Now that Bank of America has inked a long-rumored deal to sell mortgage servicing rights on some $308 billion of distressed mortgages to Nationstar and Walter Investment Management, the question becomes how much more the bank may unload. The answer may be quite a lot. Paul Miller, an analyst with FBR Capital Markets, said that he anticipates the megabank will sell between $300 billion and $400 billion of MSRs by the time 2013 ends. According to Miller, the “to be sold” product includes $100 billion of Ginnie Mae servicing, $150 billion of Fannie Mae MSRs and $100 billion to $200 billion of Freddie Mac servicing. A BofA spokesman declined...[Includes one data chart]

Fannie Mae is working on building an in-house unit to value mortgage servicing rights, according to industry officials who’ve been briefed on the GSE’s plans. However, it’s unclear at this point how far along Fannie is. A spokesman for the company declined to comment to Inside The GSEs about the matter. Officials familiar with the effort, including one former GSE executive, said Fannie is looking to value MSRs for two main reasons: to better judge counter-party risk on mortgage bankers that sell residential loans to the company, and perhaps to better value the asset because it may have plans to buy or finance servicing rights in the future.

Mortgage market observers say they are seeing a gradually building struggle by the Federal Housing Finance Agency to maintain its precarious balance between the FHFA’s congressionally-mandated roles as conservator to the GSEs and – indirectly – regulator of 65 percent of the mortgage market. Industry interests, meanwhile, continue to call for greater “transparency” surrounding Fannie Mae- and Freddie Mac-related decision making. Under the Housing and Economic Recovery Act of 2008, the FHFA was created to succeed the Office of Federal Housing Enterprise Oversight as regulator to Fannie and Freddie as well as the 12 Federal Home Loan Banks.

Citing a lack of any “specific credible evidence of actual violations” within its purview, the House Ethics Committee last week announced it has dropped its probe of alleged legislative influence pedaling related to Countrywide Financial’s “VIP Program.” In a statement dropped on Dec. 27, the committee said that although there was some evidence of mortgage loans made to House members and staffers through Countrywide CEO Angelo Mozilo's “Friends of Angelo” program, the allegations are either too dated or involve individuals no longer serving in the House.

The official watchdog of the Federal Housing Finance Agency has pointedly suggested that the GSE regulator direct Fannie Mae and Freddie Mac to determine whether or by how much the two companies were swindled out of billions of dollars as a result of banks’ alleged manipulation of a key interest rate and then determine how to recoup those losses, in court if necessary. A recent unpublished memo by the FHFA’s Office of Inspector General urged the Finance Agency to prepare to file suit against the banks involved in setting the London Interbank Offered Rate after an analysis of the GSEs’ published financial statements and publicly available historical interest data concluded that Fannie and Freddie may have suffered more than $3 billion in losses due to LIBOR manipulation.

The White House is once again toying with the idea of HARP 3.0 - using Fannie Mae and Freddie Mac to refinance underwater non-agency loans, giving the GSEs leeway to charge higher guaranty fees for securitizing these mortgages, and waiving mortgage insurance requirements, according to industry officials who’ve been briefed on the plan. However, such an effort – modeled on the GSE’s Home Affordable Refinancing Program – would require Congressional approval and is already meeting with industry resistance. Also, many House Republicans are not happy with the thought. “While we all recognize the need to help as many underwater borrowers as possible, I do not think any further expansion of the GSE charter to originate higher risk, underwater loans makes sense and only shifts risk from the private sector onto the U.S. taxpayer,” said David Stevens, president and CEO of the Mortgage Bankers Association. “Based on past experience, the GSEs are not experts at pricing these kinds of risks.”

Fannie Mae and Freddie Mac, at the direction of the Federal Housing Finance Agency, are moving forward together to develop industry-wide data standards, according to updates from both GSEs. A component of the FHFA-mandated Uniform Mortgage Data Program, the Uniform Mortgage Servicing Dataset will define a standard dataset that will facilitate data exchanges between servicers and investors with standardized definitions, formats and valid data values. “The adoption of an industry standard data model will provide long-term benefits to servicers, GSEs and the mortgage industry,” noted the GSEs’ update published Dec. 12.

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]