The official watchdog of Fannie Mae's regulator has flagged "several opportunities for improvement" in the Federal Housing Finance Agency's oversight of the nearly $12 billion buyback settlement between Bank of America and the GSE announced earlier in the year. In its review of the January BofA/Fannie settlement, FHFA's Office of Inspector General credits the agency for its adherence to its repurchase settlement guidance, an IG-recommended policy that the regulator issued in June 2012. However, FHFA's repurchase guidance and consequently its oversight of the buyback settlement fell short regarding the resolution of compensatory fees and the transfer of mortgage servicing rights, the OIG report found.

Fannie Mae has come up with a workaround for a computer software problem that erroneously reported short sales as foreclosures on consumer credit reports. “In an effort to assist borrowers in obtaining a new loan in an appropriate timeframe, [Desktop Underwriter] will be updated to disregard the foreclosure information on the credit report when instructed to do so by the lender on the online loan application,” Fannie explained in a recent updated notice.

The Federal Housing Finance Agency is ignoring a clear directive to rehabilitate Fannie Mae and the GSE conservator’s failure to restore the firm to financial health has come at the cost of the company’s common shareholders, according to a new lawsuit filed against the government earlier this week. Fannie shareholders Bryndon Fisher and Bruce Reid filed suit against the United States government, as well as Fannie as a nominal defendant, in the U.S. Court of Federal Claims. This latest shareholder lawsuit does not challenge the legality of Fannie’s placement into conservatorship in September 2008.

Future guaranty fee increases promulgated by the Federal Housing Finance Agency will be driven by the shape of the mortgage market to come, according to a new report from Barclays. The FHFA has telegraphed additional g-fee increases in 2013 following two hikes last year. Currently g-fees average 50 to 55 basis points compared to 24 bps in 2009, noted Barclays. “Further g-fee hikes will depend on the path of GSE reform, the amount of capital various entities in the system are required to hold and the cost of capital of these entities,” said Barclays.

With more than two years left to go in the Home Affordable Refinance Program, it remains to be seen how many HARP-eligible loans will ultimately be refinanced as borrower education and lender participation in the program continue to be major challenges, according to a recent report by the Federal Housing Finance Agency’s official watchdog. In its “mid-program assessment,” the FHFA’s Office of Inspector General report noted that since HARP was launched in March 2009 through March 2013, 2.4 million HARP refis have been completed. The HARP 2.0 modifications rolled out in late 2011 and subsequent changes made throughout 2012 and 2013 have “substantially increased” the program’s refi volume, particularly for loans with loan-to-value ratios greater than 105 percent, said the OIG.

The the most powerful consumer regulator in the nation raised concerns about aligning the definitions of 'qualified residential mortgage' and 'qualified mortgage.'

Commercial banks are earning a ton of dough on residential servicing fees, but nonbanks are seeing an erosion in profits.

With improving loan quality and mortgage repurchase reviews declining, due diligence firms have been under stress the past year.

FHFA blames part of the GSEs’ significant losses on subprime MBS, which JPMorgan and 16 other financial institutions sold to Fannie and Freddie.