The Federal Housing Finance Agency is proceeding with its initiative to dispose of GSE and government-held real estate-owned properties even as some within the industry question whether such a wide-spread REO program is necessary. Last week, the FHFA announced the first pilot transaction under its REO initiative, which is targeted to the country’s “hardest-hit” metropolitan areas, including Atlanta, Chicago, Las Vegas, Phoenix and parts of Florida.

Fannie Mae announced this week it will soon implement changes to its Lender-Placed Insurance requirements by overseeing the “forced-placed” policies itself instead of allowing banks and other financial institutions to do so. In a departure from current practices, Fannie said it would solicit proposals from insurance companies for its LPI business in an effort to “significantly reduce costs” to homeowners, taxpayers and to the GSE itself.

Fannie Mae said last week that it acted first to end its existing mortgage loan delivery contract with Bank of America because of delays in resolving repurchase issues. The GSE’s account in its quarterly filing with the Securities and Exchange Commission is at odds with BofA’s announcement two weeks ago where the bank announced in its own SEC filing that it has stopped selling to Fannie due to “increasingly inconsistent” repurchase requests by the enterprise compared to past practice.

A month after Congress voted to curtail bonus payments conferred to Fannie Mae and Freddie Mac executives, lawmakers have yet to close the deal and send a final bill to the president’s desk for signature. In early February, both the House and Senate overwhelmingly approved the Stop Trading on Congressional Knowledge Act of 2012, which would bar members of Congress and congressional staff from using non-public, inside information for private gain. While the House version of the STOCK Act is weaker than the Senate’s, both versions retained an amendment sponsored by Sens. John McCain, R-AZ and Jay Rockefeller, D-WV, to prohibit Fannie and Freddie executives from receiving multi-million dollar bonuses while the GSEs remain in federal conservatorship.

The Federal Housing Finance Agency Office of Inspector General took the FHFA to task this week for what the OIG considers the agency’s lax supervision of Freddie Mac’s relationship with its servicers. Specifically, the FHFA has not clearly defined its role regarding servicers, sufficiently coordinated with other federal banking agencies about risks and supervisory concerns with individual servicers, or timely addressed emerging risks presented by mortgage servicing contractors.

The Federal Housing Finance Agency’s hands-off approach to regulating Freddie Mac’s relationship with servicers is a problem, according to a new report from the regulator’s inspector general. While the FHFA has taken some steps, like its Servicing Alignment Initiative, the IG said that the regulator should be looking directly at the books of servicers and other counterparties, instead of taking the government-sponsored enterprises’ versions of events. The regulator’s ability to keep track of the GSE servicer risk might be “impaired by its lack of direct access to servicer books and records relating to the...

Bank of America had already been dialing back its mortgage deliveries to Fannie Mae, along with declining overall production volume, before the company unexpectedly announced last week it has stopped sales to the government-sponsored enterprise altogether. But according to reports, a top Fannie official said the GSE acted first to end the relationship in frustrations with the bank’s delays in resolving repurchase issues. BofA said disputes over repurchases were one factor leading the bank to stop selling most single-family mortgages to Fannie, although the company also cited an inability to renegotiate...

Freddie Mac is reportedly crafting its own plan with institutional mortgage-bond investors to sell off hundreds of distressed homes owned by the government-sponsored enterprise, independent of a current government proposal to unload GSE real estate owned properties. According to Reuters, Freddie’s plan would allow investors to individually choose the properties they want to purchase rather than sell the homes in discounted bulk packages, like the plan that’s spearheaded by the Federal Housing Finance Agency. However, just as with the government’s plan, Freddie would secure a special line of...

Some 42 months into the government conservatorship of Fannie Mae and Freddie Mac “with no end in sight,” the GSEs’ regulator has planned out the two companies’ next steps but it says Congress needs to have the last word as to the final fate of Fannie and Freddie. Federal Housing Finance Agency Acting Director Edward DeMarco this week dispatched his “strategic plan” to House and Senate leaders in which the Finance Agency outlines the next phase of conservatorship for the GSEs while issuing a call to action to lawmakers.