Single-family mortgage securitization by Fannie Mae and Freddie Mac increased sharply during the third quarter of 2012, according to a new Inside Mortgage Finance ranking and analysis. New production of mortgage-backed securities by the two government-sponsored enterprises rose 22.4 percent from the second quarter, driven by a hefty 19.4 percent increase in refinance business. Refinance loans accounted for 76.9 percent of GSE securitization during the period, and the dollar volume of refi loan sales rose 19.4 percent from the second quarter. Fannie posted...[Includes three data charts]

The conservator of Fannie Mae and Freddie Mac has been lax in its oversight of business decisions made by the two government-sponsored enterprises and lacks a formal verification process to keep the two companies honest, according to a new audit by the Federal Housing Finance Agency’s official watchdog. The FHFA’s Office of Inspector General found numerous instances where the FHFA didn’t ask the companies and the two GSEs didn’t tell the agency about significant business decisions, even when such approval was required. “FHFA-OIG found that FHFA did not require...

The Consumer Financial Protection Bureau has been discreetly broadening its influence on statutory and regulatory interpretations through its largely unannounced filing of amicus curiae briefs in a handful of important cases brought by private litigants, according to an analysis of the CFPB’s legal activity by two leading industry attorneys.Since December 2011, the bureau has filed six such “friend-of-the-court” briefs in federal appellate cases, always assuming the role of steadfast consumer advocate, according to a review of the briefs by Arthur Axelson and Jeffrey Jamison, senior counsel and associate, respectively, with the Dykema law firm. In fact, “in several of its amicus curiae briefs, the CFPB has even sought to reverse a general consensus among the federal appellate courts,” the pair noted. In Birster v. American Home Mortgage Services, Inc., filed Dec. 21, 2011, in the 11th Circuit Court of Appeals, the question of interest to the bureau was whether activity surrounding foreclosure is immune from the Fair Debt Collection Practices Act. The CFPB argued that it is not. In Marx v. General Revenue Corp., filed Jan. 26, 2012, in the 10th Circuit Court of Appeals, there were...

If a mortgage lending industry that remains anxious about regulatory overkill wants to capture the attention of regulators and policymakers and convince them to lighten up, it will make more of an inroad talking about how those regulations will hurt consumers as opposed to lamenting the impact on companies themselves, a top industry official said this week. Among the regulatory rulemakings keeping mortgage industry representatives up at night are the Basel III proposal, the pending qualified mortgage rule, the qualified residential mortgage rule, the repurchase rule and the loan originator compensation rule, according to Mortgage Bankers Association President and CEO David Stevens. However, “The real thing that I think all of us have to be vocal and adamant about as we talk about these rulemakings, is...

MGIC Investment announced late last week that it won certain concessions from Freddie Mac and the two are working to resolve a dispute regarding mortgage insurance pool pricing by the end of this month. Freddie cut a required capital contribution by MGIC Investment in half and allowed a significant expansion of the number of areas in which an MGIC subsidiary can write new business. “I am pleased with the spirit of cooperation all parties have shown in moving forward to reach this point,” said Curt Culver, chairman and CEO of MGIC Investment and Mortgage Guaranty Insurance Corp. “While there can be no guaranty that the open matters that remain can be successfully resolved, I am hopeful we will continue to make progress.” In May, MGIC filed...

There is a clear need to reform the government-sponsored enterprise structure but how aggressively Congress will move on it and whether the next administration can provide much-needed leadership is unclear, according to housing and mortgage industry experts. Panelists in a forum hosted this week by the Progressive Policy Institute and the American Action Forum said they doubt Congress will be able to deal with the complex issue of GSE reform in 2013. Some among the panel of top economists and housing market experts said it may take a while before Congress can act on any reform legislation, much less in a bipartisan manner. Congress will not be...

The CFPB said it wants to make it more expensive for lenders to break the law than to obey it. That message was sent loud and clear last week when the bureau and the Federal Deposit Insurance Corp. announced a $200 million joint enforcement action against Discover Bank over some of the company’s credit card marketing practices.Discover will also have to pay $14 million in a civil money penalty to be split 50/50 by the CFPB and the Department of the Treasury. The $200 million is to be divided among more than 3.5 million...

Prospects for the long-awaited information-sharing agreement between the state attorneys general and the CFPB are suddenly noticeably darker. Not only has a group of Republican state AGs apparently refused to sign the pending memorandum of understanding, three GOP state AGs have joined a lawsuit that challenges the constitutionality of the law that created the bureau. News accounts emerged last week that a number of Republican state AGs have reportedly refused to sign the MOU that was developed to protect...

Just exactly how the CFPB plans to define “qualified mortgages” in its forthcoming ability-to-repay proposed rule remains uncertain after the bureau’s chief, Richard Cordray, testified before the House Financial Services Committee last month. Cordray indicated the bureau has not yet decided whether it plans to adopt a safe harbor, which is the industry’s preferred standard, or the rebuttable presumption approach, which is the standard consumer advocates are pushing for. He also suggested that some of the differences...

The CFPB has released its five-year strategic plan, including four key goals, 11 desired outcomes, and 25 strategies that indicate the actions the bureau plans to take to accomplish its outcomes. The plan also features 27 performance measures that the CFPB will track against specific targets in order to assess its progress toward achieving those outcomes, as well as four performance indicators that do not reflect specific targets. Its first two goals are to prevent financial harm to consumers while promoting good...