Officials at the Federal Reserve signaled this week the bank will maintain its current level of market support for Fannie Mae, Freddie Mac and Ginnie Mae debt and MBS to help keep long-term interest rates for mortgages and other products at historic lows. The housing market remains mired in a lackluster recovery, shackled by massive foreclosures and a huge overhang of unsold inventory, despite all the unconventional support the Fed has bent over backwards to provide. During its meeting this week, the Federal Open Market Committee decided to maintain its “highly accommodative stance for monetary...

Analysts have mixed expectations for residential mortgage servicing in 2012, with some seeing it as a year of foreclosure-prevention reforms and others anticipating a higher level of vigilance in new deals and loan quality. Although issuance of non-agency MBS will be modest again in 2012, new deals will have more comprehensive reviews of originators, more reliable and better-quality loan-level data, and stronger enforcement of breaches of representations and warranties, according to Moody’s Investors Service. New deals will better address legal issues relating to foreclosure challenges. Some of the deals...

Ginnie Mae said it may begin assigning alphanumeric pool numbers for MBS pools as soon as next month because it is fast running out of available pool numbers. The agency said fixed-rate pool types will be the first recipients of the alphanumeric pool numbers. Issuers should make sure that all their remaining assigned pool numbers are used before using the newly assigned alphanumeric IDs. Issuers were advised in 2009 to have their systems ready to accept alphanumeric IDs by March 1, 2010. In another development, MountainView Servicing Group has announced its offering of a $129 million portfolio of Ginnie...

Expect the run up to the fall elections to curb any meaningful results in terms of a legislative overhaul of Fannie Mae and Freddie Mac. However, industry insiders say it’s quite likely that lawmakers will work through the year to tweak various GSE reform proposals for the next Congress to take up in 2013.As Congress resumed this week following the holiday break, members returned to some 14 bills in the House advancing their way through committee – though only a couple are considered “comprehensive” reform legislation. Meanwhile, two bills filed at the end of last year in the Senate got the other chamber of Congress into the GSE reform debate after a long dormancy.

The Federal Home Loan Bank of Chicago is in the midst of crafting an “unusual” plan to supplement the Bank’s current affordable housing and community investment programs with $50 million in additional funds to be used to promote housing and economic development throughout its district.According to a filing the Chicago Bank made with the Securities and Exchange Commission late last month, the three-year initiative will be in addition to the Bank’s current Affordable Housing Program (AHP) grant process and is part of an agreement with the FHLBank regulator, the Federal Housing Finance Agency.“We are in the process of developing the framework for the use of these funds which will be deployed by the end of 2014,” explained the Bank in its Dec. 27 SEC filing. “This program will be in addition to our other community investment programs in 2012, 2013 and 2014.”

The Federal Home Loan Bank of Cincinnati last week announced a changing of the guard among top management as the Bank’s president and CEO will step down this summer to retire.David Hehman will step down effective June 1 after 35 years at the Bank, including nine years as its president and CEO. Hehman, 63, is credited with leading the FHLBank of Cincinnati through the 2008 financial crisis when banks of all sizes were forced to turn to the Cincinnati FHLBank for liquidity.The FHLBank’s board appointed Andrew Howell to replace Hehman. Howell joined the FHLBank of Cincinnati in 1989 and is currently its executive vice president and chief operating officer.

Despite the Federal Housing Finance Agency’s release of a long awaited study justifying its position against the writedown of underwater GSE mortgages, principal-reduction proponents, including House Democrats, appear poised to redouble their efforts to pressure the FHFA to see things their way.This week, the Finance Agency released its analysis of taxpayer losses to explain the FHFA’s policy decision to exclude principal forgiveness as a policy in favor of principal forbearance, the alternative that the GSEs currently apply to their underwater loans.As of June 30, 2011, Fannie Mae and Freddie Mac had nearly 3 million first-lien mortgages with outstanding balances in which the borrower owed more than the loan on the home was worth.

A trio of real estate finance trade groups is calling upon Congress to leave the GSEs’ guarantee fees alone as lawmakers devise a way to pay for tax cuts for the remainder of 2012.The Mortgage Bankers Association, National Association of Realtors and National Association of Home Builders dispatched a joint letter to House and Senate leaders late this week noting their united opposition “to increasing g-fees for reasons other than minimizing the GSE’s risk exposure.” Late last month, the Federal Housing Finance Agency directed Fannie Mae and Freddie Mac to increase g-fees on new mortgage products by 10 basis points starting April 1.

California remained the biggest source of new single-family mortgages for Fannie Mae and Freddie Mac during 2011, according to the new special report, GSE Market Profile: 2011, from Inside Mortgage Finance Publications.A total of $189.9 billion of home loans on California properties were securitized by the two GSEs, accounting for 22.6 percent of their total business for the year. That was down 15.1 percent from the total California Fannie/Freddie production back in 2010, while the overall GSE market fell 17.0 percent from a year ago.Although fixed-rate mortgages dominated the GSE market in 2011, California produced $17.9 billion in adjustable-rate mortgages – 30.8 percent of the national total. ARMs accounted for just 6.9 percent of the total GSE volume.

No matter which political party controls the House during next year’s 113th Congress, there will be a new House Financial Services Committee chairman in charge of setting the agenda as both the current chair and the ranking member are vacating their positions at the end of 2012.Rep. Spencer Bachus, R-AL, said this week he will observe the House’s six-year term limit rule for chairmen and ranking members and not seek a waiver with the House Republican Conference. On Nov. 28, Rep. Barney Frank, D-MA, the committee’s one-time chairman and current ranking member announced he would retire from Congress at the end of his present term. Bachus, who was elected to the House in 1992, is seeking re-election this fall.