Fannie Mae and Freddie Mac would be excluded from purchasing loans subject to Property Assessed Clean Energy liens under a rule formally issued by the Federal Housing Finance Agency regulator two weeks ago. The FHFA’s notice of proposed rulemaking, was published in the June 15 Federal Register for public comment in compliance with a federal court order. The proposed rule directs Fannie and Freddie “not to purchase any mortgage where PACE financing with a priority lien was placed on the underlying property. Such financing moves ahead of the pre-existing first mortgage in lien priority, and thereby subordinates Fannie Mae and Freddie Mac security interests in the property.”

Fannie Mae’s and Freddie Mac’s home retention activity declined for the most part during the first quarter of 2012, according to a new analysis of Federal Housing Finance Agency data by Inside The GSEs. Total loss mitigation activity – total home retention efforts and foreclosure alternatives combined – declined 5.0 percent during the first quarter of the year to 214,812 and was down 14.3 percent from year-ago levels. Our analysis was based on the FHFA’s First Quarter 2012 Foreclosure Prevention Report. Total home retention efforts came to 111,739 at the end of the first quarter, a decrease of 7.4 percent from the fourth quarter 2011 and down 22.4 percent from the same period a year before.

The Federal Housing Finance Agency last week finalized a rule which establishes prudential standards relating to the management and operations of Fannie Mae, Freddie Mac and the Federal Home Loan Banks. The Housing and Economic Recovery Act of 2008 requires the FHFA director to establish standards that address 10 separate areas relating to the management and operation of the GSEs and FHLBanks and authorizes the director to establish the standards by regulation or by guideline.

For the second time in less than a year, Fannie Mae’s and Freddie Mac’s conservator has gone to court in Illinois to assert that the two federally chartered government-sponsored enterprises are exempt from certain local and state property assessments. Last week, the Federal Housing Finance Agency filed suit in the U.S. District Court Northern District of Illinois, Western Division, against the Illinois Department of Revenue and county clerks to block local government efforts to collect real estate transfer taxes from Fannie and Freddie. The FHFA suit was in response to litigation filed by DeKalb County and five other counties to compel...

Mortgage lenders and servicers face increased congressional and regulatory attention and pressure over how they should respond to the unique needs and problems active-duty U.S. military personnel face handling their mortgages, particularly when they are transferred. Sen. Richard Shelby, AL, ranking Republican on the Senate Banking, Housing and Urban Affairs Committee, emphasized during a hearing this week the disruptions that Permanent Change of Station orders can cause service members. “When PCS orders are issued, service members are required to move even if they owe more on their mortgage...

Fueled by a pent-up gusher of refinance activity on deeply underwater mortgages, the Home Affordable Refinance Program appears on pace to set a new record high in the second quarter of 2012, according to a new Inside MBS & ABS analysis. Based on loan-level data through the midway point in June, securitization of HARP loans by Fannie Mae and Freddie Mac is expected to reach an estimated $53.3 billion in the second quarter. That would represent a 27.1 percent increase over the previous record, $42.0 billion, set in the first three months of this year. A big chunk of the increase is...(Includes two data charts)

The Federal Housing Finance Agency should address Fannie Mae and Freddie Mac’s representation and warranties repurchase demands with an eye toward making the two government-sponsored enterprises’ buyback policies more transparent, industry groups say. The volume of repurchase demands by the GSEs continues at “unprecedented levels” as Fannie and Freddie made nearly $100 billion in repurchase demands over the past three years, the Mortgage Bankers Association said in a comment letter on the FHFA’s strategy for GSE conservatorship. “MBA supports lender reps and warrants as an effective method of...

The Federal Housing Finance Agency should continue projects already underway to create more uniformity in Fannie Mae and Freddie Mac operations and extend those efforts to reduce the liquidity gap in the MBS issued by the two government-sponsored enterprises, a key Wall Street group said. Giving priority to the alignment of Fannie and Freddie operations will “set the stage for the longer-term future of the enterprises and mortgage finance in this country more broadly, including non-agency securitization,” said the Securities Industry and Financial Markets Association. Recent FHFA projects to standardize...

The Federal Housing Finance Agency this week said it is still deliberating writedowns on Fannie Mae and Freddie Mac mortgages as industry insiders aren’t sure what to make of the agency’s recent thumbs up to GSE participation in two state principal reduction programs. Last month, the GSEs – with the FHFA’s blessing – opted to participate in principal reduction programs in California and Nevada. Both programs will use part of the $7.6 billion Hardest Hit Fund to pay down the loans Fannie and Freddie own or guarantee. The FHFA noted that critical directives issued by the GSEs last year cleared the way for participation in such programs as long as the servicers or the GSEs would not have to match those funds.

Fannie Mae demonstrated measurable progress during 2011 while conditions at Freddie Mac neither worsened nor improved significantly but both GSEs have ample room for improvement, according to a report issued this week by the Federal Housing Finance Agency. The FHFA’s fourth annual Report to Congress deemed the two GSEs “critical supervisory concerns” last year with “continuing credit losses” coming primarily from loans originated during the years 2005 to 2007. The report identified “key challenges facing each company, including the ongoing stress in the nation’s housing markets, the challenging economic environment and the uncertain future facing the enterprises,” noted the FHFA. “However, management and the boards were responsive throughout 2011 to FHFA’s findings and challenges and took appropriate steps to begin resolving identified issues.”