Although the Federal Housing Finance Agency has taken steps to ensure that the GSEs’ mortgage purchases conform to certain underwriting standards, the Finance Agency’s oversight of underwriting standards is limited and requires more attention, the FHFA’s official watchdog concluded this week. The FHFA’s Office of Inspector General found in its audit of FHFA oversight of Fannie Mae’s single-family mortgage underwriting standards that the agency lacks a formal process for reviewing underwriting standards and variances. Instead, it informally reviews and comments on Fannie’s proposed credit policy changes.

Unless Congress takes legislative action by the end of the year, Fannie Mae and Freddie Mac’s “unlimited” pipeline of cash support from the U.S. Treasury will be significantly dialed back, a paper by Deutsche Bank cautions. Although agency mortgage market observers have assumed that the Treasury will extend the taxpayers’ unlimited line of credit to the GSEs before the Dec. 31 deadline, a close reading of the authorizing legislation suggests that the Treasury may not be able to extend unlimited support without the approval of Congress, noted Deutsche Bank.

The Home Affordable Refinance Program recorded a significant decrease in December despite the implementation of some new HARP 2.0 standards that took hold during the final month of 2011, according to the Federal Housing Finance Agency. The FHFA’s latest foreclosure prevention and refinance report released this week noted that all HARP refis fell 36 percent to 23,323 in December from 36,304 in November.

The Federal Housing Finance Agency is looking for two good chief executives who are willing to work a “thankless job” for substantially reduced pay and the chance to oversee the transition of Fannie Mae and Freddie Mac from private companies to government entities and perhaps eventually out of business altogether. Working closely with the two GSEs, the Finance Agency is in the midst of discussions with candidates to fill the CEO vacancies at both Fannie and Freddie, according to FHFA Acting Director Edward DeMarco.

The Federal Housing Finance Agency is calling for Fannie Mae and Freddie Mac to conduct an analysis of the viability of each company’s multifamily operations without government guarantees, suggesting the possibility of separating the two government-sponsored enterprises’ multifamily and single-family businesses. The GSEs’ mandated review of their multifamily operations is part of the FHFA’s 2012 “conservatorship scorecard” unveiled two weeks ago, which outlines the specific objectives and timelines for the Finance Agency’s strategic plan for the conservatorships of Fannie and Freddie. The multifamily...

Mounting fears that student loan debt will lead the way to the next credit crisis and legislative proposals to deal with those concerns appear to be having relatively little impact on the student loan ABS market, where new issuance has held fairly steady since the financial crisis. According to Bank of America Merrill Lynch analysts, the spreads for student loan ABS are attractive enough to “turn more positive on (the) private student loan sector.” New issuance of private student loan ABS fell off sharply following the financial crisis. Investors demanded higher risk premiums, said Jonathan...

Nearly half of the money spent by Fannie Mae and Freddie Mac at the 2011 annual convention of the Mortgage Bankers Association was of questionable value, according to a new report by the Inspector General of the Federal Housing Finance Agency. The two government-sponsored enterprises spent a total of $600,000 at the MBA annual convention last year, the IG said. That included $140,000 in MBA sponsorships and $140,415 in business meals and hosted dinners. Freddie paid $80,000 for “Platinum” level sponsorship at the event, and Fannie paid $60,000 to be listed as a “Gold” sponsor. The tangible benefits include...

A Senate subcommittee chairman has called upon the Federal Housing Finance Agency to recalculate and resubmit its principal reduction analysis to account for the Obama administration’s proposed enhanced incentives after an expert testified last week about a number of flaws in the study the FHFA used to justify its policy stance against writedowns of Fannie Mae and Freddie Mac loans. Sen. Robert Menendez, D-NJ, called for the FHFA do-over during a hearing of the Senate Banking Subcommittee on Housing Transportation and Community Development, where Amherst Securities’ Laurie Goodman said there...

The feds aren’t done cracking down on mortgage servicers and before the smoke clears, more than a half dozen companies are going to be facing fines that have been pending since federal regulators announced their servicing consent decrees last April, an official from the Federal Reserve told members of Congress this week. Last month, the Fed announced it had assessed monetary sanctions totaling $766.5 million against Ally Financial, Bank of America, Citigroup, JPMorgan Chase and Wells Fargo for failing to appropriately oversee their subsidiaries’ mortgage loan servicing and foreclosure processing...