The industry’s foreclosure debacle – including the validity of the transfer of mortgages and the role of MERS – has raised a number of critical public policy questions that industry leaders and policymakers will need to resolve if the market and the industry are to return to a fully functioning form once again, a leading industry legal expert told mortgage compliance officials recently...

New federal restrictions on mortgage broker compensation will likely add momentum to the shift away from wholesale mortgage production programs and ultimately dampen MBS prepayment speeds, according to an analysis by Barclays Capital. Most major primary market lenders have been moving away from the broker market since the housing sector began to crumble in 2007. According to Inside Mortgage Finance, an affiliated newslet-ter, the broker share of new mortgage originations peaked in 2005 at 31.3 percent of primary market lending. Between 2005 and 2007, brokers accounted...

Serious delinquency rates on subprime mortgages improved in the first quarter of 2011 for a fifth consecutive quarter. However, analysts warn that the sector faces increased risks due to scrutiny from federal regulators and Congress. Meanwhile, subprime originations remain all but nonexistent, causing the amount of subprime mortgages outstanding to fall to an estimated $605.0 billion in the first quarter of 2011, according to Inside Nonconforming Markets. In 2005, an estimated $625.0 billion in subprime mortgages were originated, with another...[includes one data chart]

More than two years after being placed into government conservatorship, Fannie Mae and Freddie Mac remain “critical supervisory concerns” as “key challenges” at both government-sponsored enterprises continue to compel the GSEs to rely on federal funding to stay afloat, according to the Federal Housing Finance Agency. FHFA’s annual report to Congress this week noted losses from mortgages originated from 2005 through 2008, as well as forecasted losses from that same pre-conservatorship period, remain a continuing source of...

In light of Fannie Mae and Freddie Mac’s federal conservatorship status and the resulting control by the Treasury Department, the two GSEs are “effectively part of the government” and their operations should be reflected in the federal budget, according to the Congressional Budget Office.CBO has concluded that using a fair-value approach to estimate Fannie and Freddie’s subsidy costs is the best way to give Congress and taxpayers the most accurate accounting information.

The sponsor of legislation that would make Fannie Mae and Freddie Mac subject to the Freedom of Information Act’s government transparency provisions told Inside The GSEs this week he is optimistic his bill has a “real fighting chance” of passage in the House.Rep. Jason Chaffetz, R-UT, said his bill, H.R. 463, The Fannie Mae and Freddie Mac Transparency Act of 2011, has “picked up momentum” following a hearing two weeks ago, and the headlines it produced, in which the GSEs’ regulator panned the bill as potentially harmful to Fannie and Freddie.

Don’t hold your breath waiting for a legislative remedy in Congress to reform and/or replace Fannie Mae and Freddie Mac. The expectation on the Hill and throughout the industry is that meaningful action on GSE reform won’t occur until 2013 at the earliest, industry sources tell Inside The GSEs.

Republicans in Congress appeared to pull one over on President Obama and any intention he may have to make a recess appointment of Elizabeth Warren to be the first head of the new Consumer Financial Protection Bureau. House Speaker John Boehner, R-OH, refused to allow a vote on the Senate’s adjournment resolution, preventing...

The chairman of the House Budget Committee said this week that a full and transparent accounting of the cost to taxpayers of the federal takeover of Fannie Mae and Freddie Mac is the first, best step to determine how to wind down the two government-sponsored enterprises.During a hearing on taxpayer exposure in the housing markets relating to Fannie, Freddie and the FHA, Rep. Paul Ryan, R-WI, took aim at the White House’s plan for a post-GSE mortgage market. “While the Treasury Department has put forward a ‘framework for reform,’ the Obama administration still...

Mortgage investors are calling on federal policymakers to bring more transparency into the securitization process along with a host of other best practices in order to attract sorely needed private capital back into the mortgage marketplace. “Today, mortgage investors face enormous challenges in the capital markets due to opacity, an asymmetry of information, poor underwriting, conflicts-of-interests among key parties in the securitization process, as well as the inability to enforce...