The heavyweight Wall Street group that sets the to-be-announced MBS standard is pushing federal regulators to take aggressive steps to keep Fannie Mae and Freddie Mac programs aligned as much as possible as the government-sponsored enterprises develop a new single security. In a sternly written letter to the GSE regulator, the Securities Industry and Financial Markets Association warned that the TBA market could be disrupted if Fannie and Freddie policies diverge too much under the new system in which the GSEs would issue fully-fungible securities. “If performance and credit risk are not aligned, then the securities will not be fungible and the market will not trade them as if they are,” the group said. SIFMA argues...

Freddie Mac’s Structured Agency Credit Risk deals and Fannie Mae’s Connecticut Avenue Security transactions have accounted for about 90 percent of risk transfers by the two government-sponsored enterprises. But the Federal Housing Finance Agency is pushing the GSEs to test new structures. FHFA said in a recent report that its longer term goal for the STACR and CAS products is for the GSEs to transition from debt issuance to credit-linked notes. That structure would be similar to enterprise debt issuances, but a trust would issue the note instead of the GSE. Principal and interest payments on the STACR and CAS debt issuances are...

Fannie Mae and Freddie Mac last month saw sharp percent declines in new issuance of single-family mortgage-backed securities, and they are capturing less of the conventional-conforming market.The two GSEs generated $65.94 billion in single-family MBS in August, down 20.8 percent from July, according to a new Inside The GSEs analysis. Monthly volume has seesawed through most of 2015, driven in part by how much seasoned-loan business they get. Most of the August decline in new issuance stemmed from a sharp drop in Freddie’s vintage-loan activity. After securitizing $8.00 billion of loans aged more than three months in July – most of them delivered by Bank of America – Freddie securitized just $99.6 million of such loans in August.

In the years after the financial crisis, lenders have tried to limit the amount of repurchase demands from the government-sponsored enterprises by tightening underwriting requirements, according to an analysis by the Urban Institute’s Housing Finance Policy Center. The HFPC noted that the percentage of mortgages that Fannie Mae and Freddie Mac have put back to lenders due to violations of representations and warranties for originations in recent years ...

Fannie Mae launched the Home Purchase Sentiment Index this week to give monthly updates on the direction of the housing market from a consumers point of view. Results showed that attitudes toward the current home-selling climate have dipped back to their April 2015 level thanks to recent rising mortgage rates and economic concerns, according to Doug Duncan, Fannie’s chief economist.The index will be released on or around the seventh day of each month. The HPSI takes results from Fannie’s consumer-focused National Housing Survey to measure current attitudes toward the housing market. This index is different from other consumer economic sentiment indices because it’s devoted exclusively to housing. Fannie said it will help industry players make better informed business decisions. The GSE constructed...

As they approach their eighth year in conservatorship, Fannie Mae and Freddie Mac generate a lot of revenue for the government and dominate the conventional-conforming mortgage market. But both GSEs are forced to hold less and less capital, and a bad quarter or two could force another round of bailouts. Aside from lawsuits by disgruntled GSE shareholders, pressure appears to be growing for a new approach that would allow the two to rebuild their capital. According to reports, Rep. Mick Mulvaney, R-SC, may introduce such a bill in one of the least hospitable places it could land, the House Financial Services Committee.

The Federal Housing Finance Agency and the Consumer Financial Protection Bureau recently teamed up to release a joint technical report detailing the progress made so far in creating a National Mortgage Database. They also made a few changes including updating the sample design and merging with other data sources for more detailed information. The database has been in the works for 2.5 years but completion of the joint venture may still be a ways away. The NMDB will be a resource for research and analysis of the U.S. residential mortgage market. The database, the first mortgage data repository of its kind, according to the two agencies, includes information about the mortgage market based on a 5 percent sample of residential mortgages.

In the Fairholme Funds v. The United States case, Judge Margaret Sweeney ruled in favor of the Federal Housing Finance Agency to keep documents in the case sealed under “protected information,” according to an order filed on Sept. 4. The court denied the motion by the plaintiffs and said it was too early to consider unsealing the documents since the case is still in the discovery phase. “Because this case is in the jurisdictional discovery phase, the court finds that it is premature to grant at this juncture plaintiffs’ various motions to remove the ‘protected information’ designation from certain deposition transcripts and documents produced during jurisdictional discovery,” said the order.

Moody’s Investors Service recently upgraded three early GSE risk-sharing transactions from 2013 and 2014 that performed better than the rating service initially expected. Freddie Mac’s STACR 2013-DN2 and STACR 2014-DN1 along with Fannie Mae’s CAS 2014-C01, each designed to provide credit protection against the performance of reference pools of prime first-lien conforming mortgages, were upgraded. These are different from a typical residential mortgage backed security transaction in that note holders aren’t entitled to receive cash from the mortgage loans in the reference pools. Instead, Moody’s said the timing and amount of principal and interest that Freddie or Fannie are obligated to pay on the notes are linked specifically to the performance of the mortgage loans in the reference pool.