Despite the full implementation of the recently expanded Home Affordable Refinance Program in June and a refi boost that followed, Fannie Mae’s and Freddie Mac’s new volume declined during the second quarter of 2012, according to a new Inside The GSEs analysis. Fannie and Freddie issued $273.95 billion in single-family mortgage backed securities during the second quarter, a 10.2 percent drop from the first three months of the year. Thanks to the huge $305.21 billion of GSE business during the first quarter, the market was still 39.3 percent ahead of the pace set during the first half of 2011.

In response to the Federal Housing Finance Agency’s request for comments on its recent strate-gic plan, the American Securitization Forum put out a white paper this week spelling out the mechanics and potential benefits of a blueprint to transition to a single agency security that could be issued by Fannie Mae and Freddie Mac. “Implemented correctly, a single agency security could benefit all participants in the mortgage market, including borrowers, originators, investors and the taxpayer,” said ASF Executive Director Tom Deutsch. Current trading markets for Fannie MBS and Freddie PCs are...

The Federal Housing Finance Agency should seriously reassess its regulations which permit the 12 Federal Home Loan Banks to build large unsecured, credit portfolios “that may produce unreasonable risk,” according to an audit by the agency’s official watchdog. The FHFA’s Office of Inspector General report issued last week noted that the FHLBanks substantially increased their unsecured lending to foreign financial institutions, particularly in Europe, during 2010 and 2011. Unsecured credit extensions to European institutions swelled from $66 billion at the end of 2008 to more than $120 billion by early 2011

The Department of Housing and Urban Development said it has received $1.2 billion in recent settlements with large mortgage lenders and servicers but HUD’s internal watchdog, which did much of the legwork in the investigations, reveals a much smaller amount. According to recent audit reports published by HUD’s Office of the Inspector General, only Bank of America and Flagstar Bank have made payments under settlement agreements with HUD and the Department of Justice to resolve government claims. In separate memos to HUD’s Office of General Counsel last month, Kim Randall, director of the HUD OIG Civil Fraud Division, sought clearance to ...

Despite a late surge in refinance business for seriously underwater home mortgages, new business volume at Fannie Mae and Freddie Mac declined by 10.2 percent during the second quarter, according to a new Inside Mortgage Finance analysis and ranking. The two government-sponsored enterprises securitized a total of $273.95 billion of conventional single-family mortgages during the second quarter. Thanks to the huge $305.21 billion of GSE business recorded during the first three months of 2012, the market was still 39.3 percent ahead of the pace set during the first half of last year. Refinance activity...

In an unusual move, the federal judge overseeing the Federal Housing Finance Agency’s massive legal action against many of the nation’s biggest MBS issuers has granted a defendant the right to appeal her denial of its motion to dismiss. Last week, Judge Denise Cote of the U.S. District Court for the Southern District of New York granted permission to UBS Americas to go over her head to the U.S. Court of Appeals for the Second Circuit. UBS hopes the appellate court will reverse...

The gap between the performance and liquidity of Fannie Mae and Freddie Mac MBS continues to widen and a proposal to make their securities interchangeable is gaining traction among stakeholders. But unless a workable valuation solution is found, bridging that gap between the two government-sponsored enterprises will remain nearly impossible, said the Mortgage Bankers Association. Pricing differences between Fannie and Freddie have grown...

Despite warning lawmakers to avoid looking at Fannie Mae’s and Freddie Mac’s guarantee fees as a (mostly) untapped revenue stream to pay for pet projects, mortgage industry officials say they remain on high alert to repel raids from a cash-hungry Congress. G-fees on Fannie and Freddie single-family mortgage-backed securities have been edging higher over the past year and in April took a 10 basis point leap higher. While there is debate within the industry whether to hike or to hold g-fees as a way to further a post-crisis recovery, all agree that the funds the GSEs charge lenders must stay with Fannie and Freddie.

Despite indications of heightened risk that the Federal Housing Finance Agency initially missed, the Federal Home Loan Banks substantially increased their unsecured lending to foreign financial institutions in 2010 and 2011, particularly in Europe, according to a report issued this week by the FHFA’s official watchdog. The FHFA’s Office of Inspector General noted that unsecured lending by the FHLBanks swelled from $66 billion at the end of 2008 to more than $120 billion by early 2011, but declined sharply by year-end 2011, as the European sovereign debt crisis continued to worsen.

The Federal Housing Finance Agency should “expeditiously finalize” its long-awaited analysis as to whether Fannie Mae and Freddie Mac will be allowed to offer principal forgiveness modifications under the Treasury Department’s Home Affordable Modification Program, according to the Government Accountability Office. In a report issued late this week, the GAO reminded the FHFA that the Obama administration’s loan modification program, which would be used to implement any principal reductions, expires at the end of December 2013.