The CEOs of Fannie Mae and Freddie Mac told lawmakers last week they have been working to manage all expenses prudently at the taxpayer-subsidized government-sponsored enterprises even as they sought to explain away reports that the two GSEs ran up a six-figure bill attending an industry convention in Chicago in October.Testifying before the House Financial Services Subcommittee on Oversight and Investigations, Fannie CEO Michael Williams and Freddie CEO Charles Haldeman noted the GSEs’ importance in the current and future mortgage markets even as they cited their efforts to reduce overall expenses through money-saving cuts and improvements in operational efficiency over the last three years.

A proposed radical shift in how lenders are paid for servicing Fannie Mae and Freddie Mac mortgages would make the business less feasible and skew the competitive landscape even more than it is, according to the Mortgage Bankers Association. In a comment letter to the Federal Housing Finance Agency, the MBA said the regulator and the two government-sponsored enterprises ought to shelve their controversial plan to reform servicing compensation. The FHFA and the GSEs have focused on two alternatives: a fee-for-service model favored by the agencies, and an industry proposal to reduce the...

Jumbo lenders do not expect the higher FHA loan limits to have any adverse impact on their GSE business. Anyone seeking a loan above $625,500 only has one choice, and that is FHA, but the real question is how much business the conventional market would lose to FHA, lenders said. In addition to the higher loan limit, the FHA insures loans of more than 80 percent loan-to-value ratio and requires a 3.5 percent downpayment. The GSEs require a 20 percent downpayment on their jumbos. On the other hand, the private market offers loans above the GSE limits but does not originate loans in excess of 80 percent LTV. “For people seeking under-80 LTV loans, it is unlikely that ... [Includes one data chart]

The decision to restore “emergency” high-cost loan limits for the FHA, but not for Fannie Mae and Freddie Mac, will likely have a negligible impact on the government-sponsored enterprises, according to a new Inside Mortgage Finance analysis of agency jumbo mortgage activity. During the first nine months of 2011, single-family loans exceeding $625,500 – the top GSE loan amount for high-cost markets since Oct. 1 – accounted for an infinitesimal 1.5 percent of Freddie Mac’s total single-family securitization. Although the FHA can resume insuring...(Includes three data charts)

Private mortgage insurers are moving to adopt policies to fit with the recently expanded Home Affordable Refinance Program offered by Fannie Mae, Freddie Mac and the Federal Housing Finance Agency. Genworth Financial said that it’s all in, announcing last week that its U.S. mortgage insurance business is making changes so it can fully support HARP 2.0. The upgraded changes to HARP from the two government-sponsored enterprises are designed to enable more underwater borrowers to refinance their residential mortgages at today’s record-low interest rates. Genworth says the changes...

For an all too brief moment last week there was bipartisanship on Capitol Hill as exasperated Democrats and Republicans took turns questioning and berating the CEOs of Fannie Mae and Freddie Mac and their regulator surrounding the issue of executive compensation at the two GSEs.Federal Housing Finance Agency Acting Director Edward DeMarco was called before the Senate Banking, Housing and Urban Affairs Committee and the House Committee on Oversight and Government Reform to explain some $13 million in performance bonuses to Fannie CEO Michael Williams and Freddie CEO Charles Haldeman and eight other senior executives at the taxpayer-subsidized firms.

Details about the revised Home Affordable Refinance Program revealed few surprises in the seller-servicer bulletins issued by Fannie Mae and Freddie Mac last week with only a modest expansion in program activity expected.Among the noteworthy revisions under HARP 2.0, Fannie and Freddie have eliminated the existing cap on loan-to-value ratio, relaxed representation and warranty stipulations and reduced loan-level price adjustments for most HARP loans.

Freddie Mac is unwrapping a new set of incentives for its HomeSteps properties to both homebuyers and real estate agents this winter in an effort to pick up the sales pace of the GSE’s real-estate owned inventory.Through January 31, 2012, Freddie is offering homebuyers up to 3 percent of the final sales price toward closing costs while selling agents representing the owner-occupant buyer would receive a $1,000 bonus under the incentive plan.

Both Fannie Mae and Freddie Mac retained their hefty shares of mortgage-backed securities with something of a bump during the third quarter of 2011, according to a new Inside The GSEs analysis.The GSEs issued a combined $174.8 billion in MBS in the third quarter, a 12.8 percent increase from the second quarter. Compared to the third quarter of 2010, Fannie and Freddie saw an 11.2 percent decrease in MBS issuance during the first nine months of the year.