In keeping with its strategy to reduce its holdings of less-liquid assets, Freddie Mac announced last week the GSE’s first sale of what it calls “deeply” delinquent loans. It remains to be seen if the sale of the $659 million package of distressed single-family mortgages from its portfolio is a one-off or the first of more to come. Asked whether more non-performing loan auctions might be ahead, a company spokesman declined to comment.

A federal judge in Manhattan last week ordered Bank of America to pay a $1.27 billion penalty for losses suffered by Fannie Mae and Freddie Mac from Countrywide Financial’s “Hustle” program for pumping dubious Alt A loans to the GSEs. The bank also is reportedly nearing a settlement with the Justice Department over other charges. Last October, the DOJ and the Securities and Exchange Commission successfully proved in court that Fannie Mae and Freddie Mac lost some $850 million from thousands of loans acquired through Countrywide’s “high-speed swim lane” program – known as HSSL or “Hustle.”

Federal Housing Finance Agency Director Mel Watt so far is holding the line on Fannie Mae’s and Freddie Mac’s blanket prohibition on principal reduction, but mounting pressure from progressives in and out of Congress have industry observers predicting a policy shift soon. Since taking office as the FHFA’s head in January, former Rep. Mel Watt, D-NC, has so far been a disappointment to his former Democrat colleagues and advocates who believed he would reverse the agency’s principal reduction stance set by former Acting Director Edward DeMarco.

Less than a week before its deadline, the Federal Housing Finance Agency announced last week that it is extending the comment period for guaranty fees charged by Fannie Mae and Freddie Mac. In June, the FHFA issued a call for public comment on how the GSEs should calculate g-fees and whether the Finance Agency should proceed with a 10 basis point g-fee hike announced last year. In one of his first acts as FHFA Director in January, Mel Watt ordered the g-fee hike postponed pending further study.

Mortgage buybacks and indemnifications may be off their peak in terms of volume, but they are widely expected to continue for the foreseeable future, especially for Fannie Mae and Freddie Mac loans, according to experts during a webinar sponsored by Inside Mortgage Finance Publications last week. Amanda Raines, a partner in the Washington, DC, office of the BuckleySandler law firm, told webinar participants that more buybacks are definitely on the way. On the Fannie /Freddie front, the attorney pointed out that despite recent settlements, the Federal Housing Finance Agency’s Office of Inspector General encouraged the continued pursuit of buyback claims and repurchase rights.

It could cost Goldman Sachs between $800 million and $1.25 billion to resolve government claims that it sold faulty mortgage-backed securities to Fannie Mae and Freddie Mac leading up to the financial crisis, according to recent reports. Goldman Sachs is currently negotiating with the Federal Housing Finance Agency, which has recovered approximately $16.1 billion in agreements with other banks with respect to legacy MBS sold to the GSEs.In September 2011, the FHFA filed 18 separate lawsuits against some of the nation’s biggest banks, accusing them of misrepresenting some $180 billion in toxic subprime MBS.

Freddie Announces 9th Multifamily Securities Offering of 2014, K-F04. Freddie Mac announced this week a new offering of Structured Pass-Through Certificates or K Certificates, backed exclusively by LIBOR-based, floating-rate multifamily mortgages with five- and seven-year terms. The GSE expects to offer approximately $1.2 billion in K Certificates, which priced on Aug. 6 and is expected to settle on or about August 25. This is Freddie’s ninth K Certificate offering this year. The GSE said it also reached an important milestone of securitizing more than $80 billion in multifamily mortgages through its K-Deal program.

Fannie Mae and Freddie Mac reported a combined $5.0 billion in net income during the second quarter of 2014, down 46.2 percent from the first three months of the year. Compared to the first half of 2013, GSE profits were down nearly 82 percent, though both companies posted strong earnings during the three-month period ending June 30, 2014. Both GSEs are coming off a banner 2013 when each company’s earnings were super-charged by several one-time items – including the capture of each company’s deferred tax allowance, and numerous non-agency lawsuit settlements.

Multiple news organizations reported on Wednesday that Bank of America and the Department of Justice are on the verge of agreeing to a settlement valued in excess of $16 billion that would bring to a close mortgage claims stemming from the lead-up to the financial crisis.

The Consumer Financial Protection Bureau and 25 states filed amicus briefs in a case pending before the Supreme Court of the United States, Jesinoski v. Countrywide Home Loans Inc., that could resolve a circuit split over the recession of a mortgage under the Truth in Lending Act.