The House this week voted to reject a short-term government spending bill but what’s interesting is what’s not in it: a provision extending the temporary loan limits. While attention is on the possibility of a government shutdown, it appears that a last-ditch effort by the mortgage industry and its allies in Congress to extend the current $729,750 high-cost area loan limit before Sept. 30 has failed. The measure lost by a vote of 195-230 after Democrats withdrew their support and 48 Republicans defied party leaders in protest over spending caps. It would have kept the government operating through...

Expect a gradual but deliberate increase in Fannie Mae and Freddie Mac guarantee fees to a level that more closely reflects what a private market would charge, the head of the Federal Housing Finance Agency announced this week. In a speech at the American Mortgage Conference in Raleigh, NC, FHFA Acting Director Edward DeMarco said that since Fannie and Freddie were placed into government conservatorship three years ago this month, the two government-sponsored enterprises have steadily increased g-fees and lessened the degree of cross subsidization in credit pricing. Yet, DeMarco noted, the GSEs’ current pricing for credit guarantees “is...

Industry groups are ramping up efforts to extend conforming loan limits currently available in high-cost markets that are set to expire at the end of the month, focusing their lobbying efforts on appropriations legislation in the House. The National Association of Realtors and the National Association of Home Builders are dou-bling their efforts to persuade Congress to extend current limits for Fannie Mae, Freddie Mac and the FHA, which top out at $729,750 for single-family units in the lower 48. Barring legislative action, the top loan limit will drop to $625,500 on Oct. 1. In addition to the lower ceiling, loan limits in most high-cost markets will...

Mortgage securitization rates remained at record levels through the first half of 2011, reflecting a sharp decline in new primary market production and a surge of agency issuance early in the year. A new Inside MBS & ABS analysis reveals that mortgage securitization activity in the first half of 2011 equaled 96.0 percent of loans originated during the same period. That compares to an 84.9 percent securitization rate for all of 2010 and an 85.6 percent rate – the record high – back in 2009. Because it can take weeks or even months before a newly originated mortgage hits the capital markets as collateral backing an MBS, there is a significant slippage between... [Includes one data chart]

One of the primary sponsors of mortgage refinance legislation pending in the Senate told colleagues this week that her legislation could save homeowners and Fannie Mae and Freddie Mac tens of millions of dollars, while acknowledging that it could cost the Federal Reserve billions of dollars in lost investment income. Testifying on behalf of her legislation before a Senate subcommittee on Wednesday, Sen. Barbara Boxer, D-CA, said S. 170, the Helping Responsible Homeowners Act of 2011, “would result in up to 54,000 fewer defaults and produce a net savings up to $100 million for Fannie and Freddie.” Homeowners would see immediate relief. “A one and a half percent reduction in...

The ongoing debate over the need for a government guarantee to sustain the benefits of the to-be-announced MBS market moved this week to the Senate Housing, Banking and Urban Development Committee, where researchers covered both sides of the issue for a group of lawmakers who aren’t likely to act on their counsel any time soon. “Proponents of privatization ignore that the jumbo market does benefit from a government guarantee indirectly in multiple ways,” said Adam Levitin, professor of law at Georgetown University. “The jumbo market has long aped the standards set by the [government-sponsored enterprises] in the conforming market, including...

The efforts of the White House, in concert with the Federal Housing Finance Agency, to jumpstart the underperforming GSE refinance program is almost certain to disappoint when final details are made public, due in no small part to overpromised and inflated expectations, say mortgage market watchers.FHFA Acting Director Edward DeMarco said his agency is “carefully reviewing” the two-year old Home Affordable Refinance Program with the White House in order to help a greater number of underwater Fannie Mae and Freddie Mac borrowers into lower-rate loans.

The chairman of the House Oversight and Government Reform Committee announced late this week that he has opened an investigation into a reported deal struck last month in which Fannie Mae agreed to buy some of Bank of America’s home-loan portfolio.In a letter sent to Federal Housing Finance Agency Acting Director Edward DeMarco, Rep. Darrell Issa, R-CA, requested the FHFA provide the committee documents and a “full explanation of the agency’s decision-making process” regarding the purchase.

The massive legal action that the Federal Housing Finance Agency has initiated against many of the nation’s big lenders on behalf of Fannie Mae and Freddie Mac needs to be resolved forthwith, says an industry attorney, before a prolonged litigation “feeding frenzy” and resulting uncertainty paralyze mortgage market participants.Two weeks ago, the Finance Agency filed legal papers contending that the 17 financial institutions which sold Fannie and Freddie $196 billion of mortgage-backed securities, mostly between 2005 and 2008, duped the GSEs into buying tens of billions of dollars of MBS that went south after the housing bubble burst.

Fannie Mae and Freddie Mac are reportedly in talks with the Securities and Exchange Commission to settle claims that the two GSEs failed to disclose to investors the companies’ exposure to risky subprime mortgages prior to the 2008 housing market crash.