The Federal Housing Finance Agency has taken a number of positive steps to enhance and improve its deficient examination capacity of Fannie Mae and Freddie Mac, but the agency is still falling short of an optimal solution, according a new report by the Finance Agency’s official watchdog. This week’s evaluation report by the FHFA’s Office of Inspector General updates a September 2011 OIG audit that dinged the Finance Agency for shortfalls in its examination program, in particular its shortage of qualified examiners. The FHFA’s examination program – targeted examinations, continuous supervision, supervisory analysis and remediation activities – is the primary means by which the agency supervises and regulates Fannie and Freddie.

The top Democrat and Republican of the Senate Banking, Housing and Urban Affairs Committee admitted last week they will not make their ambitious deadline of clearing a housing finance reform bill by the end of this year, but the senior lawmakers said they remain “bullish” on moving legislation to the Senate floor sooner rather than later in 2014. Speaking at a Bipartisan Policy Center event, Committee Chairman Sen. Tim Johnson, D-SD, blamed “a couple of curveballs,” including the 16-day government shutdown, for falling short of his and Idaho Republican Mike Crapo’s self-imposed deadline announced in September. He also noted his panel held 12 hearings on housing reform this year, including the final one last week.

In between the Federal Housing Finance Agency’s announcement of a new guaranty fee increase and the Senate’s confirmation of a new FHFA director, a Manhattan federal judge last week quietly issued a ruling that permits the agency to proceed with its residential mortgage-backed securites lawsuits. In the summer of 2011, the FHFA filed suit against 18 big banks in connection with flawed mortgage securities Fannie Mae and Freddie Mac purchased between 2005 and 2007. A number of defendants in the case, including a host of individuals, argued in an appeal filed in August that due to a 2005 change in Rule 430B of the Securities Act of 1933, they should not be held liable in the case.

Fannie Mae last week issued an update to its lenders describing the new process that the GSE has implemented to identify and monitor individual appraisers. According to Lender Letter LL-2013-10, Fannie reviews appraisal reports for patterns of discrepancies and inconsistencies. Using the appraisal data that it collects through the Uniform Collateral Data Portal, Fannie said it has developed a process that identifies appraisers whose work displays more egregious issues.

Fannie, Freddie Suspend Holiday Evictions. In what has become an annual tradition, Fannie Mae and Freddie Mac each announced last week that all foreclosure-related evictions of single-family and two-to-four unit properties are suspended until after the New Year.“At this time of year, we want to bring some relief to families who confronted financial difficulties and went through foreclosure,” said Chris Bowden, Freddie’s senior vice president of REO. The GSEs are also encouraging struggling homeowners to contact their servicers for help to avoid foreclosure. “We encourage any homeowner who is having difficulty making their mortgage payment to reach out for help right away,” added Fannie Chief Operating Officer Terry Edwards.

A continued decline in GSE refinance activity helped contribute to an overall dip in the volume of single-family mortgages securitized by Fannie Mae and Freddie Mac in November, according to a new Inside The GSEs analysis. Fannie and Freddie issued $58.7 billion in single-family mortgage-backed securities in November, a 13.4 percent decline from October and a 6.2 percent decrease for the first 11 months of 2013.

Revised loan-level price adjustments recently announced by Fannie Mae and Freddie Mac that will make mortgages more expensive for a wide breadth of borrowers are not sitting well with different factions of the industry, including mortgage insurance firms that could lose some of their hard-fought market share gains. Industry trade groups are already turning to their friends in Congress, hoping that certain key members of the House and Senate financial service committees might have a talk with Rep. Mel Watt, the North Carolina Democrat who’s waiting to be sworn in as the new director of the Federal Housing Finance Agency. The government-sponsored enterprises announced...[Includes one data chart]

Citing its goal and the White House’s stated preference to reduce the market presence of the government-sponsored enterprises, the Federal Housing Finance Agency this week proposed setting “loan-purchase limits” for Fannie Mae and Freddie Mac. The FHFA said it could use its authority as conservator to set loan-purchase limits about 4.0 percent below the statutory GSE loan limits it established for 2014. Instead of a national floor of $417,000, the top single-unit mortgage Fannie and Freddie would buy in markets that are not designated high cost would be $400,000. The maximum purchase limit in high-cost markets would be $600,000, rather than $625,500, and all the “tweener” high-cost limits would similarly be reduced by 4.0 percent. “The loan purchase limits … would modestly reduce...

The U.S. Treasury’s new Federal Insurance Office released a long-awaited report last week that calls for the federal oversight of mortgage insurers, an industry now overseen directly by state insurance regulators and indirectly by Fannie Mae, Freddie Mac and the Federal Housing Finance Agency. “Federal standards and oversight for mortgage insurers should be developed and implemented,” said the report. The private mortgage insurance sector is interconnected...

Concerns about red tape from lenders have prompted an increasing share of homebuyers to use all cash to purchase a home, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. Some 29.3 percent of home purchases completed in November relied solely on cash, based on a three-month moving average. That was the third monthly increase in the share of cash transactions. Tom Popik, research director of Campbell Surveys, said...