The Missouri Court of Appeals recently reversed a judgment that was in favor of Fannie Mae in a case the GSE brought against a couple who purchased a foreclosed property. The disagreement about the property, purchased by Harvey and Christine Pace in 2002, centers on who owns the title to the home. At the time of the home purchase, the property’s seller lived out of state and executed a special warranty deed conveying the property to the Paces. But the promissory note to purchase the home only identified the husband as borrower because the wife did not sign the note or the deed of trust.

In its ongoing oversight of the Federal Housing Finance Agency since 2010, the FHFA Office of Inspector General has made more than 350 recommendations to the agency to improve efficiency and reduce waste and abuse.The FHFA OIG published a list of the open recommendations that it has suggested to the FHFA through June 1. The topics range from the need for better oversight of the Fannie Mae headquarters to issues surrounding the supervision and accreditation of examiners. All but one of the matters requiring attention (MRAs) centered on responsibilities delegated to the FHFA since conservatorship.

Bank and thrift members of the Federal Home Loan Bank system had outstanding advances of $522.5 billion at March 31, a quarterly decrease of 7.2 percent, according to an analysis by Inside The GSEs.But the year-over-year numbers are still up, with the first quarter of 2017 8.6 percent higher than the $481.2 billion reported in the first quarter of 2016. In fact, the $563.3 billion reported at the end of the fourth quarter represented the largest volume of advances for the whole year.JPMorgan Chase continues to lead among borrowers with $74.3 billion in advances, down 6.5 percent from the previous quarter.

A new lawsuit arguing the merits of the Treasury net worth sweep was filed in Michigan, while other cases continue to hang in the balance in various phases of discovery. Michael Rop, Stewart Knoepp and Alvin Wilson v. the Federal Housing Finance Agency was filed this month by three shareholders who want the court to vacate the third amendment to the preferred stock purchase agreement and declare the structure of the Federal Housing Finance Agency unconstitutional.According to court documents, the trio is looking to challenge “both past and ongoing abuses of power by a federal agency that operates wholly outside of the system of limited and divided government established by the constitution.”

Treasury Rumored to Appoint Fannie Counsel as Deputy. Brian Brooks, Fannie Mae’s general counsel and former colleague of Treasury Secretary Steve Mnuchin, is reportedly being tapped as deputy secretary of the Treasury Department, according to Axios. The Trump administration has not confirmed the appointment. Brooks worked with Mnuchin at OneWest Bank. Freddie Mac Prices First Tax-Exempt ML Certificates Offering. Freddie Mac expanded its support for affordable housing with a new series of credit-risk transfer securities backed by Tax-Exempt Loans (TELs) made by state or local housing agencies and secured by affordable rental housing. The company recently priced approximately...

Ginnie Mae hit a milestone in the MBS market during the first quarter of 2017, edging past Freddie Mac to become the second-largest supplier of single-family MBS in the world. A new Inside MBS & ABS analysis reveals $1.705 trillion of Ginnie 1-4 family MBS outstanding at the end of March, a 2.2 percent increase in just three months. Meanwhile, outstanding single-family Freddie MBS rose 0.7 percent to $1.703 trillion. Both Ginnie and Freddie accounted...[Includes two data tables]

This week, the Federal Reserve’s Open Market Committee provided a bit more information on the process it plans to follow in shrinking the size of its massive balance sheet, once it decides the time is right to finally begin. “Provided that the economy evolves broadly as the committee anticipates, we currently expect to begin implementing a balance sheet normalization program this year,” Fed Chair Janet Yellen said in her post-meeting press conference. The hope is to initiate an incremental and largely predictable decline in the U.S. central bank’s securities holdings. The FOMC intends...

The Trump administration wants to pare back regulations that inhibit the non-agency MBS and ABS market and tilt current securitization economics that favor the government-sponsored enterprises over private issuers. “In order to revitalize a responsible [private-label securities] market, it is important to improve incentives for issuers through reasonable reductions in costs and regulatory burdens,” the Treasury Department said in a new report released this week. In particular, it aimed at adjusting relative economics for the government-sponsored enterprises and FHA/VA mortgage programs. On the regulatory side, Treasury recommends...

Fannie Mae General Counsel Brian Brooks is rumored to be up for a top post at the Treasury Department, a development that if consummated would add yet another seasoned industry veteran familiar with the government-sponsored enterprises to the agency. What that might mean for “administrative” reform of Fannie Mae and Freddie Mac is another question. As Inside MBS & ABS went to press this week, Brooks – who joined Fannie from OneWest Bank in November 2014 – had not been...

The average daily trading volume in agency MBS fell to $185.1 billion in May, the lowest reading of the past 17 months, according to the Securities Industry and Financial Markets Association. Year-to-date, the average is still ahead of last year’s pace but not by much: $204.2 billion compared to $201.9 billion for 2016. But these are interesting times for investors as both bonds and stocks continue to rally near new highs. Earlier this week, the yield on the benchmark 10-year Treasury fell to 2.12 percent, the lowest reading since the November election. It’s...