The 12 member “super committee” of House and Senate members tasked with tackling debt reduction should seriously consider raising the guarantee fees charged by Fannie Mae and Freddie Mac as one way to reduce government expenditures, according to the chairman of the House Financial Services Committee. In a letter to the members of the Joint Select Committee to Reduce the Deficit, Rep. Spencer Bachus, R-AL, said the committee should consider raising the premiums the GSEs charge lenders to insure against the risk that borrowers will fail to repay their loans to something even higher than the White House and regulators have proposed.

The chairman of the House subcommittee that oversees the GSEs unveiled a bill late this week that seeks to drastically overhaul the secondary mortgage market – without the need for Fannie Mae or Freddie Mac.The Private Mortgage Market Act would create a heavily regulated mortgage-backed securities market consisting strictly of private entities functioning without a federal guarantee, according to Rep. Scott Garrett, R-NJ.Garrett, who chairs the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, said the goal of his legislation is to facilitate continued standardization and uniformity, ensure rule of law and provide MBS investors with the necessary transparency and standardization to ensure “that a deep and liquid market develops” without Fannie and Freddie.

Fannie Mae earlier this month released additional results of its new servicer evaluation program for the first half of 2011, noting that 11 out of 13 servicers in this peer group are considered on track to meet at least median performance levels.In February, Fannie rolled out its Servicer Total Achievement and Rewards (STAR) program, designed to encourage customer service improvements and better foreclosure prevention outcomes for homeowners by rating servicers on their performance in those areas. Fannie categorizes servicers into three peer groups based on the number of loans they service, with each servicer scored using the Servicer Performance Scorecard. STAR ratings are based on a five-star scale.

Long awaited alterations to the Home Affordable Refinance Program announced by the Federal Housing Finance Agency this week are expected to be of some relief to underwater homeowners but it will do little to endear the Finance Agency to its critics, particularly among House Democrats, who think the FHFA should do more.Among the new HARP enhancements is the elimination of certain risk-based fees for borrowers who refinance into shorter-term mortgages and lower fees for other borrowers. Also removed is the current 125 percent loan-to-value ceiling for fixed rate mortgages backed by the government-sponsored enterprises.

In a major shakeup of its executive suite, Freddie Mac’s chief executive will step down next year while three members of the GSE’s board of directors are also headed for the exits, the Federal Housing Finance Agency announced this week.Freddie CEO Charles Haldeman Jr. informed the board of his desire “to step down sometime in the coming year,” according to the FHFA announcement. Freddie did not comment on Haldeman’s resignation, nor did it make the announcement itself, referring to the Finance Agency’s official press release in its Securities and Exchange Commission 8K filing this week.

The European debt crisis, following not far behind the global financial market meltdown of a few years ago, has put more pressure on the covered bond market, but analysts at the ABS East conference sponsored by Information Management Network said the sector is holding up well and gaining more acceptance in other countries. Covered bonds have not been completely unscathed, said Michael Durrer, a partner at Sidley Austin LLP. But Canada is starting up a covered bond market, Australia has recently enacted legislation, New Zealand has seen its first transactions and Belgium – the last European...

Fannie Mae and Freddie Mac’s total taxpayer cash infusion could top as much as $311 billion by the end of 2014 – a “savings” of some $52 billion from similar projections one year ago, according to the Federal Housing Finance Agency.The FHFA this week released its updated projections of the financial performance of the two GSEs, including potential draws under the Senior Preferred Stock Purchase Agreements with the Treasury Department. "The projections have been updated to reflect the current outlook for house prices, interest rates, and recent trends toward borrower behavior,” explained the FHFA.

President Obama nominated Carol Galante to become the next Commissioner of the FHA, an agency that continues to adjust to a bigger role in the mortgage market. Galante has served as deputy assistant secretary for multifamily housing at the Department of Housing and Urban Development since 2009 and has filled in as acting FHA commissioner since the departure of David Stevens. She worked for nearly a quarter of a century at BRIDGE Housing, a company that specializes in affordable housing development. Galante definitely has the management and leadership experience for the post, said Brian Chappelle, co-founder of Potomac Partners LLC. “If...

Private mortgage insurer PMI Group Inc. is assessing its options, including a possible restructuring, after state regulators seized its main unit, PMI Mortgage Insurance Co., last week. Headquartered in Walnut Creek, CA, but incorporated in Arizona, the company was seized by Christina Urias, director of the Arizona Department of Insurance, two months after it was placed under regulatory supervision following a recent “rapid increase in losses that has adversely affected its solvency and that of its affiliates.” On its website, PMI Group informed its clients that Urias has obtained an order “directing full and exclusive...

The mortgage lending industry is more likely to see a return to higher FHA loan limits than higher Fannie Mae and Freddie Mac limits, after the Senate gave its approval to legislation that would restore higher conforming loan levels all the way around, according to one top industry lobbyist. Late last week, the Senate voted 60-38 to approve a federal spending bill that included an amendment sponsored by Sens. Bob Menendez, D-NJ, and Johnny Isakson, R-GA, that would reinstate the higher loan limits for the government-sponsored enterprises and the FHA that ended on Sept. 30. Those limits dropped from a maximum of...