The Federal Housing Finance Agency should “immediately withdraw” its proposal to impose additional, upfront guaranty fees on Fannie Mae and Freddie Mac mortgages in states that have unusually slow foreclosure timelines because it unfairly penalizes homeowners with higher costs for forces beyond their control, according to Connecticut’s congressional delegation. The Nutmeg State’s five congressmen and two senators dispatched a letter to the Finance Agency this week urging the FHFA to scrap its proposal issued in September targeting five states – Connecticut, Florida, Illinois, New Jersey and New York – for an additional, one-shot guaranty fee of between 15 and 30 basis points in 2013.

MGIC Investment Corp. announced last week it will pay Freddie Mac $267.5 million to settle their prolonged dispute over pool mortgage insurance coverage. The settlement was a condition set by the GSE to allow a new unit of MGIC to underwrite mortgages in seven states, though the MI said it won’t sign the deal until Freddie approves MGIC’s newly capitalized unit to write insurance.

A federal judge has allowed legal claims by current and former Fannie Mae employees over their employee stock ownership plan losses to proceed against several company directors including former CEO Daniel Mudd, as well as members of Fannie’s benefits plan committee. Lead plaintiffs Mary Moore and David Gwyer, who brought their claims against Fannie in 2009, seek compensation for losses on company stock that remained in employees’ retirement plans between April 2008 and May 2010. The government took over Fannie in September 2008 and put the GSE into conservatorship.

Two Harbors Investment and PennyMac Mortgage Investment Trust have seen healthy returns on their previous investments in vintage non-agency mortgage-backed securities but the real estate investment trusts have recently turned to other investments. Two Harbors has concentrated on agency MBS purchases while slowly ramping up jumbo loan purchases with an eye toward issuing its own MBS. PennyMac, meanwhile, shifted away from non-agency MBS purchases to correspondent lending and investing in ...

Community mortgage lenders increasingly anxious about complying with a growing regulatory burden got a strong show of support recently when Federal Reserve Board Governor Elizabeth Duke called for giving them a separate oversight regime that respects their unique differences when compared to their much larger competitors. “I am convinced that the best course for policymakers would be to abandon efforts for a one-size-fits-all approach to mortgage lending,” Duke said during a community bank symposium ...

A commissioned study of Ellie Mae’s Encompass360 has confirmed what the company’s clients have been saying all along: the popular software helps lower the total cost of originating mortgage loans. According to the study conducted by Forrester Consulting, a global research and advisory firm in Cambridge, MA, users of Encompass360 realized benefits in improved compliance and greater efficiency as well as a 57 percent return-on-investment (ROI) based on a three-year, risk-adjusted cash flow. Improved ...

Private mortgage insurers posted an impressive 26.5 percent increase in new insurance written during the third quarter of 2012, but four of the industry’s six active firms are gradually taking market share away from their rivals. Private MIs insured $51.76 billion in new mortgage originations during the third quarter, according to a new Inside Mortgage Finance ranking and analysis, making it the strongest quarter for the beleaguered industry since the second quarter of 2008. FHA and VA lending grew at a much slower pace, climbing just 2.1 percent and 4.0 percent, respectively, during the third quarter. The result was...[Includes two data charts]

The private mortgage insurance industry is expressing optimism with the positive changes seen lately in the housing market while hoping that Congress or the Obama administration do nothing to impede or spoil the market’s recovery. Industry executives say stabilizing home values, low interest rates, better quality mortgages and a shrinking FHA share of the mortgage market are helping MIs win back market share and write new business. “Everybody is trying to write as much business as they can to regain share,” said Michael Zimmerman, senior vice president for investor relations at Mortgage Guarany Insurance Corp. New insurance written is...

Fannie Mae and Freddie Mac reported a sharp decline in the volume of mortgage repurchases and indemnifications made by lenders during the third quarter, as well as a slowdown in the volume of new buyback demands, according to a new Inside Mortgage Finance analysis of data reported by the two government-sponsored enterprises in financial reports released last week. During the third quarter, lenders repurchased or otherwise indemnified the GSEs for $4.396 billion of mortgages that had been subject to buyback demands, a decline of 26.0 percent from the second quarter. It was the lowest repurchase volume since the first three months of last year. On a year-to-date basis, repurchases are...[Includes one data chart]

Reportedly dire findings of the annual independent audit of the FHA insurance fund due for release late this week may set off alarms in Congress and calls for reform but not a taxpayer rescue as some FHA critics have suggested, according to the Mortgage Bankers Association. Recent news reports indicated that the fiscal 2012 actuarial review of the FHA’s Mutual Mortgage Insurance Fund will show a negative economic value or capital reserve position, which some say could require the Treasury to bail out the FHA to boost its claims-paying ability. There is speculation that the fund could go from a predicted economic value of positive $9.4 billion in last year’s study to as much as negative $10 billion this year. A deficit should not be...