Three former Fannie Mae executives, including the company’s one-time CEO, have petitioned a federal judge to toss the securities fraud case the government filed against them late last year. Filed last week in the U.S. District Court for the Southern District of New York, the motion to dismiss contends the Securities and Exchange Commission is thin on proof that the GSE, at the direction of the then top executives, failed to disclose to investors the companies’ exposure to subprime mortgages prior to the 2008 housing market crash.

Mortgages modified by Freddie Mac performed slightly better than Fannie Mae loans in the short term while the performance gap between the two GSEs widened further one year after modification, according to the Office of the Comptroller of the Currency.OCC’s latest Mortgage Metrics Report noted that Freddie loans had an 11.3 percent re-default rate three months after modification, while Fannie mods saw an 11.7 percent rate. At the six-month mark, Freddie stood at 18.1 percent compared to Fannie’s 18.8 percent.

Mortgage lenders delivered a hefty $303.9 billion in single-family home loans to Fannie Mae and Freddie Mac securitization programs during the first quarter of 2012, the biggest flow of new business to the government-sponsored enterprises in over a year, according to a new analysis and ranking by Inside Mortgage Finance. During the first three months of 2012, GSE single-family securitization jumped 16.2 percent from the fourth quarter. It marked the fourth straight quarterly increase in production of Fannie and Freddie mortgage-backed securities after the market troughed...(Includes three data charts)

A mere 4.7 percent of repurchase demands on loans in non-agency mortgage-backed securities have been resolved, according to a new analysis by Inside Nonconforming Markets. The $352.7 million in completed repurchases account for a small portion of the up to $64.18 billion in recoveries analysts estimate non-agency MBS investors could see from representation and warranty issues. According to new filings with the Securities and Exchange Commission, $7.45 billion in repurchase demands on non-agency MBS had been made as of the end of 2011. The first-time reports were filed by securitizers that are still in business and did not include heavyweights such as Bear Stearns, Countrywide Financial, IndyMac, Lehman Brothers and Washington Mutual ... [Includes one data chart]

An ongoing Securities and Exchange Commission investigation into possible misconduct related to Wells Fargo’s sale of almost $60 billion in MBS has resulted in the agency filing a subpoena enforcement action in the U.S. District Court for the Northern District of California against the firm. “The commission is investigating possible fraud in connection with Wells Fargo’s sale of nearly $60 billion in residential MBS to investors,” the SEC said. “Pursuant to subpoenas dating back to September 2011, the bank was obligated to produce (and agreed to produce) documents to the...

Redwood Trust has packaged its fourth non-agency jumbo MBS of the past two years and achieved the lowest credit-enhancement requirement during that span thanks largely to a more appealing geographic mix of properties backing the loans. Sequoia Mortgage Trust 2012-2 looks a lot like the three previous jumbo deals Redwood has issued in its solo effort to re-ignite the non-agency MBS market. In some ways, the collateral is slightly less pristine than some of the earlier transactions, although all four have been backed by very high quality prime loans. Credit enhancement for the AAA-rated classes is 7.15...

Commercial banks solidified their status as the biggest investor class in the MBS market over the second half of 2011, according to a new analysis by Inside MBS & ABS. Banks increased their holdings of residential MBS by some 5.7 percent over the final six months of last year – a period during which the MBS market itself was shrinking by 2.3 percent. That raised the commercial bank share of the MBS market to 21.1 percent. Savings institutions and credit unions, both significantly smaller groups than commercial banks, also boosted their MBS holdings in 2011. In fact, the...(Includes one data chart)

Concern among non-agency MBS investors over principal reductions that will occur under the multistate foreclosure settlement “is much greater than the reality,” said Iowa Attorney General Tom Miller, who played a pivotal role in those negotiations. During a webinar sponsored by Inside Mortgage Finance this week, Miller said that the $25 billion settlement includes protections for MBS investors. He said that negotiators met with MBS investors during the drawn-out process of reaching a settlement with the five largest servicers. The Association of Mortgage Investors has complained that investors...

Ginnie Mae has seen a huge increase in business volume and appears to have adequate reserves, but the agency is still hamstrung by the federal budget process and has work to do to improve its risk management, according to a new Government Accounting Office report. With $1.186 trillion in single-family MBS outstanding and $301.7 billion in new issuance just last year, Ginnie is nearly as big as Freddie Mac – minus the retained portfolio. But the agency has a relatively small staff of full-time employees and has to get around the federal budget process by using business revenues to hire...

Investor appetite for non-agency MBS remained high in the first quarter of 2012 despite the recent uptick in new trading, but this has not done much to push prices above fair value, according to analysts. Through the first quarter of 2012, trading in non-agency MBS has been strong as the average volume in non-agency investment-grade paper more than doubled in January to $1.4 billion, said analysts at Bank of America/Merrill Lynch citing TRACE (Trade Reporting and Compliance Engine) data. TRACE facilitates the mandatory reporting of over-the-counter secondary market transactions in eligible fixed-income...