The Ninth Circuit Court of Appeals has dismissed an argument in a whistleblower case, ruling that Fannie Mae and Freddie Mac are not “federal instruments” for the purposes of the False Claims Act, a federal statute that’s been used aggressively against FHA lenders. The FCA imposes liability on persons that defraud government programs and was originally enacted to penalize private parties that profited illegally in selling supplies to the U.S. Army during the Civil War. In the case of United States ex rel. Adams v. Aurora Loan Services, Inc., et al., the government argued...

Bank of America introduced a new affordable lending program last week that allows 3 percent downpayments and no required reserve funds in most instances. The bank partnered with Freddie Mac and Self-Help Ventures Fund, a Durham, NC-based nonprofit, to offer conforming loans to borrowers whose income doesn’t exceed 100 percent of the area median income. There’s also no private mortgage insurance on the loans as “Self-Help Ventures Fund is taking the first loss position in the event of a loan default through a recourse agreement,” said a Freddie spokesman. The Affordable Loan Solution mortgage was designed to let creditworthy homebuyers who meet specific income limits and other requirements to become homeowners at an affordable entry point, said...

The purchase-mortgage market took the biggest hit during the fourth-quarter slowdown in mortgage originations, but strength in first-time buyer activity helped soften the blow. According to a new Inside Mortgage Finance analysis and ranking, refi originations held steady at $175 billion during the fourth quarter. Although refinance activity in the second half of 2015 was down sharply from the first six months of the year, it was still significantly stronger than at any time in 2014 and year-to-date refi originations were up 60.0 percent in 2015. The purchase-mortgage market also grew...[Includes three data tables]

The list of reasons to reform Fannie Mae and Freddie Mac is growing and taxpayer risk is increasing the longer the current housing finance system lingers in uncertainty, according to speakers at a Capitol Hill briefing on government-sponsored enterprise reform sponsored by the Mortgage Bankers Association. Fowler Williams, president and CEO of Crescent Mortgage, said that without the secondary mortgage market outlet, smaller institutions like his would not be able to make 30-year fixed-rate mortgages available in rural and small towns. Ethan Handelman, vice president for policy and advocacy at the National Housing Conference, said...

Vintage Alt A mortgages continue to cause losses at the GSEs.

Freddie and Fannie both posted earnings north of $2 billion for the fourth quarter. But Freddie posted a net loss of $475 million in the third quarter of last year after booking a stunning $4.17 billion charge on its derivatives.

The inability of Fannie and Freddie to build capital is a huge issue, Stevens said.

In the new “Mortgage Professional’s Handbook,” residential finance technology expert Jeff Lebowitz predicts the industry “is about to exit its Victorian era of technology use."

If refinancings accelerate, Wells Fargo will need to step up production to protect its massive servicing portfolio...

Fannie Mae and Freddie Mac continued to trim their retained investment portfolios in late 2015 with most of the focus on shrinking their non-agency MBS and holdings of their own securities. Freddie Mac’s retained mortgage portfolio declined 15.1 percent last year, ending at $346.91 billion, safely below the $359.3 billion cap set by the Federal Housing Finance Agency. The government-sponsored enterprise reduced its non-agency MBS holdings by $25.60 billion, or 38.8 percent, from its yearend 2014 level. While that included hefty declines in both subprime and Alt A MBS, the biggest decline, 41.3 percent, was...[Includes one data table]