Correspondents are an especially good source of purchase mortgages. During the third quarter, purchase mortgages accounted for over half (50.5 percent) of correspondent-originated loans securitized by Fannie Mae and Freddie Mac.

Mortgage banking officials tracking the issue believe that if the agency is going to lower Fannie Mae/Freddie Mac loan limits for 2014 it will need to codify those changes by mid- to late October to give lenders time to update their technology systems.

Officials at Fannie Mae said they learned from Freddie Mac when structuring their pending risk-sharing transaction, including getting the deal rated. Investors are generally impressed with the transactions and look forward to more. Fannie’s Connecticut Avenue Securities Series 2013-C01 is scheduled to close on Oct. 24, according to a presale report released late last week by Fitch Ratings. The higher of the two tranches offered for sale is set to receive a BBB- rating, the lowest investment grade rating available. Speaking at the ABS East conference produced by Information Management Network this week in Miami, Laurel Davis, a vice president at Fannie Mae, said...

The nation’s top court this week may have sent a subtle hint to the more than dozen big bank defendants being sued by the Federal Housing Finance Agency when it flatly declined to receive their petition to dismiss their cases, notes a legal expert. The 13 financial institutions – including Bank of America, Deutsche Bank, Goldman Sachs and JPMorgan Chase – sought to argue before the Supreme Court of the United States that the FHFA waited too long when it filed suit against the banks in 2011 over non-agency MBS the government-sponsored enterprises purchased prior to the 2008 financial crisis. SCOTUS said...

If the mortgage reform legislation drafted by Sens. Bob Corker, R-TN, and Mark Warner, D-VA, becomes law, the mortgage market would be reconstituted in such a way that the nation’s largest banks could dominate the MBS market, according to the Community Mortgage Lenders of America. The CMLA, which represents small- to mid-sized residential lenders, isn’t entirely enthralled with Fannie Mae and Freddie Mac either, but according to a recent letter sent to the Senate Banking, Housing and Urban Affairs Committee, it fears that “too big to fail” banks could prove an even greater danger. The correspondence notes...

The interaction between the qualified mortgage standard promulgated earlier this year by the Consumer Financial Protection Bureau and the qualified residential mortgage standard still being developed by other federal regulators is going to have a myriad of unpleasant side effects for the securitization sector, according to a top industry attorney. “Linking of qualified residential mortgages (QRM) in the risk-retention rules to the definition of qualified mortgage (QM) in the CFPB’s ability-to-repay rules will further deepen the divide between QM and non-QM loans in terms of pricing and availability,” said Stephen Kudenholdt, chairman of the capital markets practice at the Dentons LLC law firm in New York City. Speaking during a webinar this week sponsored by Inside Mortgage Finance, an affiliated publication, the attorney indicated...

There is no mention in the SunTrust filing how much HUD/FHA might receive. A spokesman for the bank declined to provide a number to Inside Mortgage Finance.

“Linking of qualified residential mortgages (QRM) in the risk-retention rules to the definition of qualified mortgage (QM) in the CFPB’s ability-to-repay rules will further deepen the divide between QM and non-QM loans in terms of pricing and availability,” said attorney Stephen Kudenholdt of Dentons LLC.

The most important take away from this week’s loan limit reduction news: Congress warning DeMarco that he’d better defer to them on loan limits. His reply: radio silence. Meanwhile, Wells tosses Freddie overboard, sort of.

The Federal Housing Finance Agency holds the keys to the Fannie Mae/Freddie Mac loan limit kingdom, but it’s giving no clues – or interviews – as to where it’s headed on the issue. Meanwhile, pressure is mounting on the regulator to do nothing. As far as the mortgage industry is concerned, it knows a change is coming and hopes that when FHFA finally lowers the current high-cost limit of $625,500 the implementation date will come deep into the second quarter of 2014, or at the very least, March 31.