Elsewhere, in the report FHFA claims significant progress has been made on the development and initial testing of the GSEs’ common securitization platform.

Meanwhile, a new report from Compass Point Research is predicting that the FHFA will establish a final risk-to-capital threshold for MIs of 18:1.

“Watt will not lower the ceiling for 2014,” said one mortgage insurance executive. “Maybe, he will change them at some point but, not next year.”

HUD has been steadily auctioning off nonperforming mortgages the past few months. Sources in the market disclosed to IMFnews who some of the winning bidders are. They include: Credit Suisse, Ellington, Kondaur, PIMCO and Varde.

The "good" news for lenders is that interest in the mortgage industry is still strong despite declining volumes and shrinking profit margins.

As a group, banks and thrifts reported net earnings of $4.76 billion on their mortgage-banking activity during the third quarter, a 42 percent drop from the second quarter.

In letters to two government agencies, a group of 10 Democrat lawmakers said the FHFA should continue to provide access to government-sponsored enterprise MBS guaranties and the Department of Housing and Urban Development should allow FHA mortgage insurance in such communities.

Residential originators have altered their processes and interactions with brokers to reduce potential underwriting and appraisal defects.

Some sellers of residential servicing rights are selling bulk, but are also entering into "flow" components.

The IG's office of the Federal Housing Finance Agency is working with various U.S. Attorneys on reviews of lenders’ loan origination practices to determine their compliance with enterprise requirements.