The Treasury Department announced this week that the Home Affordable Modification Program and related initiatives will be extended again, this time until at least the end of 2016. HAMP activity has declined fairly steadily since 2010 but received a boost recently due to changes by the FHA. “We need to be there for homeowners facing foreclosure, those who are struggling with increasing interest rates on their modified mortgages and those whose homes are ...

A spike in mortgage interest rates similar to what occurred in 2013 is possible, according to economists at the Federal Housing Finance Agency. The May-June 2013 spike caught many lenders off guard and put a crimp in mortgage banking profitability. The direction mortgage interest rates are likely to head is heavily tied to the anticipations of market participants, according to Saty Patrabansh, a senior economist at the FHFA, along with William Doerner and Samuel Asin ...

Secondary market mortgage sales – the lifeblood of mortgage banking income – declined sharply during the first quarter of 2014, according to an Inside Mortgage Trends analysis of bank call reports. Commercial banks and savings institutions sold just $125.7 billion in single-family home loans through their mortgage banking operations during the first three months of this year. That was down 31.1 percent from the fourth quarter and marked the slowest ... [Includes one data chart]

A new audit released this week by the Federal Housing Finance Agency’s official watchdog found that Fannie Mae and Freddie Mac suffered $158 million of “financial harm” due to excessively priced lender-placed or “force-placed” insurance policies in 2012 alone. The FHFA-OIG audit notes that several state financial regulators found that the LPI rates in their states were excessive. The excessive costs were driven up by “profit-sharing arrangements under which servicers were paid to steer business to LPI providers. Such arrangements often took the form of commission structures and reinsurance deals,” according to the OIG.

The Federal Housing Finance Agency late last week announced it reached a nearly $100 million settlement with RBS Securities to settle allegations tied to non-agency MBS bought by Freddie Mac from 2005 to 2007, but the deal represents just a fraction of the firm’s remaining exposure. The $99.5 million settlement only resolves claims against RBS in FHFA v. Ally Financial Inc. in the Southern District of New York. Ally Financial is the successor company to GMAC-RFC, a now defunct non-agency MBS issuer.

Fannie Mae and Freddie Mac are expected to continue issuing more risk-transfer deals even though both GSEs have effectively reached their 2014 targets. But some of the potential upside for investors has dissipated, according to separate analyses by Fitch Ratings and Wells Fargo Securities. Tight pricing on mortgage risk transfer securities issued by Fannie and Freddie indicates a “growing appetite for this relatively new and unique form of mortgage risk,” noted Fitch.

A recently issued advisory by Fannie Mae’s and Freddie Mac’s conservator noting that the two GSEs should only approve mortgage servicing sales where the transactions “are consistent” sound business practices comes as part of a renewed federal and state focus on servicing, officials note. Although Fannie and Freddie have, for years, had minimum capital requirements for mortgage companies that want to become seller/servicers, the Federal Housing Finance Agency and state regulators are now exploring codifying a capital minimum for nonbanks, according to industry officials and state regulators.

Any action that the Federal Housing Finance Agency takes in setting GSE guaranty fees should take into account the agency’s conservatorship duty to direct economic stakeholders, including shareholders, noted a coalition of Fannie Mae and Freddie Mac investors. In a letter to FHFA Director Mel Watt Wednesday, Investors Unite Executive Director Tim Pagliara urged the agency head to take into account “the critical purpose of setting appropriate guaranty fees,” noting that the Finance Agency does not have a mandate as conservator to run Fannie and Freddie as not-for-profit entities.

Fannie Mae and Freddie Mac in May resumed a more than year-long streak of declines with monthly decreases in the volume of single-family mortgages securitized by the two GSEs, according to a new Inside The GSEs analysis. Fannie and Freddie issued $44.8 billion in single-family mortgage-backed securities in May, a 1.3 percent decrease from the previous month. April’s $45.4 billion issuance proved to be just a brief reversal to the longer trend.