Congress needs to quit pickpocketing Fannie Mae and Freddie Mac by diverting guaranty fees from the government-sponsored enterprises to pay for purposes unrelated to housing or risk derailing the fledgling housing market recovery, warn industry groups. The House last week approved H.R. 1629, the STEM Jobs Act of 2012, which would provide visas for qualified workers in the fields of science, technology, engineering and mathematics (STEM). A manager’s amendment after the bill was sent to the House Rules Committee tacked on a “payfor” requiring the GSEs to increase their g-fees to cover the cost of implementing the bill. “We appreciate...

The mortgage finance industry is getting antsy because the much-anticipated ability-to-repay final rule still has yet to be released by the Consumer Financial Protection Bureau, even though it was widely expected to come out after the election, perhaps by Thanksgiving. The bureau does not have a specific release date yet, but officials still expect it to happen before the statutory deadline of Jan. 21, 2013. Lenders are pretty amped up...

The state of emergency in the U.S. mortgage market lives on for another year, as the Federal Housing Finance Agency announced that conforming loan limits will remain as they are for 2013. The agency didn’t have much say in the matter, since Congress in late 2011 extended the “emergency” loan limits for Fannie Mae, Freddie Mac and the FHA through the end of 2013. Lawmakers did lower the top Fannie/Freddie loan in high-cost markets of the lower 48 states to $625,500, while the top-end FHA loan is still $729,750. Although the FHA has not yet announced...

Thanks to the Federal Reserve’s aggressive support for the agency mortgage market and continuing strength in the refinance program for underwater Fannie Mae and Freddie Mac borrowers, mortgage refi activity has accounted for 73.1 percent of 2012’s surging production volume. But home-purchase lending started to regain some market share during the third quarter of 2012, according to a new Inside Mortgage Finance ranking and analysis. An estimated $143 billion of home-purchase mortgages were originated during the third quarter, up 10.9 percent from the previous three-month period. By comparison, refinance production was up just 2.8 percent from the second quarter. The purchase-mortgage sector still has...[Includes three data charts]

The Home Affordable Refinance Program hit record levels in the third quarter of 2012, with 286,044 Fannie Mae and Freddie Mac borrowers taking advantage of the program designed for underwater borrowers. That was up 17.8 percent from the second quarter and raised total participation in the program to 1.73 million since it began back in 2009. The biggest gains this year have been in the refinances of mortgages with loan-to-value ratios exceeding 105 percent [Includes one data chart] ...

An examination of how quickly the distressed real estate inventory dissipates in three Northeast states suggests that federal policymakers need to pay much more attention to local mortgage market conditions when formulating policy, one researcher says. “A critical issue in today’s housing market concerns both the size of the distressed real estate inventory and the speed at which it will dissolve,” said James Follain, principal of James R Follain LLC and contributing editor to ...

The major servicers use three different models to implement single point of contact requirements, with no clear answer as to which model is the best, according to a new report from the Treasury Department. Servicers report seeing benefits from SPOC requirements though there are also concerns with the new servicing model. A SPOC works with a borrower to determine options throughout the loss mitigation process. The Treasury requires servicers participating in the Home Affordable Modification Program to ...

Fannie Mae and Freddie Mac earlier this month announced new, synchronized requirements regarding the management of law firms for default servicing, bankruptcies, foreclosures and related litigation involving mortgages owned or guaranteed by the two GSEs. Effective June 1, 2013, Fannie’s and Freddie’s servicers will be allowed to choose their own attorneys, create their own processes for managing foreclosure processing and maintain direct relationships with their law firms. The new rules also require servicers to establish procedures to manage and monitor all aspects of the law firm’s performance and compliance with applicable requirements. Upon request, servicers will be required to perform a due diligence review and notify the GSEs of the result.Fannie’s and Freddie’s new rules were issued at the direction of the GSEs’ conservator, the Federal Housing Finance Agency. The directive comes more than a year after the FHFA’s Office of Inspector General dinged the agency for lax oversight of the GSEs and problems involving improper foreclosure practices with their affiliated law firms.

For the third time in as many months, a federal judge has summarily dismissed a securities class action lawsuit against a former Fannie Mae executive. U.S. District Judge Richard Leon threw out the case against Leanne Spencer, Fannie’s former controller, brought nearly a decade ago by investors hoping to recover damages. Two Ohio pension funds – the Ohio Public Employees Retirement System and the State Teachers Retirement System of Ohio – filed suit in 2004 related to a $6.3 billion overstatement of earnings against Fannie and three former GSE executives, including CEO Franklin Raines.

Valuation of mortgage servicing rights has been challenging for many market participants, particularly with the incredible pace of change occurring in the mortgage servicing industry. Hence, it is important for servicers to have the basic building blocks to a solid MSR valuation process and a full understanding of the company for pricing and valuation purposes, suggests a recent study from PricewaterhouseCoopers. PwC noted that MSR valuations for seasoned portfolios have dropped ...