Mortgage market observers say they are seeing a gradually building struggle by the Federal Housing Finance Agency to maintain its precarious balance between the FHFA’s congressionally-mandated roles as conservator to the GSEs and – indirectly – regulator of 65 percent of the mortgage market. Industry interests, meanwhile, continue to call for greater “transparency” surrounding Fannie Mae- and Freddie Mac-related decision making. Under the Housing and Economic Recovery Act of 2008, the FHFA was created to succeed the Office of Federal Housing Enterprise Oversight as regulator to Fannie and Freddie as well as the 12 Federal Home Loan Banks.

Fannie Mae is working on building an in-house unit to value mortgage servicing rights, according to industry officials who’ve been briefed on the GSE’s plans. However, it’s unclear at this point how far along Fannie is. A spokesman for the company declined to comment to Inside The GSEs about the matter. Officials familiar with the effort, including one former GSE executive, said Fannie is looking to value MSRs for two main reasons: to better judge counter-party risk on mortgage bankers that sell residential loans to the company, and perhaps to better value the asset because it may have plans to buy or finance servicing rights in the future.

An FHA lender need not cancel a scheduled foreclosure sale to reassess a borrower if the property is non-owner occupied, vacant or an investment property, according to newly issued agency guidance. Under such circumstances, the lender does not have to cancel a foreclosure sale date because loss mitigation retention options are only available to owner-occupants, the FHA explained in a frequently-asked-questions guidance on the revised requirements for loss mitigation retention options. The FHA announced the changes last month in an effort to ...

Despite the renewed focus on the FHA in the wake of the recent actuarial report, analysts do not expect any meaningful action in 2013 given the important role that FHA plays in supporting the housing market. But that does not mean that the Department of Housing and Urban Development will be sitting idly by next year. It has a lot of additional measures to implement to protect and preserve the FHA Mutual Mortgage Insurance Fund, HUD Secretary Shaun Donovan told Senate lawmakers recently during a hearing on the condition of the fund. The changes are both ...

The FHA and VA have announced loan limit adjustments in many counties even as disparities with conventional loan limits persist in 2013, according to a new analysis by Inside FHA Lending. FHA loan limits for forward mortgages will increase in 2013 for 19 counties, 10 of which are part of the Houston metropolitan area. In those counties, the one-unit limit is going up just $1,500 to $272,550. The remaining counties are in Alaska. Congress authorized the “emergency” loan limits for high-costs markets – still $729,750 for FHA and $625,500 for Fannie Mae and Freddie Mac –to run through Dec. 31, 2013. The base loan limit nationwide and in ...

As the wait for the highly anticipated “qualified mortgage” final rule continues, its impact on FHA lending programs remains uncertain. Concerns have been raised over the possibility that the final QM rule the Consumer Financial Protection Bureau is finalizing may establish a “safe harbor” for prime loans with a maximum debt-to-income ratio of up to 43 percent. This could have implications for FHA loans, which allow higher back-end ratios under certain circumstances, according to some lenders and industry participants. At what point the DTI ratios will ...

Fannie Mae and Freddie Mac, under directions from the Federal Housing Finance Agency, are close to issuing risk-sharing transactions, according to market participants. The securities will be structured to allow non-agency investors to take subordinate risk on government-sponsored enterprise mortgage-backed securities and will likely help set GSE guaranty fees going forward. Martin Hughes, CEO of Redwood Trust, said his company is currently under a non-disclosure agreement regarding risk-sharing ...

The guaranty fees charged by Fannie Mae and Freddie Mac are close to hitting a tipping point where non-agency mortgage-backed security issuance will be the more economic execution for new originations, according to some non-agency participants. “If the non-agency pricing is improving and the GSE pricing is worsening, at some point you’re going to hit a tipping point,” Luke Scolastico, a vice president at Credit Suisse, said last week at a panel discussion hosted by the American Securitization Forum ...

A recession resulting from the federal government taking the U.S. economy over the fiscal cliff would leave Fannie Mae and Freddie Mac vulnerable to higher credit losses and make the two government-sponsored enterprises unprofitable again, according to Moody’s Investors Service. Moody’s this week warned that Washington’s failure to reach a tax and spending agreement would also force the GSEs to ride out the shockwaves of potential financial market disruptions on their derivatives trades. “In our current central economic scenario, both Fannie Mae and Freddie Mac are...

MBS analysts hold differing expectations as to what the potential replacement of the “temporary” head of the Federal Housing Finance Agency could mean to Fannie Mae, Freddie Mac and the mortgage securities sector. Recently reported Obama administration backchannel chatter suggests that the White House is actively seeking potential candidates to replace FHFA Acting Director Edward DeMarco, who has been the de facto agency chief since the departure of James Lockhart in September 2009. A report last week by Credit Suisse speculated...