Legislation introduced this week by a bipartisan group of senators would seek to “jumpstart” the stalled effort in Congress to implement legislative reform of Fannie Mae and Freddie Mac, but industry observers say the measure may also act to hinder cash grabs by government officials when the Treasury Department begins its “sweep” of the GSEs’ profits. The Jumpstart GSE Reform Act – sponsored by Sen. Bob Corker, R-TN, with co-sponsors Sens. Mark Warner, D-VA, David Vitter, R-LA, and Elizabeth Warren, D-MA – would prohibit any increase in Fannie’s and Freddie’s guaranty fee from offsetting other government spending. “The reality is that if Congress were to spend g-fee revenue from the GSEs on other programs, reforming these mortgage behemoths would become nearly impossible,” said Corker.

Improving loan quality is sparking a major shake-out in the due diligence sector. Can jumbo production and MBS save the day? Meanwhile, the supply of MBS expanded slightly in the fourth quarter.

Although it expects to report “significant net income” for both the final three months and the full year 2012, Fannie Mae announced late this week that it will delay its earnings release while the GSE’s accountants continue to crunch numbers to determine if the company should take a lucrative but complex tax deduction. In a form 12b-25 filing with the Securities and Exchange Commission, Fannie requested a filing extension beyond its March 18 deadline because it needs more time to analyze its deferred tax assets, which are unused credits and deductions that can be used to cover future tax bills.“The release of the valuation allowance would have a material impact on the company’s 2012 financial statements and result in a significant dividend payment to the U.S. Treasury,” noted Fannie in its SEC filing.

Fannie Mae and Freddie Mac could suffer losses of nearly $2 billion on the fair value of their assets if interest rates fluctuate upward by just a single percentage percent, according to the Federal Housing Finance Agency’s official watchdog. A white paper issued this week by the FHFA’s Office of Inspector General found that despite moves by the Finance Agency and the Treasury to require the two government-sponsored enterprises to substantially downsize their mortgage asset portfolios, interest rate risk remains a “significant concern.” “The increasingly illiquid nature of the GSEs’ mortgage asset portfolios presents...

The available supply of residential MBS grew marginally during the fourth quarter of last year as the agency market grew enough to offset the ongoing decline in outstanding non-agency MBS, according to a new analysis by Inside MBS & ABS. The supply of single-family agency MBS increased by $48.1 billion during the fourth quarter, a 0.9 percent increase over the three-month period. The Federal Reserve gobbled up all the increase and then some; its total agency MBS holdings rose by $91.6 billion during the fourth quarter, an 11.0 percent increase from the previous period. Mutual funds appeared to hold...[Includes two data charts]

Early on, one of the biggest problems with the Home Affordable Refinance Program was the inability of nonbank lenders to participate in the effort. Many were willing – but their warehouse lenders were nervous about putting high loan-to-value loans on their books, even for just a few weeks. But since last summer Fannie Mae, and to a lesser extent Freddie Mac, have made a concerted effort to allay the fears of warehouse financiers about the risk inherent in the loans. “Fannie Mae has basically been...[Includes one data chart]

Not only was the jumbo market on a roll last year but the GSEs were major players, according to new figures compiled by Inside Mortgage Finance.

Will the White House soon unveil its FHFA director candidate?

Is privately held nonbank Mortgage Master the Big Kahuna of residential lending in Massachusetts?

When residential originations thrive, so does the warehouse lending sector, and 2012 was no exception.