The private equity plaintiffs allege that the Treasury’s change in the dividend structure of its preferred stock leaves the GSEs with no funds to pay anything to junior shareholders.

With just one accord this week, the Federal Housing Finance Agency more than doubled the amount it has recovered on behalf of Fannie Mae and Freddie Mac from issuers and underwriters that sold subprime and Alt A MBS to the government-sponsored enterprises. Bank of America agreed to a $9.3 billion settlement that covers its own dealings as well as those of Countrywide Financial and Merrill Lynch, which it acquired in 2008. The agreement covers some $57 billion of MBS issued or underwritten by these firms. BofA did not admit...[Includes one data chart]

It’s too soon to reduce agency loan limits, according to numerous trade groups involved in the securitization and mortgage origination markets. Momentum in Congress also appears to be moving toward maintaining the high-cost loan limits, a category of loans that was created in 2008 on an “emergency” basis. In December, the Federal Housing Finance Agency issued a request for input on a proposal to set loan purchase limits for Fannie Mae and Freddie Mac. Ed DeMarco, the FHFA’s acting director at the time, was considering reducing the loan amount eligible for purchase by the government-sponsored enterprises from $625,500 in high-cost areas to $600,000 and reducing the national loan purchase limit for the GSEs from $417,000 to $400,000. DeMarco said...

Rep. Maxine Waters, D-CA, this week unveiled a mortgage-finance reform bill that would replace Fannie Mae and Freddie Mac with a private cooperatively-owned entity that would issue a new form of conventional MBS backed by a mix of public and government credit support. The “Housing Opportunities Move the Economy Forward Act” adds a few new twists to the notion of creating an explicit government MBS guaranty that would stand behind a first-loss position funded by the private sector. Rather than allow a variety of private-sector firms to issue these securities, as the bipartisan Senate bill would, Waters’ proposal would create a single, cooperatively-owned entity that would be open to all lenders. The regulator of this new market, the National Mortgage Finance Administration, would have...

Fannie Mae this week released its STAR servicer rankings and hopefully a copy found its way to all those pesky regulators who think nonbank servicers can’t tell the difference between a debit and a credit.

In general, newly-created mortgage servicing rights are being valued at 4 to 4.5 times the servicing fee, which has become the industry norm of late, but there’s a school of thought that says lenders are being a bit too conservative in their “marks.” “Whether your company is public or private you have to be within [generally accepted accounting principles] on these valuations,” said Ken Richey, managing partner in Richey & Co., an accounting and advisory firm based in Englewood, CO. “GAAP dictates that you have to book it at fair value. But what’s fair value?” On a Fannie Mae or Freddie Mac loan, 4 times the servicing fees translates...

As former Fannie Mae executive William Maloni put it: “More money for Uncle Sam!” The Treasury Department ultimately will benefit since it gets to “sweep” almost of Fannie’s and Freddie’s earnings.

The scorecard was ushered in by former Acting Director Edward DeMarco who stepped down from his post in early January, to be replaced by former North Carolina Congressman Mel Watt.

Among other things, the proposed Mortgage Securities Cooperative would be the only issuer of government-backed MBS. The MSC would be governed on a one-member, one-vote basis.

The cost of borrowing for many homebuyers could rise as a consequence of the Senate’s newest housing finance reform legislation if it’s enacted as is, according to an analysis by Barclays. The bill, filed last week by Sens. Tim Johnson, D-SD, and Mike Crapo, R-ID, would replace Fannie Mae and Freddie Mac with a new mortgage-backed securities program for conventional mortgages that requires private investors to take the first 10 percent of losses. The Barclays analysis found...