Fannie Mae and Freddie Mac mortgages originated in five states that have unusually slow foreclosure timelines would be subject to an additional, upfront guaranty fee, according to a proposal unveiled late this week by the Federal Housing Finance Agency. If implemented, the Finance Agency’s proposal would target 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. “The size of the fee adjustments are intended to reflect the disparity in costs, as compared to the national average,” explained the FHFA.

Although all of Fannie Mae’s nearly 700 real estate-owned properties sold earlier this month as part of the Federal Housing Finance Agency’s first announced REO pilot transaction moved at near or above market value, a market analyst says it remains to be seen whether this deal is the shape of things to come. San Diego-based Pacifica Companies LLC was the winning bidder of 699 Fannie properties throughout Florida. The firm paid $12.3 million for a share in a joint venture with Fannie, resulting in an estimated transaction valuation to the GSE of $78.1 million or nearly 96 percent of the properties’ estimated value, according to the transaction summary.

Fannie Mae announced this week it has tapped Bradley Lerman to be the GSE’s new executive vice president, general counsel and corporate secretary. Lerman, 56, joins Fannie Mae from Pfizer where he was senior vice president, associate general counsel and chief litigation counsel.Lerman replaces Timothy Mayopoulos, who was promoted to CEO in June.

The Federal Housing Finance Agency is currently pondering how, or whether, the GSE conservator will intervene in the controversial and ever more contentious proposal to use local eminent domain laws to effect principal reduction for homeowners by seizing mortgage loans. Early last month, the FHFA cited “significant concerns” about the eminent domain proposals, warning that “action might be necessary” on its part to avoid a risk to the safe and sound operations of Fannie Mae and Freddie Mac, as well as to avoid taxpayer expense. Some 74 organizations and members responded to FHFA’s request for input and submitted comment letters. “The acting director will consider the input received in making a final decision,” said a Finance Agency spokesman.

The new “framework” governing Fannie Mae and Freddie Mac repurchase demand activity may have a relatively modest impact on an issue that has been a major factor in the mortgage market over the past few years. Analysts suggest that lenders will be cautious about changing origination strategies that have focused on minimizing buyback risk until they see how the government-sponsored enterprises implement the new policy. Many observers remain concerned about how the GSEs will respond to ongoing pressure from their regulator – and the Office of the Inspector General – to ...

House Republicans this week made a surprise effort to advance a forgotten GSE reform bill with nominal bipartisan support directly to the House floor. It’s unclear whether the effort will succeed but an industry lobbyist says the move was an exercise in futility nonetheless. H.R. 2440, the Market Transparency and Taxpayer Protection Act, from Rep. Robert Hurt, R-VA, was one of more than two dozen “suspension” bills added to the lineup of expected quick and easy votes. In the House, suspension of the rules is a procedure generally used to quickly pass non-controversial bills. H.R. 2440 had not been advanced for a vote as Inside The GSEs went to press.

The Federal Housing Finance Agency’s official watchdog is advising the regulator to apply greater scrutiny to Fannie Mae as it works on a “promising initiative” to shift poor performing GSE loans to more capable financial institutions. This week’s report by the FHFA’s Office of Inspector General found little fault with a controversial transaction last summer between Fannie and Bank of America under the GSE’s High Touch Servicing Program. However, the OIG concluded that there was room for improvement in the FHFA’s and Fannie’s supervision of the program.

Mortgage banking operations affiliated with banks and thrifts sold a hefty $360.0 billion of home loans during the second quarter, according to a new Inside Mortgage Trends analysis of call report data. While that marked one of the busiest markets since the end of 2010, volume was down 3.9 percent from the first three months of the year. Secondary marketing gains account for the lion’s share of mortgage banking profits as lenders do not recoup enough in origination fees to ... [Includes one data chart]

A growing number of market indicators suggest that the U.S. housing market has bottomed out and is on the way back and perhaps even beginning to drive economic activity. “Housing, once the Achilles’ heel of the U.S. economy, is starting to look like a source of strength in a recovery that has lost its vigor as well as still facing significant roadblocks,” said Celia Chen, senior director at Moody’s Analytics, in a new analysis. “That housing is now a bright spot speaks more about the weakness of the ...

The new representation and warranty framework for GSE loans announced last week by the Federal Housing Finance Agency will go far to providing a clearer picture of prospective putbacks on loans delivered to the GSEs starting next year but more is needed, analysts conclude. At the FHFA’s direction, Fannie Mae and Freddie Mac are implementing a new rep and warrant framework for all conventional loans funded, acquired, securitized or guaranteed on or after Jan. 1, 2013. The new framework places greater emphasis on quality control review processes to be applied when the loans are delivered to the GSEs earlier in the loan process and improves the clarity around repurchase requests, noted Fitch Ratings.