The Fixed Income Clearing Corp., a subsidiary of the Depository Trust & Clearing Corp., has filed an application with the Securities and Exchange Commission to provide central counterparty (CCP) and pool netting services for MBS transactions. According to the filing, the CCP and new pool netting services would be available through the FICC’s MBS Division. Through its subsidiaries, the DTCC provides clearing, settlement and information services for equities, corporate and municipal bonds, government and private MBS, money market instruments and over-the-counter derivatives. The DTCC...

Republican lawmakers in the House advanced an ambitious bill to create a regulatory framework for non-agency mortgage securitization over its first legislative hurdle this week, although they failed to gain much Democratic support and the future for mortgage reform legislation in the Senate remains highly uncertain. The House Financial Services Subcommittee on Capital Markets and the Government Sponsored Enterprises approved draft legislation, the Private Mortgage Market Investment Act, introduced by its chairman, Rep. Scott Garrett, R-NJ. The amended legislation, which...

The volume of home mortgage debt outstanding sank to a five-year low as of the end of third quarter of 2011, according to new data released by the Federal Reserve. The agency reported that the outstanding volume of single-family mortgage debt fell 0.6 percent during the third quarter, dropping to $10.336 trillion. That marked the 15th consecutive quarterly decline and the lowest level since the third quarter of 2006. The only component in the servicing market that’s showing much growth is the Ginnie Mae program, where the outstanding balance of...(Includes two data charts)

The Federal Housing Finance Agency filed a lawsuit in the U.S. District Court for the Northern District of Illinois against the City of Chicago this week to keep it from enforcing its recently amended “Vacant Buildings Ordinance” against Fannie Mae and Freddie Mac. The move may provide servicers a way to fight the ordinance without bringing upon themselves any enforcement action from the city while the litigation is pending, according to some observers. “The City of Chicago is interfering unlawfully with FHFA’s federally mandated oversight and exercise of discretion, as conservator...

The Inspector General assigned to watch the Federal Housing Finance Agency is “actively investigating” possible fraud in mortgage securitization, loan origination, servicing and loss mitigation activities, the IG said during a hearing in the Senate Banking, Housing and Urban Affairs Committee this week. FHFA Inspector General Steve Linick reiterated observations in his organization’s semiannual report released last week that the FHFA sometimes shows “undue deference” to the government-sponsored enterprises and has not always been as proactive in its oversight as it should have...

Republican lawmakers on both sides of Capitol Hill are pushing harder for secondary mortgage market reform legislation as the first session of the 112th Congress moves toward a holiday break. The House Financial Services Subcommittee on Capital Markets and the Government Sponsored Enterprises this week approved legislation aimed at boosting the non-agency mortgage securities market by creating an extensive federal regulatory framework. The bill, approved on a party line vote, does not address the fate of Fannie Mae and Freddie Mac, nor does it provide for any federal backing for...

Home prices remain under stress. The CoreLogic Home Price Index shows that home prices have decreased 1.3 percent from September to October, making it the third consecutive month in which home prices have been on a downward slide. Looking at it from a wider scope, national home prices (including distressed sales) have decreased 3.9 percent from Oct. 2010 to Oct. 2011. Excluding distressed sales, Oct. 2011 posted a 0.5 percent yearly decline. States in the best shape, when including distressed sales, are West Virginia, with 4.8 percent price appreciation; South Dakota, with 3.1 percent...

Commercial banks reported a robust $4.91 billion in mortgage banking earnings during the third quarter of 2011, according to a new analysis of bank call report data by Inside Mortgage Trends. Mortgage banking income was up 52.8 percent from the three months ending in June, reaching the industry’s highest level since the end of 2009. Despite the improvement, year-to-date mortgage banking earnings were still down 4.8 percent from the first nine months of 2010. The surge in mortgage banking earnings resulted from increased loan origination and secondary market activity. Banks reported...(Includes one data chart)

Debt issuance for Fannie Mae, Freddie Mac and the Federal Home Loan Banks all recorded increases in new debt issuance during the third quarter of 2011.The three GSEs collectively issued $797.7 billion in new debt issue during the third quarter, a 9.8 percent increase from the previous quarter, while GSE debt outstanding at $2.152 trillion declined 4.8 percent from the second quarter.

Lawmakers and experts reviewing a proposed bill that seeks to drastically overhaul the secondary mortgage market without the need for Fannie Mae and Freddie Mac question whether the Federal Housing Finance Agency is the most appropriate choice to implement key components of the program.The Private Mortgage Market Investment Act, drafted but not yet filed by Rep. Scott Garrett, R-NJ, would create a heavily regulated mortgage-backed securities market made up solely of private entities that would function with no federal guarantee at all.