“I think Nationstar is going through the pain and agony of the production decline,” said one advisor familiar with the company.

In case you didn’t notice, the price of Fannie and Freddie common rose about 5 percent Tuesday, after Watt spoke. In trading Wednesday, they were up again...

“This decision is motivated by concerns about how such a reduction could adversely impact the health of the current housing finance market,” said FHFA Director Mel Watt.

Brett Nicholas, president of Redwood Trust, said the real estate investment trust plans to issue its next jumbo MBS around June.

In his comments to reporters, FHFA Director Mel Watt did not rule out Fannie and Freddie engaging in principal reductions to help troubled consumers who have GSE loans.

Compare ratios have been criticized by some factions of the mortgage industry. Some lenders have complained that the ratio is one reason why originators do not target underserved markets.

In a wide-ranging speech – and in supporting documents – Mel Watt also vowed that the GSEs will continue to permit “compensating factors” when weighing a decision to guarantee mortgages where the debt-to-income ratio is north of 43 percent.

Residential originators are getting more confident about lending outside the parameters of the qualified mortgage rule.

On the M&A front, a new report from Compass Point Research & Trading estimates that if PHH Corp. finds a way to sell its mortgage and fleet divisions, the stock should be worth $30 a share.

Banks were largely unwilling to sell off HEL holdings in 2013, according to MountainView Capital Group, an advisor on whole loan sales.