New issuance of single-family MBS and non-mortgage ABS fell sharply in the fourth quarter of 2013 as mortgage refinance activity continued to decline and ABS production ended the year quietly, according to a new Inside MBS & ABS analysis. Monthly production of single-family MBS went into a steady, year-long decline at the beginning of 2013. In December, total single-family MBS issuance fell to just $77.1 billion, the lowest monthly production figure since July 2011. December marked the third straight month with MBS issuance below $100 billion, and it gave the fourth quarter an anemic $254.8 billion in total issuance – a two-and-a-half-year low. Although Freddie Mac scored a minor increase in December, the agency MBS market fell...[Includes two data charts]

Some lawmakers and non-agency interests are not happy with new Federal Housing Finance Agency Director Mel Watt’s move this week to delay a planned 10 basis point increase in the government-sponsored enterprises’ MBS guaranty fees. Two days after he was sworn in to a five-year term as FHFA director, Watt followed through on a promise he made late last month to delay then FHFA Acting Director Edward DeMarco’s announced 10 bps g-fee hike. Watt promised sellers at least 120 days before implementing any changes. The g-fee increase was set...

Sens. Bob Corker, R-TN, and Mark Warner, D-VA, said this week they are unmoved by arguments that the government-sponsored enterprises have all but repaid the capital fronted by the federal government and that future GSE profits should be directed to GSE shareholders, including hedge funds that have increased their holdings in recent months. “We respect the Constitution, and we understand there are some issues that need to be worked through. But at the end of the day, the GSEs would have no value whatsoever had the government not stepped in,” Corker said at a discussion hosted by the Financial Services Roundtable. He told shareholders – such as Pershing Square Capital Management and Fairholme Funds – to file lawsuits against the federal government. “Go through the courts and seek legal remedy,” Corker said. Warner said...

If a GSE reform bill doesn’t at least move out of committee – even better, clear a vote on the Senate floor this year – lawmakers and experts agreed this week that the window to cement a meaningful legislative solution to Fannie Mae and Freddie Mac is in danger of closing. Speaking at a Financial Services Roundtable Housing Policy Council forum on GSE reform, Sens. Bob Corker, R-TN, and Mark Warner, D-VA, said they would very much like to see a mark-up of their bill, the Housing Finance Reform and Taxpayer Protection Act, S. 1217, sooner rather than later.

Two days after he was sworn in to a five-year term as the Federal Housing Finance Agency’s new director, Mel Watt followed through on a pledge he made last month following his Senate confirmation and officially delayed a GSE guaranty fee increase. Watt this week countermanded a move by his predecessor, then-Acting Director Edward DeMarco, who announced in December a number of GSE pricing structure changes.

In 2014, lawmakers and the Obama administration will no longer be able to avoid confronting claims by GSE shareholders seeking recovery, says an expert. This week, while attending a Financial Services Roundtable Housing Policy Council forum on GSE reform, financial industry consultant Bert Ely quizzed Sens. Bob Corker, R-TN, and Mark Warner, D-VA, about GSE securities.

In what has become a familiar ritual, a coalition of nine industry groups dispatched a letter Wednesday to congressional leaders reiterating their opposition to the use of GSE guaranty fees to offset other budget provisions. This time, Congress is considering tapping GSE g-fees as lawmakers look toward an extension of unemployment benefits, which expired on Dec. 31.

Fannie Mae and Freddie Mac rushed to wrap up their legacy loan issues as 2013 wound to a close with multiple announcements of buyback settlements tied to loans originated prior to 2009. On Dec. 30, Fannie announced a $591 million agreement with Wells Fargo to resolve repurchase requests on certain loans originated prior to 2009.

Some GSE watchers fear that new Federal Housing Finance Agency director Mel Watt might slow GSE risk sharing deals but those concerns may be unwarranted.

Fannie, Freddie and their regulator have been dogged in their pursuit of claims against banks that sold defective mortgages to the GSEs prior the financial crisis.