Investors are still a major hurdle for industry efforts to put Fannie Mae and Freddie Mac MBS on a more level playing field, while Ginnie Mae is beginning to weigh its options to address a major shift in the profile of its MBS business. Freddie’s share of new MBS production by the two government-sponsored enterprises has dropped significantly over the past few years. The company typically accounted for 42 percent to 45 percent of GSE issuance up until 2008, when it fell to 39.8 percent. Last year, Freddie captured just 35.4 percent of the GSE market, and in the first nine months of 2012 it’s down to 34.2 percent. Steven Abrahams, a managing director at Deutsche Bank, said...

Recent efforts by the government-sponsored enterprises and the Federal Housing Finance Agency to offer clarity and consistency about repurchase demands may or may not bear fruit as neither agency officials nor industry observers can speak confidently as to its ultimate effectiveness. According to participants at an Inside Mortgage Finance webinar this week, the GSE representation and warranty framework unveiled by the FHFA last month and the GSEs’ new quality control guidelines announced last week are steps in the right direction but there are a lot of moving parts to take into account. “We tried the best we could to address...

The U.S. Attorney for the Southern District of New York opened a new battlefront in intense warfare over losses taken by investors and others in the collapse of the housing market. The government this week filed charges against Bank of America, as the party left liable for activities at Countrywide Home Loans, based on the False Claims Act, a federal law that provides for hefty treble damages and penalties. The FCA has been used in recent mortgage-related charges involving FHA loans, but the new filing attempts to expand the law to loans sold to Fannie Mae and Freddie Mac. In its filing, the government contends...

The Federal Housing Finance Agency’s internal watchdog said Fannie Mae and Freddie Mac could mitigate more losses if they recover mortgage deficiencies from borrowers more efficiently. An FHFA Office of Inspector General report found weaknesses in the ability of the government-sponsored enterprises to collect shortfalls from borrowers from post-foreclosure sales. In 2011, the GSEs recovered only a small fraction of the deficiencies they pursued, an estimated $4.7 million collected out of $2.1 billion pursued, the IG reported. The IG blames this on the FHFA’s lack of guidance and oversight of the GSEs’ deficiency recovery efforts. While the FHFA has an opportunity to provide...

Fannie Mae, Freddie Mac and Ginnie Mae officials pledged to continue efforts to build a better secondary market system while coping with the business challenges of dealing with an increasingly diverse universe of lenders delivering loans directly to the agencies. “Fannie Mae is a different company today,” said Timothy Mayopoulos, president and CEO of the firm, during a panel session at this week’s annual convention of the Mortgage Bankers Association. He said 80 percent of the government-sponsored enterprise’s upper management has been promoted to their roles or hired since the GSE went into conservatorship four years ago. Half of the company’s 7,000 employees have been hired since then. “The people of Fannie Mae today are...

Regulatory uncertainty continues to frustrate mortgage bankers who can see the outlines of major pending changes in consumer protection, securitization rules and capital requirements that remain largely enshrouded in bureaucratic fog. “We have these new concepts, qualified mortgages and qualified residential mortgages, but we don’t know what their exact definitions are,” said Michael Heid, president of Wells Fargo Home Mortgage, during a panel session at this week’s annual convention of the Mortgage Bankers Association in Chicago. “We are in a gray state; the concepts are there, but the rules aren’t. At the same time we’re having to clean up issues from the past.” Debra Still, president and CEO of Pulte Mortgage, said...

The Federal Housing Finance Agency’s five-year strategic plan aims to develop a “new system” for recording mortgages electronically and assuming custodianship of mortgage documents but is curiously silent about the role the Mortgage Electronic Registration System would play in a future revamped secondary mortgage market. The new system is among many initiatives and strategies outlined in the FHFA’s recently issued updated strategic plan for 2013-2017. The plan builds on an earlier plan for the conservatorships of the government-sponsored enterprises released in February. As part of building a new infrastructure to replace the GSE model, the FHFA said...

A federal appeals court has refused to suspend proceedings in the case brought by the Federal Housing Finance Agency against one of the non-agency mortgage-backed securities issuers and underwriters for allegedly misrepresenting the deals that were sold to Fannie Mae and Freddie Mac. A three-judge panel of the Second Circuit Court of Appeals earlier this month made short work of rejecting the motion by UBS Americas to put the suit on hold while the appeals court hears UBS’ appeal of a lower court’s decision not to dismiss the case. “Upon due consideration, it is hereby ordered the motion is denied,” the judges ruled in their terse one-sentence Oct. 1 order.

Fannie Mae and Freddie Mac have released new guidelines designed to bring more of the two GSEs’ servicing requirements into alignment. The updated policies, both issued Oct. 3, focus on aligning contracts and the enforcement of remedies with seller/servicers in compliance with a Federal Housing Finance Agency directive. “The requirements announced in this bulletin build on the success [of previous announcements], and through our work with Fannie Mae, provide servicers with greater clarity, consistency and transparency across the enterprises on how servicer performance will be measured,” explained Freddie in its announcement.

The Federal Housing Finance Agency is looking for feedback on a proposed advisory bulletin which would set forth standards to guide FHFA staff in its supervision of secured lending to insurance company members of the 12 Federal Home Loan Banks.The Finance Agency’s advisory bulletin on insurance company collateral, published in the Oct. 5 Federal Register, noted that lending to insurance company members over the last several years has come to represent “an increasingly larger portion” of FHLBanks’ overall business, with several Banks actively targeting this member segment.