It’s far too early for lawmakers to entertain another expansion of the Home Affordable Refinance Program given that the most recent tweak to the program, HARP 2.0, only just recently became fully active, according to the Federal Housing Finance Agency. The FHFA has maintained that HARP 2.0 remains a work in progress given the revamped program’s graduated rollout of changes, but this week the Finance Agency said a proposed bill in the Senate to create HARP 3.0 would only get in the way. “The initial results on the enhanced HARP program show that it is working, and new legislation at this time would slow down that progress,” said FHFA Senior Associate Director for Housing and Regulatory Policy Meg Burns.

The watchdog agency charged with overseeing the regulator of Fannie Mae, Freddie Mac and the Federal Home Loan Banks said it has conducted numerous audits and evaluations of the Federal Housing Finance Agency over the past half-year with more to come in the pipeline. In its semi-annual report to Congress, the FHFA’s Office of Inspector General reiterated its actions during the six-month period ending March 31, including issuing eight audit, evaluation survey and white paper reports, as well as reviewing and commenting on proposed FHFA rules. In keeping with its mandate since it was activated in October 2010, FHFA-OIG said it is “following an ongoing strategy of identifying vulnerabilities and risk areas” in the FHFA and the government-sponsored enterprises.

Eight members of California’s congressional delegation, both Republicans and Democrats, have filed a bill to preclude Golden State foreclosed homes owned by Fannie Mae from being sold to large investors under a fledgling pilot program championed by the GSE’s regulator. Filed last week by Republican Rep. Gary Miller, H.R. 5823, the Saving Taxpayers from Unnecessary GSE Bulk Sale Programs Act of 2012, would prohibit the Federal Housing Finance Agency from implementing its initiative to sell Fannie’s real estate-owned properties to California institutional investors. The bill has the strong backing of both the California Association of Realtors and its Washington, DC-based affiliate, the National Association of Realtors.

Fannie Mae and Freddie Mac mortgage-backed securities remained the preferred investment choice of the 12 Federal Home Loan Banks during the first 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 a decline within the FHLBank system during the first three months of the year. GSE MBS accounted for 70.7 percent of combined FHLBank MBS portfolios, up 2.3 percent from the fourth quarter of 2011. The Finance Agency’s data do not separately break out Fannie and Freddie volume or share.

The Government Accountability Office has cited “opportunities for improvement” in the Federal Housing Finance Agency’s internal controls in a recent report, including a still pending recommendation to beef up the FHFA’s information security controls. Mandated by the Housing and Economic Recovery Act of 2008, the GAO said its audit of the Finance Agency’s fiscal years 2011 and 2010 revealed that the FHFA had not fully implemented its information security program as per GAO’s recommendations in previous reports, resulting in “several new information systems vulnerabilities” over the last year.

A bill filed in the Senate two weeks ago would require mortgage servicers to respond to a short-sale offer within 30 days and make a final decision on acceptance within 60 days of receiving a purchase offer. The Stopping Ongoing Lender Delays (SOLD) Act, S. 3177, sponsored by Sen. Dean Heller, R-NV, would amend the Truth in Lending Act to require servicers to provide prompt responses to homeowners seeking to refinance or “for other purposes” including short sales. “By placing a shot clock on these decisions, it will reduce the amount of time it takes to sell a property, improve the likelihood that the transaction will close, and reduce the number of foreclosures in Nevada and across the country,” Heller said in a Senate floor speech on May 15. “Stability in the housing market is critical for long-term growth.”

Although at least one Senate Republican shows interest in a plan to expand the Home Affordable Refinance Program, the outlook for Congressional action remains doubtful and House Democrats are pushing the Federal Housing Finance Agency to make further HARP changes administratively. During a Senate Banking, Housing and Urban Affairs Committee hearing last week on legislation to expand HARP, Sen. Bob Corker, R-TN, said he was open to the proposal. “I hope that we’ll have a real mark-up on this bill,” he said. Senate Democrats Robert Menendez (NJ) and Barbara Boxer (CA) have introduced legislation...

Guarantee fees on Fannie Mae and Freddie Mac single-family mortgage-backed securities have been edging higher over the past year and in April took a 10 basis point leap higher, but the timetable for future increases is unclear. In April, the government-sponsored enterprises implemented a 10 bp increase in guarantee fees that was mandated by Congress as a way to pay for an extension of a cut in payroll taxes. All of the added revenue from the fee hike, which will remain in effect for 10 years, will go to the U.S. Treasury and not cover Fannie and Freddie credit losses or count toward the GSEs’ obligations...

In a move intended to maintain the integrity of data that helps guide the decisions of MBS investors, the Financial Industry Regulatory Authority last week fined Citigroup Global Markets $3.5 million for allegedly providing “inaccurate mortgage performance information, supervisory failures and other violations” in connection with subprime residential MBS. “Citigroup posted data for its RMBS deals that it should have known was inaccurate; and even after they learned that the data was inaccurate, Citigroup did not correct the problem until years later,” said Brad Bennett, FINRA executive vice president and...