically improved modification success,” the study said. “In particular, payment reductions are much larger now, and that is...

Roughly 27 percent of outstanding Ginnie Mae MBS pools are eligible for the FHA’s revised streamline refinancing program, which could translate to $36 billion in new annual Ginnie Mae issuance, according to a report from Barclays Research. Barclays analysts estimated that about $293.0 billion of Ginnie Mae’s $1 trillion-plus 30-year loan pools were originated before May 2009. About 79 percent of the collateral backing these pools are FHA loans, which suggests that as much as $232.0 billion could qualify...

Relatively few repurchase demands on mortgage loans backing non-agency MBS were resolved during the first quarter of 2012, according to a new Inside MBS & ABS analysis of disclosure filings made by 34 securitizers. The securitizers reported that a total of $29.03 billion of loans were in some stage of the process following demands that the mortgages be repurchased because of breaches of representations and warranties by the originator of the loans. But of that amount, some $28.62 billion – 98.6 percent of total activity – were classified...(includes one data chart)

The Securities and Exchange Commission is coming down the home stretch in a project that has raised jitters in the MBS and ABS market: a review of the credit rating process for structured finance transactions that will conclude with reform recommendations for Congress. Embedded in the Dodd-Frank Act was a provision authored by Sen. Al Franken, D-MN, that requires the SEC to study potential conflicts of interest in issuer-pay and subscriber-pay compensation models used in the credit rating process. Franken originally proposed that the SEC be required to create a process through which a new government entity would assign...

Mortgage lenders and servicers face increased congressional and regulatory attention and pressure over how they should respond to the unique needs and problems active-duty U.S. military personnel face handling their mortgages, particularly when they are transferred. Sen. Richard Shelby, AL, ranking Republican on the Senate Banking, Housing and Urban Affairs Committee, emphasized during a hearing this week the disruptions that Permanent Change of Station orders can cause service members. “When PCS orders are issued, service members are required to move even if they owe more on their mortgage...

The reallocation of hundreds of millions of dollars of funds paid by the nation’s five largest loan servicers to states as part of this year’s whopping $25 billion national foreclosure settlement has ignited intra-state feuding as to how best utilize the cash windfall, according to a mortgage industry attorney. During a webinar sponsored last week by the State Attorneys General Enforcement Network, Jeremiah Buckley, founding partner of BuckleySandler, noted “emerging controversies” among state elected officials as they do battle, in some cases via the courts, to ensure the funds are used for consumer/mortgage-related purposes. The landmark agreement finalized in April between Ally Financial, Bank of America, Citigroup, JP Morgan Chase and Wells Fargo with a coalition of state attorneys general...

For the second time in less than a year, Fannie Mae’s and Freddie Mac’s conservator has gone to court in Illinois to assert that the two federally chartered government-sponsored enterprises are exempt from certain local and state property assessments. Last week, the Federal Housing Finance Agency filed suit in the U.S. District Court Northern District of Illinois, Western Division, against the Illinois Department of Revenue and county clerks to block local government efforts to collect real estate transfer taxes from Fannie and Freddie. The FHFA suit was in response to litigation filed by DeKalb County and five other counties to compel...

Old Republic International Corp.’s top management said it is postponing indefinitely plans to reenter the mortgage guaranty market after cancelling a planned spinoff and reversing the partial leveraged buyout of its subsidiary, Republic Financial Indemnity Group. In a conference call this week, ORI Chief Executive Officer Aldo Zucaro stood by the company’s decision to withdraw the registration statement filed with the Securities and Exchange Commission in May for spinning off RFIG common stock to ORI shareholders. He said stakeholders, including the North Carolina Department of Insurance, Fannie Mae, Freddie Mac, banks, debtholders and shareholders, rejected...