Fannie Mae and Freddie Mac late this year will raise guaranty fees on single-family mortgages by another 10 basis points, under a directive that the government-sponsored enterprises’ conservator announced late last week. The g-fee increases will be effective on Dec. 1, 2012, for loans exchanged for mortgage-backed securities, and on Nov. 1, 2012, for loans sold for cash. According to FHFA Acting Director Edward DeMarco, who telegraphed the move in a notification to Congress earlier this summer, the g-fee increases are designed...

Despite increased activity in the Fannie Mae and Freddie Mac refinance programs for underwater borrowers during the second quarter of 2012, total refi originations declined by 4.8 percent from the first three months of the year, according to a new Inside Mortgage Finance analysis and ranking. Refinance activity still accounted for 68.1 percent of originations during the most recent quarter, but that was down from 75.3 percent in the first three months of the year. Partly offsetting the drop in refi business was a 35.8 percent increase in purchase-mortgage originations, which rose to an estimated $129.0 billion in the second quarter. But compared to the first half of 2011, purchase-mortgage lending was down 1.3 percent as of the midway point this year. Refinance originations appear to be climbing in the third quarter. Data on Fannie and Freddie securitization activity in July and August suggest that total refi business at the government-sponsored enterprises is...[Includes four data charts]

The streamlined short sale programs announced last week by Fannie Mae and Freddie Mac could increase losses on bank holdings of second liens, according to industry analysts. The changes, directed by the Federal Housing Finance Agency, include the ability for the government-sponsored enterprises to offer up to $6,000 to second-lien holders to expedite a short sale. “Previously, second-lien holders could slow down the short sale process by negotiating for higher amounts,” the FHFA said. Overall ...

The Treasury Department’s recent announcement on the next steps to “wind down” the government-sponsored enterprises will have little immediate impact on the non-agency market, according to industry analysts. The Treasury will require Fannie Mae and Freddie Mac to contribute all future profits to the government, reduce their investment portfolios at a quicker pace and submit annual plans to reduce mortgage credit risk. “[The changes] will help expedite the wind down of Fannie ... [Includes one chart]

The reverse mortgage lending industry urged state regulators to update the existing reverse mortgage examination guidelines (RMEG) to conform to regulatory changes that have occurred in the market in the last three years. The National Reverse Mortgage Lenders Association (NRMLA) submitted proposed changes to the Conference of State Bank Supervisors regarding term definitions, examiner checklist, product descriptions, comparison worksheet, mandatory housing counseling, as well as other sections. The CSBS jointly published the ...

Fannie Mae and Freddie Mac mortgage-backed securities remained the preferred investment choice of the 12 Federal Home Loan Banks during the second quarter of 2012, with a modest increase from the previous quarter, according to a new analysis and ranking by Inside The GSEs based on data from the Federal Housing Finance Agency. Meanwhile, Ginnie Mae securities posted an ever-so-slight decline within the FHLBank system during the period ending June 30, 2012. GSE MBS accounted for 72.0 percent of combined FHLBank MBS portfolios, up 2.7 percent from the first quarter. The Finance Agency’s data do not separately break out Fannie and Freddie volume or share.

A New York federal judge has denied a motion by former Fannie Mae top executives to dismiss a civil action brought against them by the Securities and Exchange Commission concerning the company’s misrepresentations about its exposure to subprime and Alt A mortgages in the two years leading up to the GSE’s government takeover. On Aug. 10, U.S. District Court Judge Paul Crotty rejected the motion brought by former Fannie CEO Daniel Mudd, former Chief Risk Officer Enrico Dallavecchia and former EVP for Single Family Thomas Lund. The defendant trio argued that investors had sufficient information to form their own conclusions about the viability of Fannie’s subprime and Alt A portfolio.

The Federal Housing Finance Agency violated federal law when it rolled back the Property Assessed Clean Energy program without going through the required notice and comment period, a California federal judge ruled earlier this month. U.S. District Judge Claudia Wilken’s Aug. 9 ruling held that the FHFA was not acting as conservator of Fannie Mae and Freddie Mac but as a regulator that had improperly exercised substantive regulatory oversight in violation of the Administrative Procedure Act when the agency put a stop to GSE involvement with PACE programs.“The FHFA’s directives on PACE obligations amount to substantive rule-making, not an interpretation of rules that would be exempt from the notice and comment requirement,” wrote Judge Wilken. “The notice and comment process must be followed.”

Both Fannie Mae and Freddie Mac retained their dominant shares of mortgage-backed securities with something of a slide during the second quarter of 2012, according to an Inside The GSEs analysis. The two GSEs issued a combined $273.9 billion MBS during the second quarter, a 10.2 percent decrease from the first quarter. Compared to the second quarter of last year, however, Fannie and Freddie saw an ample 76.8 percent increase in MBS issuance.

A federal appeals court has agreed to hear a rare appeal by one of the non-agency mortgage-backed securities issuers and underwriters being sued by the Federal Housing Finance Agency 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 accepted UBS Americas’ appeal to re-argue and reverse a lower court’s denial of the bank’s motion to dismiss the FHFA’s suit as time-barred under the Housing and Economic Recovery Act.The FHFA sued UBS in July 2011 on behalf of Fannie and Freddie, seeking damages and civil penalties on behalf of the government-sponsored enterprises under the Securities Act of 1933.