A proposed bipartisan bill that would dissolve Fannie Mae and Freddie Mac but retain an explicit government guarantee for certain mortgage-backed securities is either dangerously unfeasible or it's a measured way to preserve the government's role in housing finance, along with the 30-year mortgage, according to industry observers. Filed last late week, H.R. 1859, the Housing Finance Reform Act of 2011, would phase out the government-sponsored enterprises within five years and replace them with privately capitalized entities authorized to issue MBS that carry a government guarantee. The bill would empower the Federal Housing Finance Agency to issue...

Correspondent lending has taken a chunk of market share away from the broker channel, and smaller banks are jumping at the opportunity to become correspondent lenders to fill the spaces that too-big-to-fail lenders have overlooked or ignored. NexBank is among those trying to fill the gap. The North Texas state savings bank has announced a new wholesale correspondent channel aimed at offering mortgage brokers a chance to serve as mortgage bankers to their customers. NexBank is also looking to partner with community banks that have the balance sheet or warehouse line to fund loans but do not have the ability or desire to underwrite the loans. As a partner...

Two California members of the House, one Republican, one Democrat, have introduced a bill to extend indefinitely high-cost loan limits for Fannie Mae, Freddie Mac and the FHA due to expire this fall.

A federal appeals court last week upheld a lower court ruling that shareholders of Freddie Mac cannot sue the former directors and officers of the GSE for losses following the government takeover of Freddie by the Federal Housing Finance Agency.

Mortgage servicers should already be in the process of preparing to implement Fannie Mae and Freddie Mac's soon-to-be unveiled servicing requirements as the two GSEs work to roll out new rules in the coming weeks.

Lawmakers on a House subcommittee last week approved by a wide bipartisan margin a bill that would create a legislative framework for a covered bond market in the U.S. and, some critics contend, an unnecessary competitor to the Federal Home Loan Bank system.

Government housing policy and agencies played a much larger role in the housing crisis than initially believed, but a fresh look at the conclusions of two GSE critics has prompted a top JPMorgan Chase analyst to take the unusual step of issuing a public retraction.

Faced with a declining originations outlook, mortgage lenders should take advantage of today's more plentiful warehouse lending environment to review strategies that were developed during the liquidity crisis, industry experts say. The warehouse capacity issue has swung 180 degrees from where it was a few years ago, said Elaine Batlis, a senior vice president at Silvergate Bank, during last week's national secondary market conference sponsored by the Mortgage Bankers Association. Back in 2006-07, there was an oasis of liquidity; pricing was good and terms were flexible, Batlis said. But in the wake of the financial crisis in 2008, there was a sudden...

Look for refinance activity to continue to decline throughout the year, experts warn, but only a small percentage of those homeowners who do take a seat at the closing table will be "cash-out" borrowers. Freddie Mac reported last week that during the first quarter of 2011, only 25 percent of those who refinanced their existing mortgage loans pulled cash out of their home. Among refi loans, the average cash-out share - which Freddie defines as when the loan balance is increased by at least 5 percent - over the past 25 years was 62 percent. Even more surprising, Freddie noted that a record 21 percent of refi borrowers actually reduced their principal balance by...

A bipartisan bill unveiled this week by two House members would overhaul the federal mortgage finance system to ensure private sector capital for homebuyers and capital requirements to protect taxpayers - without Fannie Mae or Freddie Mac.