During the past three years, the GSEs have steadily increased their commercial mortgage-backed security issuance, assuming a role of dominance that private investment banks once held, concluded a recent report by Standard & Poor’s Ratings Services.

Fannie Mae and Freddie Mac loan modification and overall loss mitigation activity declined again in the second quarter, driven by decreases in completed loan mods and forbearance plans and continuing a downward trend begun a year ago, a new analysis of data from the Federal Housing Finance Agency by Inside The GSEs finds. Total loss mitigation activity – total home retention efforts and foreclosure alternatives combined – slipped 1.5 percent in the second quarter of the year to 246,879 and was down 34.3 percent from year ago levels. Our analysis was based on the FHFA’s Second Quarter 2011 Foreclosure Prevention & Refinance Report.

In order to provide a benchmark that helps the private sector price mortgage credit, policy makers need to make an effort to replicate the standardization and uniformity currently provided by agency mortgage-backed securities, the managing director of Barclays Capital told lawmakers last week.

Two Ohio pension funds have filed suit in federal court against the Federal Housing Finance Agency to overturn a recent Finance Agency rule that could curtail any award for damages the funds might someday receive in their securities fraud suit against Fannie Mae. In papers filed in the U.S. District Court, District of Columbia, lawyers for the Ohio Public Employees Retirement System and the State Teachers Retirement System of Ohio disputed a final rule issued…

Fannie Mae and Freddie Mac are reportedly in talks with the Securities and Exchange Commission to settle claims that the two GSEs failed to disclose to investors the companies’ exposure to risky subprime mortgages prior to the 2008 housing market crash.

A group of three dozen lawmakers from both parties have issued a last-ditch appeal to House appropriators to take action to extend the temporarily increased conforming loan limits that are set to expire at the end of this month. Unless Congress intervenes, the “emergency” high cost conforming loans limits that were enacted in 2008 for Fannie Mae, Freddie Mac and the FHA will expire on Oct. 1.

The massive legal action that the Federal Housing Finance Agency has initiated against many of the nation’s big lenders on behalf of Fannie Mae and Freddie Mac needs to be resolved forthwith, says an industry attorney, before a prolonged litigation “feeding frenzy” and resulting uncertainty paralyze mortgage market participants.Two weeks ago, the Finance Agency filed legal papers contending that the 17 financial institutions which sold Fannie and Freddie $196 billion of mortgage-backed securities, mostly between 2005 and 2008, duped the GSEs into buying tens of billions of dollars of MBS that went south after the housing bubble burst.

The chairman of the House Oversight and Government Reform Committee announced late this week that he has opened an investigation into a reported deal struck last month in which Fannie Mae agreed to buy some of Bank of America’s home-loan portfolio.In a letter sent to Federal Housing Finance Agency Acting Director Edward DeMarco, Rep. Darrell Issa, R-CA, requested the FHFA provide the committee documents and a “full explanation of the agency’s decision-making process” regarding the purchase.

The efforts of the White House, in concert with the Federal Housing Finance Agency, to jumpstart the underperforming GSE refinance program is almost certain to disappoint when final details are made public, due in no small part to overpromised and inflated expectations, say mortgage market watchers.FHFA Acting Director Edward DeMarco said his agency is “carefully reviewing” the two-year old Home Affordable Refinance Program with the White House in order to help a greater number of underwater Fannie Mae and Freddie Mac borrowers into lower-rate loans.

Fitch Ratings has finalized its new residential MBS loan loss model, with several additional enhancements designed to better address risks that drive defaults and losses, such as a new variable known as “sustainable loan-to-value,” which represents a borrower’s effective equity in the property. “When gauging credit risk for new U.S. residential mortgage loans, borrower equity is key,” explained Kevin Duignan, group managing director and head of U.S. structured finance for Fitch. “The core principle underpinning the framework is the interaction between borrower equity and market value declines in determining expected loss for...