Despite the sharp increase in production under the Home Affordable Refinance Program, the overwhelming majority of refinance mortgages financed by Fannie Mae and Freddie Mac are well below current property values with substantial borrower equity. According to official data released late last week by the Federal Housing Finance Agency, HARP production jumped a whopping 93.4 percent in the first quarter of 2012, hitting a record 180,185 loans. HARP volume at Freddie was up more than double from the fourth quarter, while Fannie production jumped 79.8 percent. The first...(Includes three data charts)

The rule from Dodd-Frank with the largest ramifications for mortgage banking was reopened for comment late last week, and industry players are pleased that the Consumer Financial Protection Bureau is trying to get the definition of “qualified mortgage” right. “The reason things have slowed down is that the bureau learned more and realized what the impact of this rule is,” said Bob Davis, executive vice president at the American Bankers Association. “They have responded prudently and wisely by reopening the comments.” The qualified mortgage definition will outline a set of standards for what will become the new...

Fannie Mae this week tapped its chief administrative officer and general counsel to replace the company’s outgoing chief executive even as a bipartisan group of senators say they “remain deeply concerned” about “excessive” executive compensation at both government-sponsored enterprises. Fannie’s board of directors announced, with the Federal Housing Finance Agency’s consent, the appointment of Timothy Mayopoulos as president and CEO and elected him a member of the board. Mayopoulos, 53, currently holds the title of executive vice president but has managed several critical functions since he joined Fannie...

Although it has taken steps to mitigate risk related to advances and collateral at the 12 Federal Home Loan Banks, the Federal Housing Finance Agency needs to do more to strengthen its supervisory framework for the FHLBanks' risk management practices, according to a new report by the FHFA’s official watchdog. The FHFA Office of Inspector General found in an audit released late last week that the agency has not implemented a majority of its own examiners’ recommendations to effectively manage advances and collateral risks within the FHLBank system. “Although preliminary evidence suggests...

Banking regulators confirmed this week that the controversial risk-retention rule for mortgage securitization won’t be finalized until after an equally controversial rule on qualified mortgages is completed by the Consumer Financial Protection Bureau. CFPB Director Richard Cordray said during a hearing before the Senate Banking, Housing and Urban Affairs Committee that his agency still intends to make the Jan. 13, 2013, deadline set by Congress for issuing a final “ability-to-repay” rule required by the Dodd-Frank Act. Cordray said that the bureau would not submit the ability-to-repay rule to...

SunTrust Mortgage has agreed to pay $21 million to the federal government to resolve a lawsuit alleging pricing discrimination against minority borrowers over a period of four years. The Department of Justice, which brought the pricing lawsuit, said the settlement also requires that SunTrust continue the anti-discrimination policies and practices it had adopted prior to the settlement. The mortgage lender agreed to the settlement voluntarily without admitting to any wrongdoing and without any factual findings, adjudications or litigation. Filed in U.S. District Court in Richmond, VA, the...

Abacus Federal Savings Bank, a small bank that provides loans and other banking services in New York City’s Chinatown, was indicted along with 11 of its former employees for allegedly originating and selling fraudulent mortgage loans to Fannie Mae over a five-year period. An additional eight ex-employees agreed to waive indictment and admitted their guilt in connection with the alleged conspiracy, according to Manhattan District Attorney Cyrus Vance, who brought the 184 indictment charges last week. The indictment came after a two-year investigation of Abacus, its employees and managers, who allegedly...

Lenders should now consider themselves on notice that the GSEs have adopted an even more aggressive posture in pressing their representation and warranty rights on mortgage loans they find wanting, analysts say, as evidenced by last week’s announced $330 million repurchase of Freddie Mac mortgages by Bank of America. A Freddie spokesman said that the GSE and BofA “mutually agreed” that the bank would repurchase the 2010 and 2011 loans that were not eligible for sale to Freddie under the terms of the company’s contracts with BofA. Specifically, the loans were underwritten using alternative valuation methods that were prohibited for use in the underwriting of the particular types of mortgages involved.

Mortgage Guaranty Insurance Corp.’s hopes for a “business as usual” relationship with Freddie Mac despite the mortgage insurer’s recent lawsuit against the GSE over a pool insurance dispute appears to be wishful thinking after Freddie has counter-punched with litigation of its own, claiming breach of contract and seeking punitive damages. Two weeks ago MGIC filed suit against Freddie and the GSE’s regulator, the Federal Housing Finance Agency, in the U.S. District Court Eastern District of Wisconsin, Milwaukee division, where the MI is based.

Some 50 percent of registered voters view Fannie Mae and Freddie Mac negatively, according to a new survey by the Tarrance Group on behalf of the Woodrow Wilson International Center for Scholars. The national survey of registered “likely” voters found that Fannie held a 51 percent unfavorable to 22 percent favorable impression among voters surveyed while Freddie’s numbers were just as dour – 50 percent unfavorable to 17 percent favorable.