SunTrust Banks late this week said it has entered into a $968 million mortgage settlement with the GSEs and the Department of Housing and Urban Development to resolve buyback claims and losses suffered by the FHA. Overall, Fannie Mae will receive $323 million in cash, Freddie Mac $65 million. The payment to Fannie releases the nation’s ninth largest home funder – according to figures compiled by Inside Mortgage Finance – from “certain existing and future repurchase obligations.”

Expect more GSE repurchase settlements in the near future, say industry insiders, following last week’s announcement by Freddie Mac that it scored a trifecta of buyback settlements with three of the country’s biggest financial institutions. Wells Fargo, Citigroup and SunTrust Mortgage will pay a combined $1.3 billion to the GSE and in exchange Freddie will – with some limitations and exclusions – release the companies from certain existing and future loan repurchase obligations for specific populations of loans.

As the partial government shutdown and debt-ceiling crisis completed its second week, the sense of relative urgency for housing finance reform that lawmakers from both parties expressed just a month ago at the five-year anniversary of Fannie Mae’s and Freddie Mac’s conservatorship had taken a back seat to larger, partisan hostilities, say industry observers.In September, Democrat and Republican leadership of the Senate Banking, Housing and Urban Affairs Committee set a goal of finishing committee-level consideration of GSE reform by the end of 2013.

The Federal Housing Finance Agency failed to clarify the goals and objectives for its real-estate owned pilot program, as well as for the future of the GSEs’ REO disposition activities as the program evolved, according to a recent audit by FHFA’s Office of Inspector General. The FHFA-OIG report criticizes both the Finance Agency and Fannie Mae for shortfalls in their planning and oversight of the REO pilot program.

The Federal Housing Finance Agency has issued guidance to Fannie Mae and Freddie Mac on how to effectively pursue and collect deficiencies from borrowers who may have the ability to repay their mortgages. In a recent advisory bulletin, the FHFA identified the factors the GSEs should consider before attempting to recover a deficiency balance.

Fannie Mae and Freddie Mac may have to dial back the multifamily spigot if they’re going to meet the targets their regulator wants them to as it seeks to shrink the GSEs’ presence in the space. It looks like it might require a bigger turn of the dial for Freddie than for Fannie. As part of the Federal Housing Finance Agency’s 2013 Conservatorship Scorecard, FHFA Acting Director Edward DeMarco has called for a 10 percent reduction target in GSE multifamily business volume this year compared to 2012.

Declining refinance volume contributed to a marked decline in the GSEs’ overall business during September compared to the previous month, with Fannie Mae seeing a rise volume to the detriment of Freddie Mac, according to a new Inside The GSEs analysis.Fannie and Freddie issued $78.6 billion in single-family mortgage-backed securities during the third quarter, a 20.0 percent decline from August but a 9.0 percent rise for the first nine months of 2013. [Includes one data chart.]

After an eight-year hiatus, the Federal Home Loan Bank of San Francisco announced last week it would renew its participation in the Mortgage Partnership Finance program, which is managed by the FHLBank of Chicago. Starting in 2014, the San Francisco Bank will purchase conventional, conforming fixed-rate mortgages and FHA/VA products, as well as purchase fixed-rate loans from its members for sale to Fannie Mae through the MPF Xtra program.

Fannie Mae officials said this week their decision to study from Freddie Mac’s inaugural risk-sharing transaction prompted them to take the time to obtain a rating on the deal. 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 Federal Housing Finance Agency this week made the common securitization platform of Fannie Mae and Freddie Mac a legal entity, filing paperwork with Delaware’s Division of Corporations, creating a limited liability company called Common Securitization Solutions LLC. The new limited liability company will be jointly owned by the two GSEs and will assume Fannie’s and Freddie’s securitization functions.