The revised “HARP 3.0” proposal pending in the Senate would likely have only a limited impact on boosting Fannie Mae and Freddie Mac refinance activity, according to a report released by RBS Securities last week. Senate Democrats have proposed legislation designed to expand the Home Affordable Refinance Program for underwater Fannie/Freddie borrowers, although most observers see little chance of it being enacted in the lame duck session of Congress. RBS said...

Some real estate agents are refusing to accept offers from buyers using FHA financing prompting minority rights advocates to question whether racial discrimination is causing the problem or some other factors. While illegal flipping and steering that targeted minority communities appear to have abated, bias against borrowers using FHA financing continues in the real estate market, according to Janis Bowdler, director of the Wealth-Building Policy project of the National Council of La Raza. Bowdler expressed her concern during a recent panel discussion of an FHA Working Paper on the FHA’s role in the housing finance market hosted by the Urban Institute. She said there have been reports of ...

The Department of Housing and Urban Development has announced changes to existing loss mitigation options to reduce the number of claims against the FHA Mutual Mortgage Insurance Fund.The changes will benefit qualified, distressed FHA borrowers, who will be able to qualify for FHA loss mitigation interventions and get more help than what was allowed under previous guidelines. HUD has issued a mortgagee letter to amend existing FHA Home Affordable Modification Program guidelines, the definition of “special forbearance,” and loss mitigation-priority guidelines. Specifically, HUD eliminated the ...

Refinancing of underwater and nearly submerged Fannie Mae and Freddie Mac mortgages continued to spur business at the government-sponsored enterprises during the third quarter. During the third quarter of 2012, the two GSEs securitized a total of $66.91 billion of refinance mortgages with loan-to-value ratios exceeding 85 percent, a proxy for business originated under the Home Affordable Refinance Program. That was up 13.3 percent from the second quarter, according to an Inside MBS & ABS analysis of loan-level securitization data. Official HARP data are reported...[Includes two data charts]

Recent procedural rulings in Federal Housing Finance Agency lawsuits against non-agency MBS issuers and underwriters again favored the conservator of the government-sponsored enterprises, prompting some to speculate that issuers will move to settle the lawsuits. Meanwhile, a number of other MBS-related litigation developments continue to pile up. U.S. District Judge Denise Cote is overseeing 16 cases filed by the FHFA against non-agency MBS issuers and underwriters regarding non-agency MBS purchased by the GSEs between 2005 and 2007. The FHFA alleges misrepresentations by the issuers and underwriters on the MBS. Last week, Cote dismissed...

Look for the 113th Congress and to a lesser extent a second-term Obama administration to become more engaged in seeking a resolution to Fannie Mae’s and Freddie Mac’s future role in the mortgage market, although implementation of such a solution remains years away, say industry observers. In the short term, following a hard-fought 2012 election that left the balance of power and the political party makeup unchanged, official Washington will be primarily focused on averting the looming “fiscal cliff” of tax hikes and automatic spending cuts.

Speculation abounds across Capitol Hill and within mortgage industry circles about how long the “temporary” head of the Federal Housing Finance Agency will remain at his post following the post-election shake out. However, it remains to be seen whether President Obama, flush from re-election, will seek a replacement for FHFA Acting Director Edward DeMarco, either by nominating a permanent agency director to the Senate or by the more politically problematic recess appointment.

In the wake of last week’s election, two congressional committees key to mortgage and housing issues face significant reorganization while the pending fiscal crisis will cause execution of Fannie Mae and Freddie Mac policy to remain on the backburner before lawmakers begin to reexamine GSE reform in earnest.The hard-fought electoral contest resulted in the status quo with Democrats in control of the White House and Senate, while Republicans retain their hold on the House. The House Financial Services Committee was poised for a leadership change no matter which political party prevailed with current chairman Spencer Bachus, R-AL, term-limited by House Republican Conference rules.

Fannie Mae and Freddie Mac announced last week that servicers are permitted to suspend evictions and foreclosures for borrowers affected by Hurricane Sandy for 90 days in order to assess homeowners’ situations. Immediately following the Oct. 28-29 hurricane, the GSEs had reiterated their policy on mortgage relief to borrowers located in jurisdictions declared by the president to be major disaster areas.

Fannie Mae and Freddie Mac each emerged from the third quarter of 2012 with a healthy profit, reporting a combined $4.74 billion in net income, a 41.7 percent decline from the second quarter but still well enough into the black to forgo taxpayer assistance to stay solvent. Fannie’s third quarter net income of $1.81 billion compared to a net loss of $5.1 billion in the same quarter a year ago but much more in line with the $2.72 billion it earned during the first quarter of 2012.