Fannie Mae and Freddie Mac cleared another hurdle in their efforts to expand the investor base for their mainstay credit-risk transfer programs when a leading Wall Street group said it saw no problems with a plan to structure future CRT issues as real estate mortgage investment conduits.

The inspector general of the Federal Housing Finance Agency voiced concerns about the agency’s supervision of Fannie Mae and Freddie Mac, while lawmakers questioned why new products like the Integrated Mortgage Insurance (IMAGIN) credit risk-transfer program were implemented without going through the proper channels.

Fannie Mae and Freddie Mac had wildly different experiences in the first quarter of 2018, a period when both firms saw declining single-family business volume. But Freddie’s production of single-family mortgage-backed securities plummeted 29.2 percent from the fourth quarter of 2017, while Fannie’s 5.7 percent decline was roughly one fifth as severe. Those cross-currents upended the playing field, giving Fannie a hefty ... [Includes two data charts.]

The Federal Housing Finance Agency’s supervision and guidance of the GSEs lacks the rigor shown by other federal financial regulators, according to the FHFA’s inspector general, Laura Wertheimer. She testified during a House Financial Services subcommittee hearing this week focusing on the oversight of Fannie Mae and Freddie Mac. Throughout the hearing, Wertheimer and lawmakers pointed to a number of supervisory concerns and questioned the FHFA’s standards when it comes to monitoring the mortgage giants. “The flexible and less prescriptive nature of many FHFA standards and much of its guidance has resulted in inconsistent supervisory practices,” she said.

Fannie Mae’s new headquarters in downtown Washington, DC, continues to be a bone of contention for some, but the GSE said the project is on schedule and expects it to be completed by November 2018. So far, about 20 percent of Fannie’s Washington workforce has relocated and more are planned as additional floors are finished. During a House Financial Services Oversight and Investigations subcommittee hearing this week, lawmakers inquired about the building’s costs. Federal Housing Finance Agency Inspector General Laura Wertheimer criticized the regulator’s monitoring of the build outs. Wertheimer said the initial investigation of the headquarters stemmed from a...

The latest update on the single security may signify the next step in GSE reform, according to analysts with Wells Fargo Securities. In late March, the Federal Housing Finance Agency announced that the uniform mortgage-backed security collateralized by Fannie Mae and Freddie Mac loans will launch on June 3, 2019. The framework for housing-finance reform has evolved over time to building on the successful elements of the current market instead of disrupting it, said analysts Vipul Jain, Anish Lohokare and Randy Ahlgren. They noted that the single security seems to be leading toward a single MBS label with catastrophic insurance underwritten explicitly by the government.

The Federal Housing Finance Agency will have its hands full reviewing more than 100 comments related to deciding whether the GSEs should use alternative credit scoring methods. The comment period closed on March 30, and the agency received about a quarter of the replies on the last day. Everyone from industry trade groups and corporations to lenders and lawmakers offered input on whether to allow lenders to use alternatives to the omnipresent FICO credit score. In a request for input issued in December, the agency outlined four potential approaches, including an updated version of FICO, VantageScore 3.0, offered by VantageScore Solutions, or a hybrid of several scoring mechanisms.

Fannie Mae recently clarified its seller guidelines on gifts from lenders to borrowers. Last week, the GSE noted that lenders can indeed contribute to certain borrowers’ home-purchase costs, but just not to their downpayments. The GSE explained that lenders can contribute funds to help defray closing costs and prepaid fees that are normally delegated to the buyer as long as it is not used to fund any portion of the downpayment. The contribution also must be a true gift as it can’t be subject to repayment requirements or require any financial obligation apart from the mortgage. Nor can the contribution come from a third party.

NRZ Mortgage Holdings and Towd Point are the winning bidders of Fannie Mae’s sixth reperforming loan transaction and first for 2018. The GSE announced the winners this week.The loans were divided into two pools. NRZ, a subsidiary of Fortress and the nation’s fifth largest residential servicer according to numbers from Inside Mortgage Finance, won the first pool. It consisted of 3,015 loans with a UPB of $686 million and average loan size of $226,659. NRZ’s investment estimate is between $200 to $250 million, according to an analysis by Keefe, Bruyette and Woods analyst George Bose.

The Federal Housing Finance Agency Office of Inspector General said the FHFA did not make sure that Freddie Mac’s plans to address cybersecurity deficiencies were sufficient. Instead, the agency questionably closed the matter requiring attention (MRA) after deciding on its own that the GSE had completed its planned remedial actions.This raised a red flag with the OIG, which said when an MRA is issued, the FHFA requires the GSE to provide a remedial plan that includes specific milestones that take into consideration the complexity of the issue and the urgency regarding the correction.