Fannie Mae and Freddie Mac CEOs may not see a sizable pay hike after the Senate approved by unanimous consent a bill to reverse the raises for the GSE executives. The “Equity in Government Compensation Act” approved last week would suspend the $4 million compensation packages for Fannie’s Tim Mayopoulos and Freddie’s Don Layton that were approved early this year after the Federal Housing Finance Agency said the CEOs could be paid as much as $7.26 million. Their salary would now each be capped at the $600,000 they earned prior to the pay hike. That’s a lot less than many individuals in upper management at the GSEs. “Giving massive taxpayer-funded pay raises to Fannie Mae and Freddie Mac isn’t just out of touch, it’s...

Fannie Mae completed its latest credit risk-sharing transaction with reinsurers this week. In CIRT-2015-3, Fannie retains risk for the first 50 basis points of loss on a $7 billion pool of loans. If this $35.2 million retention layer were exhausted, reinsurers would cover the next 250 basis points of loss on the pool, up to a maximum coverage of approximately $176.2 million. Coverage is provided based upon actual losses for a term of 10 years. Depending upon the paydown of the insured pool and the amount of insured loans that become seriously delinquent, the aggregate coverage amount may be reduced at the three-year anniversary and each anniversary of the effective date thereafter.

It has been a full year since the Federal Housing Finance Agency proposed sweeping changes to the Federal Home Loan Bank membership rules and the agency said as recently as this week that the proposal remains under review. With the membership rules up in the air, last week the American Bankers Association penned a letter to the Senate urging that it adopt legislation requiring the FHFA to withdraw the proposal. In September 2014, the FHFA proposed changes that would require members to hold 10 percent of their assets in residential mortgages on an “ongoing” basis and ban captive entities from the definition of insurance companies. The revised asset test was especially controversial among community banks.

Freddie Mac will be the first to use the Common Securitization Platform but the implementation date won’t be released until sometime in 2016, said the Federal Housing Finance Agency in a recent announcement. David Applegate, CEO of Common Securitization Solutions, the joint venture owned by Freddie and Fannie Mae, recently revealed that a large portion of the work has been completed to reach a major milestone in its progress. Applegate said at last week’s ABS East conference in Miami that CSS has completed about 90 percent of the work required for single-class security issuance by Freddie on the CSP. However, in an update detailing the progress in developing the CSP software, the FHFA stopped short of pinpointing a definite timeline and said...

About 30 industry trade groups recently called for Congress to refrain from using GSE guaranty fees as a source of funding for highway programs or any other purposes beyond supporting Fannie Mae and Freddie Mac. The letter, addressed to House Speaker John Boehner, R-OH, as well as leaders Nancy Pelosi, D-CA, Mitch McConnell, R-KY, and Harry Reid, D-NV, aims to prevent the government from tapping g-fees to pay for pet projects. G-fees, used by Fannie and Freddie to protect against losses from loans that default, are a “critical risk management tool,” according to the trade groups who say that increasing g-fees for other purposes imposes an unjustified burden on the housing finance system.

Credit standards appear to be easing more than they have in the past few years in both the government-sponsored enterprise market and non-GSE lending, according to Fannie Mae’s most recent lender survey. Medium and large-sized lenders both reported a notable easing of credit standards for the first time in seven quarters. The gap between lenders reporting easing as opposed to tightening over the second quarter increased to 20 percentage points for ...

Correspondent lenders generated 32.1 percent of the home loans securitized by Fannie Mae, Freddie Mac and Ginnie Mae during the second quarter of 2015. More than either other channel, correspondents excelled at finding homebuyer borrowers, 51.9 percent of their second-quarter production, while refinance loans accounted for 56.5 percent of total agency business. Heavy purchase-mortgage volume meant correspondent loans had lower ... [Includes one data chart]

Don’t expect much movement on legislation to reform the GSEs before the 2016 presidential election. Industry analysts suggest that divisions between Democrats and Republicans along with a housing finance system that is functioning well enough will continue to combine to prevent enactment of GSE reform for some time. At the ABS East conference sponsored by Information Management Network last week in Miami, a variety of industry participants seemed resigned to the fact that Fannie Mae and Freddie Mac will remain under the conservatorship of the Federal Housing Finance Agency for years to come. James Lockhart, vice chairman of WL Ross & Co. and a former director of the FHFA, said the enactment of GSE reform...(Chart, GSE Activity by State)

As energy efficiency plays a growing role in real estate and mortgage credit, Freddie Mac decided to up the ante in its multifamily business and offer a $5,000 green rebate to borrowers. Qualified borrowers with at least 20 units who voluntarily provide an Energy Star score when submitting their loan documents, are eligible. Freddie said it hopes to encourage energy efficiency and affordability in apartment properties and strengthen the market for green investments. Freddie also said rental housing is home to many of the country’s lower-income households who are struggling with housing costs such as rent and utilities. The Environmental Protection Agency estimates that the average commercial building wastes 30 percent of the energy it consumes, often resulting in higher operating costs.

Freddie Mac has offered $4.517 billion in non-performing loans to date and recently released plans to auction $327 million of deeply delinquent non-performing loans in its portfolio. The NPLs are marketed as two geographically diversified pools with bids due from qualified investors by Oct. 6, 2015. The sale is expected to settle in December 2015. JPMorgan Chase Bank is the servicer of the loans. The day after Freddie began marketing that transaction it announced that it sold roughly $1.2 billion of deeply delinquent agency mortgages serviced by Ocwen Loan Servicing, with servicing expected to be transferred after settlement. That sale was part of Freddie's Standard Pool Offerings and the loans have been delinquent for approximately three and a half years, on average.