Both Fannie Mae and Freddie Mac retained sizeable shares of mortgage securities with a not insignificant bump during the fourth quarter of 2011, according to a new Inside The GSEs analysis.The GSEs issued a combined $261.6 billion in MBS in the fourth quarter, a 13.0 percent increase from the third quarter.Fannie and Freddie dropped to $852.8 billion in MBS issued for the year, an 11.1 percent decrease in MBS issuance during the January to December period. The GSEs’ issuance represented 72.1 percent of total MBS produced during 2011.Between the two companies, Fannie and Freddie registered an ample 77.1 percent share of new MBS issued during the quarter that ended Dec. 31, 2011, up from the 69.1 percent the two companies held during the third quarter and surpassing the 74.8 percent share both GSEs held during the first quarter.

A Federal judge in Chicago tabled for the moment the Federal Housing Finance Agency’s hopes of a speedy ruling in its favor of its lawsuit to exempt Fannie Mae and Freddie Mac from the city’s new vacant building ordinance, although the judge appears open to hearing the FHFA’s jurisdictional argument.Last month, U.S. District Court Judge Joan Lefkow denied the FHFA’s request for summary judgment in its lawsuit against Chicago while she ordered the city to file its response to the Finance Agency’s litigation.Filed in December, the FHFA’s lawsuit on behalf of the two GSEs seeks to prevent the city from enforcing the ordinance which requires mortgagees to pay a $500 registration fee for vacant properties and requires monthly inspections of mortgage properties to determine if they are vacant.

The Federal Housing Finance Agency might be backing away from its controversial suggestion to change mortgage servicer compensation from the current 25 basis points of outstanding principal balance to a flat fee of $10 per mortgage, per month for current loans, with no incremental fees other than existing incentive compensation for the servicing of non-performing mortgages. “Considering changes to the structure of mortgage servicing compensation is an important component of improving the operations of the future mortgage market,” an FHFA spokeswoman said. “We received useful input on ...

Both the Federal Housing Finance Agency and Freddie Mac are refuting a published report suggesting that a mortgage finance vehicle at one time employed by the government-sponsored enterprise was designed to profit the company by preventing homeowners from refinancing. An article published this week by ProPublica and National Public Radio contended that Freddie stood to profit from hedging investments known as inverse floaters that would pay higher returns if interest rates rose and more homeowners remained in mortgages with high interest rates. According to ProPublica, Freddie purchased inverse floaters...

Mortgage Guaranty Insurance Corp. announced a new two-year waiver from regulatory capital requirements from the Office of the Insurance Commissioner for the State of Wisconsin, which would allow it to write new business through Dec. 31, 2013. Approved on Jan. 23, the waiver came after the previous waiver expired at the end of last year. As did the prior order, the new waiver allows MGIC to write new business as long as it maintains a level of capital sufficient to keep the company afloat. The new waiver required MGIC to contribute $200 million to MGIC Indemnity Corp. (MIC), a direct subsidiary of MGIC, by Jan. 31 as part of a ...

Expect the run up to the fall elections to curb any meaningful results in terms of a legislative overhaul of Fannie Mae and Freddie Mac. However, industry insiders say it’s quite likely that lawmakers will work through the year to tweak various GSE reform proposals for the next Congress to take up in 2013.As Congress resumed this week following the holiday break, members returned to some 14 bills in the House advancing their way through committee – though only a couple are considered “comprehensive” reform legislation. Meanwhile, two bills filed at the end of last year in the Senate got the other chamber of Congress into the GSE reform debate after a long dormancy.

Despite the Federal Housing Finance Agency’s release of a long awaited study justifying its position against the writedown of underwater GSE mortgages, principal-reduction proponents, including House Democrats, appear poised to redouble their efforts to pressure the FHFA to see things their way.This week, the Finance Agency released its analysis of taxpayer losses to explain the FHFA’s policy decision to exclude principal forgiveness as a policy in favor of principal forbearance, the alternative that the GSEs currently apply to their underwater loans.As of June 30, 2011, Fannie Mae and Freddie Mac had nearly 3 million first-lien mortgages with outstanding balances in which the borrower owed more than the loan on the home was worth.

A trio of real estate finance trade groups is calling upon Congress to leave the GSEs’ guarantee fees alone as lawmakers devise a way to pay for tax cuts for the remainder of 2012.The Mortgage Bankers Association, National Association of Realtors and National Association of Home Builders dispatched a joint letter to House and Senate leaders late this week noting their united opposition “to increasing g-fees for reasons other than minimizing the GSE’s risk exposure.” Late last month, the Federal Housing Finance Agency directed Fannie Mae and Freddie Mac to increase g-fees on new mortgage products by 10 basis points starting April 1.

California remained the biggest source of new single-family mortgages for Fannie Mae and Freddie Mac during 2011, according to the new special report, GSE Market Profile: 2011, from Inside Mortgage Finance Publications.A total of $189.9 billion of home loans on California properties were securitized by the two GSEs, accounting for 22.6 percent of their total business for the year. That was down 15.1 percent from the total California Fannie/Freddie production back in 2010, while the overall GSE market fell 17.0 percent from a year ago.Although fixed-rate mortgages dominated the GSE market in 2011, California produced $17.9 billion in adjustable-rate mortgages – 30.8 percent of the national total. ARMs accounted for just 6.9 percent of the total GSE volume.

The Federal Housing Finance Agency this week less than enthusiastically issued a call for public comment on the potential revival of Property Assessed Clean Energy program loans even as the Finance Agency is appealing the court order mandating issuance of its proposed rule.On Jan. 26, the Finance Agency published in the Federal Register an Advanced Notice of Proposed Rulemaking concerning PACE mortgage assets and a Notice of Intent to prepare an environmental impact statement under the National Environmental Policy Act “to address the potential environmental impacts of FHFA’s proposed action.” Property Assessed Clean Energy programs offer loans for energy-efficiency home improvements. While 27 states and the District of Columbia have legislation in place to permit PACE financing for green homes, in July 2010, Fannie Mae and Freddie Mac stopped purchasing PACE-related mortgages that had automatic first-lien priority over previously recorded mortgages.