Fannie Mae and Freddie Mac lost a combined $9.2 billion during the third quarter – mostly due to writedowns on derivatives transactions – while the two government-sponsored enterprises continued to watch their massive MBS holdings decline. As of the end of September, Fannie and Freddie held a combined $754.54 billion of MBS in their retained portfolios, down 1.1 percent from the second quarter and a decline of 7.4 percent from the same July through September period last year. Fannie’s holdings of non-agency MBS fell 2.2 percent to $77.1 billion during... (Includes one data chart)

Ginnie Mae reiterated its desire to enhance its MBS disclosures by moving towards a Freddie Mac disclosure model, but officials are not providing specifics or a timeline. During a telephone press briefing on the agency’s fiscal year 2011 results this week, Ginnie Mae President Ted Tozer said the plan to move toward loan-level disclosures is still in play and investors are being consulted regularly on the kind of disclosures they would like to get. “We want to make sure we are doing it in a controlled, prescriptive manner and we want the information that we provide to be superior and consistent,” he said. “We are also...

Recent non-agency mortgage loan modifications are showing better results compared to earlier private-label modifications despite a continued slowdown in new modification activity, according to a new Fitch Ratings analysis. While the number of completed modifications dropped, transactions completed in the past 18-24 months have improved slightly over earlier programs as a result of standardized guidelines, the recent Fitch report said. Patterned on the Home Affordable Modification Program, the standardized guidelines helped to focus attention on creating more sustainable modifications. These features included...

The Federal Housing Finance Agency and its wards, Fannie Mae and Freddie Mac, want to change servicer compensation to provide more resources for addressing nonperforming loans and try to reduce consolidation in the market, but MBS analysts remain concerned that fiddling with the current system could derail the to-be-announced market. “A big concern is that the TBA market for mortgages is very fragile,” said Jim Gross, vice president of financial reporting and public policy at the Mortgage Bankers Association. “Making radical changes could further rock the market.” The more radical proposal outlined by the...

Lawmakers on both sides of the aisle and both chambers of Congress are warming up the hot seat next week for the man in charge of the conservatorships of Fannie Mae and Freddie Mac as they demand answers following the firestorm surrounding bonus payments for top GSE executives.In advance of what is expected to be a heated set of hearings, Federal Housing Finance Agency Acting Director Edward DeMarco dispatched a letter to lawmakers late this week to provide his perspective after approving $12.8 million in bonuses for 10 Fannie and Freddie executives.

The Federal Home Loan Bank Office of Finance announced that preliminary combined net income for the FHLBanks rose 86.9 percent to $469 million for the three-month period that ended Sept. 30, 2011. That was down from $732 million at the end of the third quarter 2010.For the first nine months of the year, the FHLBanks earned $1.08 billion, $305 million less than the Banks earned during the same time last year. The Office of Finance attributed the changes to lower net interest income, partially offset by other non-interest losses and lower assessments.

The Federal Home Loan Bank system-wide minimum collateral-to-advances coverage ratio was 129 percent at year-end 2010, a 20 percentage point decrease from year-end 2009.The FHFA’s annual Report on Federal Home Loan Collateral Securing Advances – prepared for the Senate Committee on Banking, Housing and Urban Development and the House Financial Services Committee – analyzes, among other things, the ratios of subprime and nontraditional collateral to the total collateral.

A bill that would create a legislative framework for a covered bond market in the U.S., as well as a potential competitor for the Federal Home Loan Bank system, was introduced this week in the Senate, a counterpart to a long-standing covered bond bill awaiting final approval in the House.The United States Covered Bond Act, S. 1835, sponsored by Sens. Kay Hagan, D-NC, and Bob Corker, R-TN, is nearly identical to a House bill of the same name sponsored by Rep. Scott Garrett, R-NJ, and Carolyn Maloney, D-NY, H.R. 940.

Fannie Mae and Freddie Mac each lost much more in the third quarter of 2011 than during the previous three month period and more than one year ago as the two GSEs reported significant derivatives losses.On a combined basis, Fannie and Freddie lost $9.5 billion in the third quarter, compared to a $5.0 billion loss in the second quarter and $3.8 billion in losses during the same period a year ago.