Heavy refinance volume pushed both Fannie Mae and Freddie Mac single-family mortgage securitization up sharply during the third quarter of 2012, well ahead of the pace the two GSEs set in 2011, according to a new Inside The GSEs analysis. Fannie and Freddie issued $335.38 billion in single-family mortgage-backed securities during the third quarter, a 22.4 percent increase from the second quarter, a rebound from the GSEs’ slump during the April-through-June period.

Freddie Mac last week cut some slack in the form of a lifeline to MGIC Investment Corp. which will allow the mortgage insurer to write additional policies even as the MI and the GSE work through a simmering dispute over pool insurance. On Sept. 28, MGIC announced that Freddie has reduced the amount of capital contribution MGIC Investment must pay its principal subsidiary MGIC to $100 million from $200 million. The GSE also extended the deadline for this contribution from Sept. 30 to Dec. 1.

The use of Federal Home Loan Bank advances rose among bank and thrift members overall during the second quarter of 2012, with one top-three member moving up a notch due to increased advance use both on a quarterly and on a year-over-year basis, according to the Inside Mortgage Finance Bank Mortgage Database. All of the nation’s banks and thrifts used a combined $325.6 billion in advances as of June 30, 2012, up 6.5 percent from the first quarter of 2012, but off 4.5 percent from the same period a year earlier. Top-ranked Citigroup increased its advance use by 55.7 percent at the end of the second quarter and up 7.0 percent from the same period last year. One year earlier, Citigroup ranked third after having moved down one position from the previous quarter.

Neither Freddie Mac nor its regulator, the Federal Housing Finance Agency, purposefully limited refinancing opportunities in order to protect the value of the GSE’s investment portfolio, concluded a report by the FHFA’s official watchdog last week. The FHFA’s Office of Inspector General said it found “no evidence” that the GSE or the Finance Agency obstructed homeowners’ abilities to refi in an effort to influence the yields of inverse floating-rate bonds.

Single-family mortgage securitization by Fannie Mae and Freddie Mac increased sharply during the third quarter of 2012, according to a new Inside Mortgage Finance ranking and analysis. New production of mortgage-backed securities by the two government-sponsored enterprises rose 22.4 percent from the second quarter, driven by a hefty 19.4 percent increase in refinance business. Refinance loans accounted for 76.9 percent of GSE securitization during the period, and the dollar volume of refi loan sales rose 19.4 percent from the second quarter. Fannie posted...[Includes three data charts]

The conservator of Fannie Mae and Freddie Mac has been lax in its oversight of business decisions made by the two government-sponsored enterprises and lacks a formal verification process to keep the two companies honest, according to a new audit by the Federal Housing Finance Agency’s official watchdog. The FHFA’s Office of Inspector General found numerous instances where the FHFA didn’t ask the companies and the two GSEs didn’t tell the agency about significant business decisions, even when such approval was required. “FHFA-OIG found that FHFA did not require...

MGIC Investment announced late last week that it won certain concessions from Freddie Mac and the two are working to resolve a dispute regarding mortgage insurance pool pricing by the end of this month. Freddie cut a required capital contribution by MGIC Investment in half and allowed a significant expansion of the number of areas in which an MGIC subsidiary can write new business. “I am pleased with the spirit of cooperation all parties have shown in moving forward to reach this point,” said Curt Culver, chairman and CEO of MGIC Investment and Mortgage Guaranty Insurance Corp. “While there can be no guaranty that the open matters that remain can be successfully resolved, I am hopeful we will continue to make progress.” In May, MGIC filed...

There is a clear need to reform the government-sponsored enterprise structure but how aggressively Congress will move on it and whether the next administration can provide much-needed leadership is unclear, according to housing and mortgage industry experts. Panelists in a forum hosted this week by the Progressive Policy Institute and the American Action Forum said they doubt Congress will be able to deal with the complex issue of GSE reform in 2013. Some among the panel of top economists and housing market experts said it may take a while before Congress can act on any reform legislation, much less in a bipartisan manner. Congress will not be...

It looks like the controversial risk-retention proposal won’t be issued by federal regulators until sometime next year, as major components of the Dodd-Frank Act remain in limbo. “I think much of the Dodd-Frank regulatory process is on hold until after the elections, and we’re unlikely to see decisions on most major issues until sometime in 2013,” said Steven Abrahams, an analyst at Deutsche Bank Securities. “The only process that seems to be rolling is the one run by the Consumer Financial Protection Bureau to define mortgage origination and servicing standards.” As he sees it, “the first half of next year will probably see...

Special servicers are set to receive more than $300.0 billion in distressed agency mortgages, according to industry analysts. The projections come after positive reviews of Fannie Mae’s controversial purchase and transfer of $73.0 billion in mortgage servicing rights from Bank of America in 2011. The Federal Housing Finance Agency and the FHFA Office of Inspector General each determined that Fannie paid a premium for BofA’s mortgage servicing rights, but significant savings will be recognized due ...