MGIC Investment Corp. announced last week it will pay Freddie Mac $267.5 million to settle their prolonged dispute over pool mortgage insurance coverage. The settlement was a condition set by the GSE to allow a new unit of MGIC to underwrite mortgages in seven states, though the MI said it won’t sign the deal until Freddie approves MGIC’s newly capitalized unit to write insurance.

A federal judge has allowed legal claims by current and former Fannie Mae employees over their employee stock ownership plan losses to proceed against several company directors including former CEO Daniel Mudd, as well as members of Fannie’s benefits plan committee. Lead plaintiffs Mary Moore and David Gwyer, who brought their claims against Fannie in 2009, seek compensation for losses on company stock that remained in employees’ retirement plans between April 2008 and May 2010. The government took over Fannie in September 2008 and put the GSE into conservatorship.

Private mortgage insurers posted an impressive 26.5 percent increase in new insurance written during the third quarter of 2012, but four of the industry’s six active firms are gradually taking market share away from their rivals. Private MIs insured $51.76 billion in new mortgage originations during the third quarter, according to a new Inside Mortgage Finance ranking and analysis, making it the strongest quarter for the beleaguered industry since the second quarter of 2008. FHA and VA lending grew at a much slower pace, climbing just 2.1 percent and 4.0 percent, respectively, during the third quarter. The result was...[Includes two data charts]

Fannie Mae and Freddie Mac reported a sharp decline in the volume of mortgage repurchases and indemnifications made by lenders during the third quarter, as well as a slowdown in the volume of new buyback demands, according to a new Inside Mortgage Finance analysis of data reported by the two government-sponsored enterprises in financial reports released last week. During the third quarter, lenders repurchased or otherwise indemnified the GSEs for $4.396 billion of mortgages that had been subject to buyback demands, a decline of 26.0 percent from the second quarter. It was the lowest repurchase volume since the first three months of last year. On a year-to-date basis, repurchases are...[Includes one data chart]

Although mortgage market watchers cautiously expect President Obama and the lame-duck session of the 112th Congress to come up with at least a stop-gap deal to avoid the looming “fiscal cliff” at year’s end, building uncertainty among homeowners and potential borrowers as to whether important mortgage tax deductions will exist in 2013 threatens to thwart housing’s fragile recovery. Unless Congress and the president create and sign new legislation to change existing law before Jan. 1, 2013, taxpayers are poised to be hit with a massive combination of expiring tax breaks, tax hikes and deep, automatic federal spending cuts. A report last week by the Congressional Budget Office concluded that a failure to avoid the cliff would push the economy back into recession with the unemployment rate shooting up to 9.1 percent by next fall. Fitch Ratings warns...

The United States just concluded an electoral campaign season that involved the expenditure of billions of dollars and resulted in no change in the balance of power on the federal level, beyond strengthening Democrats’ control in the U.S. Senate. But that doesn’t mean nothing important is going to happen over the next four years. Securitization industry officials, Washington insiders, political observers and policy wonks all expect hard financial realities to compel policymakers into responding to a host of issues that will significantly affect housing finance and securitization. “We don’t think the ‘status-quo election,’ as some have called it, means status quo for residential mortgage finance,” said Karen Shaw Petrou, a managing partner at Federal Financial Analytics, a Washington, DC, think tank. She thinks...

Fannie Mae and Freddie Mac continued to trim their retained holdings of MBS and unsecuritized mortgages during the third quarter, but at a slower pace than in previous periods, according to an analysis by Inside MBS & ABS of earnings reports released this week by the two government-sponsored enterprises. One of the conditions of the conservatorships the GSEs entered four years ago was that they would reduce their retained mortgage portfolios by 10 percent a year. Those terms were revised in August to include a 15 percent annual wind-down, which would take each GSE’s investment portfolio down to $250 billion by the beginning of 2018, four years sooner than under the previous arrangement. As Freddie noted...[Includes one data chart]

The ACLU is calling for changes to federal anti-discrimination statutes to deter secondary mortgage market participants from engaging in business practices that might have a discriminatory impact on certain protected classes of borrowers. In a recent analysis of mortgage foreclosures, the ACLU said the origination and securitization of subprime and other high-risk mortgage products have hurt minority families and caused the loss of 3.5 million homes to foreclosure. The ACLU believes...

Complicating the post-election process of regulatory implementation is the expectation that a number of top officials at key agencies are likely to move on during President Obama’s second term. For the mortgage finance industry, perhaps the most notable potential departure among administration officials is that of Treasury Secretary Tim Geithner. Geithner has dropped hints more than once this past year that he wants to move on. Treasury officials did not respond to requests for confirmation of that as of press time. Other key officials on the industry’s departure watch list include...

GSEs, Private MIs Agree to Drop Pre-Approval Requirements. Fannie Mae and Freddie Mac and the private mortgage insurance industry have agreed to eliminate pre-approval requirements for foreclosure alternatives, such as short sales and deeds-in-lieu of foreclosure. The separate agreements with MIs should help distressed homeowners avoid foreclosure by doing away with costly, time-consuming MI reviews that delay foreclosure-prevention transactions, according to the government-sponsored enterprises. WIMC Fully Acquires Reverse Mortgage Solutions. Walter Investment Management Corp. has completed its $120 million acquisition of ...