Fitch Ratings has updated its criteria for analyzing non-agency MBS for potential rating changes as well as criteria for determining whether cash flows from underlying residential mortgages are adequate to make payments on the rated non-agency MBS. Under the latest change to its surveillance process for non-agency MBS, Fitch said it will consider loan concentration risk as part of its surveillance analysis of pools that have a small number of mortgages remaining and lack certain structural features, such as sequential payment distribution or a subordination floor. Fitch’s latest criteria change will address ...

House Republicans this week pushed through six more bills designed to wind down Fannie Mae and Freddie Mac but not before Democrats debated and managed to pass a couple of speed-bump amendments. The focus in the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises thus far has been on an assortment of narrow measures that would continue to squeeze Fannie and Freddie’s activities and increase GSE oversight while in conservatorship. During a markup this week, Democrats and some disaffected GOP subcommittee members spent a substantial amount of ...

Witnesses testifying before the Senate Banking, Housing and Urban Affairs Committee this week had diverse opinions about the effectiveness of the Dodd-Frank Act to protect investors, but one thing was clear: without the money, the Securities and Exchange Commission will never be able to get anything done. Republicans and Democrats in the committee were not-so-surprisingly at odds over the now one-year-old law. Sen. Tim Johnson, D-SD, urged members of the committee and the witnesses present to “give these provisions a chance to work.” Meanwhile, Sen. Richard Shelby, R-AL, argued that Dodd-Frank “has not ...

Proponents of an expanded program to refinance underwater Fannie Mae and Freddie Mac mortgages may find a sympathetic ear at the White House, which has talked recently of re-focusing on the struggling housing market, but MBS analysts don’t think the proposal would have a huge impact. Sen. Barbara Boxer, D-CA, early this year introduced the Helping Responsible Homeowners Act, which would require the government-sponsored enterprises to go beyond the limits of the existing Home Affordable Refinance Program, which was implemented administratively. Loans refinanced under the Boxer program could not be ...

Most of the top mortgage originators of agency-eligible home loans posted significant declines in MBS issuance during the second quarter, but a handful of firms bucked the current, according to a new ranking and analysis based on the Inside Mortgage Finance MBS Database. Overall agency MBS production declined 33.8 percent from the first quarter to the second, hitting its lowest three-month volume since the end of 2008. Through the midway point in 2011, single-family mortgage securitization by Fannie Mae, Freddie Mac and Ginnie Mae was off ... [includes two data charts]

High-risk mortgages securitized by Fannie Mae and Freddie Mac continued to drag down earnings for the government-sponsored enterprises in the first quarter of 2011, forcing the two GSEs to go deeper into debt to the federal government. Fannie and Freddie lost a combined $13.0 billion on their mortgage-backed security guarantee programs during the first quarter, a significant deterioration from the $6.6 billion the GSEs lost during the previous quarter, according to the Federal Housing Finance Agency’s latest conservatorship report. Since the beginning of 2008 through the first quarter of 2011, Fannie and Freddie have burned through...

A new Inside Mortgage Finance analysis reveals that the proposed qualified residential mortgage standard drafted earlier this year by federal regulators would affect individual mortgage originators in dramatically different ways. As the regulators acknowledged in their proposed rule, a significant share of Fannie Mae and Freddie Mac loans originated through 2009 would not meet new standards for loan-to-value ratios, borrower credit history, debt-to-income ratio and other factors. Most loans being sold to the government-sponsored enterprises under today’s pristine underwriting and pricing policies also would fail to meet the... [Includes one data chart]

Another bipartisan bill to overhaul the federal mortgage finance system introduced by two House members this week would eliminate but effectively merge Fannie Mae and Freddie Mac, replacing the two GSEs with a “secondary market facility” that would issue and guarantee mortgage-backed securities.The bill, H.R. 2413, the Secondary Market Facility for Residential Mortgages Act of 2011, would create a single entity, owned by the federal government, that would issue MBS. The MBS would have an explicit government guarantee paid for by a guarantee fee set by the Federal Housing Finance Agency.

It would be “wholly inappropriate” for the Treasury Department and the Federal Housing Finance Agency to permit Fannie Mae and Freddie Mac to pursue a potential role in a new yet-to-be-launched $2 billion bond program, according to the top Republican members of the House Financial Services Committee.In an effort to shut down thoughts of potential expansion of the two government-sponsored enterprises into a new line of business, Committee Chairman Spencer Bachus, R-AL, Vice Chairman Jeb Hensarling, R-TX, and four of the committee’s subcommittee chairman dispatched a letter last week to Treasury Secretary Tim Geithner and FHFA Acting Director Edward DeMarco to express their “concern.”

Fannie Mae and Freddie Mac issued $154.95 billion in single-family mortgage-backed securities during the second quarter of 2011, a 40.6 percent drop from the first three months of the year.The recent April-June cycle represented the second straight quarterly decline in business volume since the fourth quarter 2010 surge when the two GSEs issued $331.5 billion in MBS.