Fannie Mae and Freddie Mac did significantly less business during the first quarter of 2014 along just about every metric you can think of, but the two government-sponsored enterprises saw out-sized declines from their biggest customers. The top five GSE sellers accounted for just 33.3 percent of single-family mortgage deliveries during the first quarter of this year, according to a new Inside Mortgage Trends analysis of ... [Includes two data charts]

While Congress is halfway through its two-week Easter/Passover recess, political pressure continues to build against the Senate’s bipartisan housing finance reform legislation, leading to growing doubt whether the scheduled markup of the bill will occur as scheduled later this month. At the moment, the Senate Banking, Housing and Urban Affairs Committee has only the bare minimum majority of 12 of the 22 committee members pledged to support the GSE legislative reform bill crafted by Chairman Tim Johnson, D-SD, and Ranking Member Mike Crapo, R-ID.

While the mortgage and housing industry awaits with growing impatience for a public statement from the recently appointed head of the Federal Housing Finance Agency, market observers expect Mel Watt to speak only when he is good and ready. The former 11-term North Carolina Democrat Congressman has been silent since he was sworn in to his position as FHFA director in early January. Watt has made almost no public statements nor granted any media interviews but he has spent the past weeks “doing his homework” and quietly meeting with industry trade groups seeking input.

New groups of disgruntled GSE junior shareholders have taken their demands for redress to the next level by rallying against the Senate’s pending bipartisan housing finance reform legislation. Earlier this month, the Coalition for Mortgage Security said it would campaign for legislation that protects the rights of Fannie Mae and Freddie Mac investors. The group opposes the reform legislation fronted by Sens. Tim Johnson, D-SD, and Mike Crapo, R-ID, the chairman and ranking member, respectively, of the Senate Banking, Housing and Urban Affairs Committee.

The Federal Housing Finance Agency and the city of Chicago have reached a face-saving settlement in a longstanding legal dispute over whether Fannie and Freddie, as entities under federal conservatorship, are subject to the city’s vacant-building ordinance. Under the terms of a settlement reached earlier this month but announced last week, the two GSEs will voluntarily register vacant properties with the city but won’t be subject to a $500 registration fee. The FHFA will also no longer seek to recover registration fees or penalties already paid to Chicago.

The recently installed head of the Federal Housing Finance Agency is getting a lot of conflicting advice about whether Fannie Mae and Freddie Mac should contribute to the housing trust funds. Last week in a letter to FHFA Director Mel Watt, House Financial Services Committee Chairman Jeb Hensarling, R-TX, urged Watt to continue the Finance Agency’s five-year old policy of withholding GSE contributions to the trust funds. Hensarling’s letter – co-signed by Reps. Scott Garrett, R-NJ, and Ed Royce, R-CA – followed a similar letter by GOP senators in early March, which countered a January letter by 33 Democrats calling on Watt to authorize Fannie and Freddie funding to the National Housing Trust Fund immediately.

Modified Freddie Mac mortgages performed somewhat better than Fannie Mae loans in the short term while the performance gap between the two GSEs closed two years after modification, according to the Office of the Comptroller of the Currency. The OCC’s latest Mortgage Metrics Report noted that Freddie loans had a 15.9 percent re-default rate three months after modification, while Fannie mods saw a 16.4 percent rate. At the six-month mark, Freddie stood at 22.7 percent compared to Fannie’s 23.6 percent.

In the wake of sharp increases in commercial bank borrowing from the Federal Home Loan Bank system in order to keep up with new international bank-liquidity rules, the Federal Housing Finance Agency should be more transparent in reporting FHLBank advances, according to the agency’s official watchdog. The FHFA’s Office of Inspector General noted in an audit released Wednesday that FHLBank system advances have been increasing, reaching $492 billion by year-end 2013. The growth in advances has been driven primarily by the four largest members of the system – JPMorgan Chase, Bank of America, Citigroup and Wells Fargo.

A New York state judge last week dismissed with prejudice a $567 million legal action brought by the Federal Housing Finance Agency against Deutsche Bank in 2012 over the bank’s refusal to repurchase hundreds of millions of residential mortgage-backed securities from Freddie Mac. Judge Eileen Bransten of New York’s State Supreme Court in Manhattan ruled the FHFA’s suit is barred by New York’s six-year statute of limitations.The FHFA sought to have the bank cover Freddie’s losses on defective MBS purchased from a $1.4 billion transaction.

Activity Plunges. Fannie Mae and Freddie Mac securitized just $29.95 billion of single-family mortgages with private mortgage-insurance coverage during the first quarter of 2014, a 30.9 percent decline from the previous period, according to an analysis and ranking by Inside Mortgage Finance, an affiliated publication. The steepness of the private MI downturn was in line with the 29.1 percent downturn in overall business at the two GSEs from the fourth quarter of 2013. And the flow of private MI loans in early 2014 was down 40.2 percent from the first quarter of last year, a less severe drop than the 63.7 swoon in the overall GSE market over that period.