Here's an odd turn of events: Freddie Mac might bail out Uncle Sam. Meanwhile, the mortgage insurance industry continues to mend.

David Akre of Five Oaks projects that in a few years, issuance of non-agency jumbo MBS could reach $300 billion annually.

The MBS lawsuits target Barclays, Credit Suisse, Goldman Sachs, JPMorgan Chase, Morgan Stanley, Residential Funding Securities, Royal Bank of Scotland, UBS and Wachovia.

Fannie Mae seller/servicers also can dodge the maintenance fee if they have $25 million in Fannie servicing or paid $5,000 in technology fees.

Besides Citi, a handful of large depositories are in the midst of wrapping up sizable MSR auctions this week, including offerings from Wells Fargo and Flagstar Bancorp.

Citadel Servicing CEO Dan Perl said "the phones are ringing like a son-of-a-gun" at his nonprime lending shop.

The jumbo features that Moody's worries about include super senior support bonds, exchangeable securities, principal-only bonds, and pool interest-only bonds.

The talk has prompted speculation that the FHFA could lower the conforming loan limit to $400,000 or, as conservator of the GSEs, direct them to reduce high-cost loan limits.

Over the past two years, upwards of $1 billion has been raised by private-equity funds seeking to buy servicing rights in the secondary market.

Loan officers, so far, have been spared the layoff carnage, but that may change depending on where volumes wind up.