GSE observers say that the Federal Housing Finance Agency’s Office of Inspector General appears to be blurring the line between constructive critic and backseat driver following the OIG’s most recent report which takes the agency to task for deficient oversight of Fannie Mae’s and Freddie Mac’s business decisions. In a report issued last week, the OIG determined that the FHFA has not established criteria or policies to ensure a rigorous review of GSE business decisions.

The Federal Housing Finance Agency late this week followed through on its promise to develop a post Fannie Mae and Freddie Mac secondary mortgage market infrastructure by releasing for public comment its proposed new securitization platform that could be used by either GSE, as well as by private issuers. The FHFA’s white paper proposed a framework for both a common securitization platform and a model pooling and servicing agreement. Public input on the proposal is due to the Finance Agency by Dec. 3.

The Federal Housing Finance Agency this week announced a second winning bidder of its pilot program to move GSE real estate-owned properties from money-losing foreclosures to money-making rentals and eventually off the books entirely. The FHFA announced that New York-based Cogsville Group LLC was the winning bidder of 94 Fannie Mae-owned properties as part of the FHFA’s REO pilot initiative. The firm paid $2.1 million for a share in a joint venture with Fannie, resulting in an estimated transaction value to the GSE of $11.8 million or 86.2 percent of the properties’ estimated value, according to the transaction summary.

Heavy refinance volume pushed both Fannie Mae and Freddie Mac single-family mortgage securitization up sharply during the third quarter of 2012, well ahead of the pace the two GSEs set in 2011, according to a new Inside The GSEs analysis. Fannie and Freddie issued $335.38 billion in single-family mortgage-backed securities during the third quarter, a 22.4 percent increase from the second quarter, a rebound from the GSEs’ slump during the April-through-June period.

Freddie Mac last week cut some slack in the form of a lifeline to MGIC Investment Corp. which will allow the mortgage insurer to write additional policies even as the MI and the GSE work through a simmering dispute over pool insurance. On Sept. 28, MGIC announced that Freddie has reduced the amount of capital contribution MGIC Investment must pay its principal subsidiary MGIC to $100 million from $200 million. The GSE also extended the deadline for this contribution from Sept. 30 to Dec. 1.

Neither Freddie Mac nor its regulator, the Federal Housing Finance Agency, purposefully limited refinancing opportunities in order to protect the value of the GSE’s investment portfolio, concluded a report by the FHFA’s official watchdog last week. The FHFA’s Office of Inspector General said it found “no evidence” that the GSE or the Finance Agency obstructed homeowners’ abilities to refi in an effort to influence the yields of inverse floating-rate bonds.

Single-family mortgage securitization by Fannie Mae and Freddie Mac increased sharply during the third quarter of 2012, according to a new Inside Mortgage Finance ranking and analysis. New production of mortgage-backed securities by the two government-sponsored enterprises rose 22.4 percent from the second quarter, driven by a hefty 19.4 percent increase in refinance business. Refinance loans accounted for 76.9 percent of GSE securitization during the period, and the dollar volume of refi loan sales rose 19.4 percent from the second quarter. Fannie posted...[Includes three data charts]

The conservator of Fannie Mae and Freddie Mac has been lax in its oversight of business decisions made by the two government-sponsored enterprises and lacks a formal verification process to keep the two companies honest, according to a new audit by the Federal Housing Finance Agency’s official watchdog. The FHFA’s Office of Inspector General found numerous instances where the FHFA didn’t ask the companies and the two GSEs didn’t tell the agency about significant business decisions, even when such approval was required. “FHFA-OIG found that FHFA did not require...

MGIC Investment announced late last week that it won certain concessions from Freddie Mac and the two are working to resolve a dispute regarding mortgage insurance pool pricing by the end of this month. Freddie cut a required capital contribution by MGIC Investment in half and allowed a significant expansion of the number of areas in which an MGIC subsidiary can write new business. “I am pleased with the spirit of cooperation all parties have shown in moving forward to reach this point,” said Curt Culver, chairman and CEO of MGIC Investment and Mortgage Guaranty Insurance Corp. “While there can be no guaranty that the open matters that remain can be successfully resolved, I am hopeful we will continue to make progress.” In May, MGIC filed...

There is a clear need to reform the government-sponsored enterprise structure but how aggressively Congress will move on it and whether the next administration can provide much-needed leadership is unclear, according to housing and mortgage industry experts. Panelists in a forum hosted this week by the Progressive Policy Institute and the American Action Forum said they doubt Congress will be able to deal with the complex issue of GSE reform in 2013. Some among the panel of top economists and housing market experts said it may take a while before Congress can act on any reform legislation, much less in a bipartisan manner. Congress will not be...