Improving market conditions and strengthening appetites on Wall Street have encouraged a pair of MBS-buying real estate investment trusts to hit up the equity markets, including an initial public offering from relative newcomer First Oaks, which touts a hybrid investment model.

Fannie Mae may be having second thoughts about selling nonperforming loans into the secondary market where cash-rich investors are waiting with bated breath.

The mystery surrounding how much Fannie Mae really earned in the fourth quarter – and full year – could be solved by the end of next week, as the Federal Housing Finance Agency softens its stance toward allowing the GSE to capture at least a portion of its $64 billion valuation allowance for deferred tax assets. Industry officials who claim to have knowledge of the matter said FHFA is actively working with the GSE to resolve the situation. One former Fannie Mae official said it’s likely the agency will allow both Fannie Mae and Freddie Mac to claim deferred tax assets over several quarters.

Lawmakers of both parties in the House and Senate are talking like they are poised to finally ramp up their efforts to tackle housing finance reform, including disposition of the GSEs, but industry observers are skeptical that members will overcome differences and accomplish anything tangible. Last week, during hearings by the House Financial Services and Senate Banking, Housing and Urban Affairs committees, members spoke with more conviction about taking action, but said the devil is in the details. Some Republicans are pushing for a fully private housing finance system, while many Democrats desire some sort of government involvement to support originations of 30-year fixed-rate mortgages.

The Federal Housing Finance Agency is warming up plans to launch a sales blitz for the successful but sun-setting Home Affordable Refinance Program. Last week, while testifying before the House Financial Services Committee, FHFA Acting Director Edward DeMarco said the agency will soon implement a nationwide marketing campaign for HARP “to let borrowers know this is a legitimate program. We want to see more borrowers refinance.”

Fannie Mae and Freddie Mac, at the direction of the Federal Housing Finance Agency, rolled out a new streamlined loan modification program designed to increase the number of mods and reduce the number of foreclosed loans owned or guaranteed by the GSEs – a move not without some risks, analysts say. Beginning July 1 and running through Aug. 1, 2015, servicers can send modification notices to eligible borrowers who are between 90 days and 24 months delinquent under the Streamlined Modification Initiative. Building on the principles of the FHFA’s Servicing Alignment Initiative, the new streamlined mod effort seeks to encourage servicers to resolve delinquencies earlier and in a more consistent and timely manner to keep more people in their home and minimize losses to the GSEs and taxpayers, according to FHFA Acting Director Edward DeMarco.

Fannie Mae and Freddie Mac mortgage-backed securities remained the preferred investment choice of the 12 Federal Home Loan Banks during the fourth quarter of 2012, with a slight decrease from the previous quarter, according to a new ranking and analysis by Inside The GSEs based on data from the Federal Housing Finance Agency. Ginnie Mae securities also posted a negligible decrease within the FHLBank system during the period ending Dec. 31, 2012. GSE MBS accounted for 72.3 percent of combined FHLBank MBS portfolios, down 1.1 percent from the third quarter. The Finance Agency’s data do not separately break out Fannie and Freddie securities.

A spinoff product of the Federal Home Loan Banks’ Mortgage Partnership Finance Program experienced explosive growth in lender participation resulting in a record 2012, according to the FHLBank of Chicago. The MPF Xtra program, launched in 2008 to serve as a conduit for Fannie Mae loans, saw its volume increase from $2.8 billion overall during 2011 to $6.9 billion at year-end 2012, noted the Chicago FHLBank in its fourth quarter 2012 earnings report.

The majority of financial institutions defending themselves against a massive litigation initiative by the Federal Housing Finance Agency on behalf of Fannie Mae and Freddie Mac for toxic mortgage-backed securities purchased by the GSEs launched a counteroffensive this week by urging a federal appeals court to intervene in their favor against the “unfair” trial judge. Fifteen banks, including JPMorgan Chase, UBS Americas, Citigroup, Deutsche Bank and Bank of America, filed a joint petition with the Second Circuit Court of Appeals in New York complaining that U.S. District Judge Denise Cote has engaged in a “one-sided” approach designed to force a settlement rather than “foster fair and reasonable determination of the issues.”

Nearly two months after it shut down a plan by Fannie Mae to lower the costs of so-called “force-placed” insurance, the Federal Housing Finance Agency this week unveiled for public comment a plan that would ban the payment of lucrative commissions and reinsurance fees to banks in return for their purchase of lender-placed insurance policies. Under the FHFA proposal, seller/servicers would be prohibited from accepting sales commissions or fees related to the placement of force-placed insurance where a conflict of interest exists between them and the insurance providers and their affiliates. Fannie Mae and Freddie Mac may be affected by such costs where a servicer pays the higher premiums and is unable to recoup the cost from the homeowner or at a foreclosure sale. Consequently, explained the FHFA, the expense is passed along to the GSEs for reimbursement.