Heavy refinance volume pushed both Fannie Mae and Freddie Mac single-family mortgage securitization up appreciably during the fourth quarter of 2012, helping to close out a post-crisis record year for GSE mortgage-backed security business, according to a new Inside The GSEs analysis.Fannie and Freddie issued $352.51 billion in single-family MBS during the fourth quarter, a 5.2 percent increase from the previous period and the biggest quarter in over three years.

Fannie, Freddie ReformThe Mortgage Bankers Association has formed a special working group tasked with divining an approach to implement comprehensive reform of the GSEs, Fannie Mae and Freddie Mac. Rolled out in late December, MBA’s 17-member GSE Single Family Task Force will re-examine and add to the association’s 2009 proposal on the future of the secondary mortgage market, according to Task Force Chairman Tim Dale, executive vice president of mortgage lending at BB&T.Dale said the key focus of the task force will be on “transition.”

The agency residential MBS market expanded for the third consecutive quarter during the three months ending in September, according to a new Inside MBS & ABS analysis. A total of $5.39 trillion of single-family MBS issued by Fannie Mae, Freddie Mac and Ginnie Mae were outstanding as of the end of the third quarter of 2012. That was up by a scant 0.2 percent from the previous period, although it was still 0.4 percent below the level at the same time in 2011. Both Ginnie (2.1 percent) and Fannie (0.6 percent) posted...[Includes two data charts]

Analysts expect issuance of new production non-agency MBS to increase in 2013 from this year’s level but remain well below historical non-boom standards. Investor demand for new non-agency MBS has increased recently and a number of issuers are looking to enter the market, but the non-agency sector also faces significant hurdles. Reform of the government-sponsored enterprises and pending risk-retention rules need to be resolved before non-agency MBS production will increase significantly, according to industry analysts. Through the beginning of December, $13.01 billion in non-agency MBS had been issued...

MBS analysts hold differing expectations as to what the potential replacement of the “temporary” head of the Federal Housing Finance Agency could mean to Fannie Mae, Freddie Mac and the mortgage securities sector. Recently reported Obama administration backchannel chatter suggests that the White House is actively seeking potential candidates to replace FHFA Acting Director Edward DeMarco, who has been the de facto agency chief since the departure of James Lockhart in September 2009. A report last week by Credit Suisse speculated...

A recession resulting from the federal government taking the U.S. economy over the fiscal cliff would leave Fannie Mae and Freddie Mac vulnerable to higher credit losses and make the two government-sponsored enterprises unprofitable again, according to Moody’s Investors Service. Moody’s this week warned that Washington’s failure to reach a tax and spending agreement would also force the GSEs to ride out the shockwaves of potential financial market disruptions on their derivatives trades. “In our current central economic scenario, both Fannie Mae and Freddie Mac are...

As the wait for the highly anticipated “qualified mortgage” final rule continues, its impact on FHA lending programs remains uncertain. Concerns have been raised over the possibility that the final QM rule the Consumer Financial Protection Bureau is finalizing may establish a “safe harbor” for prime loans with a maximum debt-to-income ratio of up to 43 percent. This could have implications for FHA loans, which allow higher back-end ratios under certain circumstances, according to some lenders and industry participants. At what point the DTI ratios will ...

The secondary market value of residential mortgage servicing rights has been in the doldrums since the housing bust, but all that could change in the coming months – thanks to both new investor interest and rising rates. And not only are values picking up but so are deals and the number of MSR valuations performed by analytic firms. “We’ve brokered 15 to 20 deals in 2012,” said Mark Garland, president of MountainView Servicing Group. “Last year we did half that.” In 2012, MountainView performed...

Industry observers are holding out fading hope that Congress will act on time-sensitive mortgage-related bills before the lame-duck session draws to a close, but as the clock winds down, real estate interests are already adjusting their legislative expectations for 2013. At the top of the list of mortgage bills being watched closely is the extension of the Mortgage Forgiveness Debt Relief Act of 2007. The law exempts up to $2 million in mortgage debt forgiven by a lender in a short sale, loan modification or foreclosure from federal taxation. Despite support from both political parties, industry groups and consumer advocates, legislative efforts to renew the act have...

The retreat of some large loan aggregators from the mortgage market has been a challenge for many small loan originators, but Federal Home Loan Bank officials say the Mortgage Partnership Financing Xtra program has gone a long way to pick up the slack. Through MPF Xtra, six FHLBanks provide member institutions an alternative for selling first mortgages that they originate that allows them to retain customer relationships without taking on interest rate and prepayment risk. The program is one of several options under the Mortgage Partnership Finance program, which is run and managed by the FHLBank of Chicago. Introduced in 1997, the MPF provided...