A conflict-of-interest provision in the $25 billion robo-signing settlement approved by the court last week could make it harder for independent settlement monitor Joseph Smith to organize an oversight monitoring team within the agreement’s timeline. Smith, North Carolina’s former commissioner of banks, may have to issue or seek clarifying guidelines that would allow him to recruit attorneys and other professionals for his monitoring team and begin a phased implementation of the settlement’s servicing standards and mandatory relief requirements, according to an industry attorney. Last week...

Federally regulated banking institutions may now hang the “for rent” sign on houses in their portfolio of residential “other real estate owned” properties as an alternative to selling difficult to move OREOs, according to new guidance released by the Federal Reserve. Last week, the Fed issued a policy statement reiterating that federal statutes and its own regulations permit the rental of residential properties acquired in foreclosure as part of an orderly disposition strategy. “The general policy of the Federal Reserve is that banking organizations should make good faith efforts to dispose of...

Although Bank of America famously shut down its huge correspondent program last year, joining a trend already under way, only two thirds of home mortgages originated in 2011 were manufactured through “direct” channels by retail programs and mortgage brokers. Wells Fargo topped the ranking of direct mortgage originators with $209.8 billion in volume in 2011. That represented 15.5 percent of the industry’s total mortgage originations, significantly lower than the company’s 26.8 percent market share when correspondent production is included. Bank of America’s direct originations...(Includes two data charts)

New MBS and ABS issuance was up sharply in the first quarter of 2012, building on the momentum of a strong finish last year and heavy mortgage refinance activity. According to a new Inside MBS & ABS analysis, a total of $430.0 billion of residential MBS and non-mortgage ABS were issued during the first quarter, up 17.8 percent from the final three months of 2011 and 13.4 percent higher than in first quarter of last year. It was the market’s highest three-month volume since the fourth quarter of 2010, another period of heavy mortgage refinance volume. Residential...(Includes two data charts)

Fannie Mae and Freddie Mac could end up on the hook for millions of dollars in unpaid property taxes as well as the targets of numerous legal complaints following a Michigan federal judge’s ruling that could force the GSEs to open their coffers to a plethora of revenue-starved local governments. Two weeks ago, U.S. District Court Judge Victoria Roberts granted Oakland County, MI, summary judgment in its lawsuit against Fannie and Freddie because the two GSEs failed to pay the transfer tax on deeds recorded by the state Register of Deeds Office, as required by Michigan law.

The Federal Housing Finance Agency is in the midst of a full and frank appraisal of the Treasury Department’s recently proposed incentive program to spur GSE principal reductions through the Home Affordable Modification Program, with a final answer to be forthcoming later this month, according to the agency head. For months now, FHFA Acting Director Edward DeMarco has been the target of unrelenting political pressure from the Obama administration and Congressional Democrats to allow Fannie Mae and Freddie Mac to employ mortgage principal reductions as a tool to modify underwater GSE loans.

Fannie Mae and Freddie Mac mortgage-backed securities remained the preferred investment choice of the Federal Home Loan Banks during the fourth quarter of 2011, with a minor decline posted from the previous quarter, according to a new analysis by Inside The GSEs based on data from the Federal Housing Finance Agency. Ginnie Mae securities likewise posted a decline within the 12 FHLBank system during the three-month period ending Dec. 31, 2011. GSE MBS accounted for 69.6 percent of combined FHLBank MBS portfolios, down 2.1 percent from the third quarter of 2011. The Finance Agency’s data do not separately break out Fannie and Freddie volume or share.

President Obama this week signed into law a measure that, among other things, kills big bonus payments to Fannie Mae and Freddie Mac executives for as long as the GSEs are subsidized by taxpayers. After nearly two months and some legislative positioning, Congress passed the Stop Trading on Congressional Knowledge Act of 2012. Primarily, the STOCK Act bars House and Senate members and their staff from using non-public, inside information for personal benefit.However, an amendment to the bill which was passed on an overwhelmingly bipartisan margin in both houses of Congress prohibits the payment of bonuses over and above a GSE executive’s salary compensation while Fannie and Freddie remain in government conservatorship.

The inherent tensions between the Federal Housing Finance Agency’s dual role as both conservator and regulator of Fannie Mae and Freddie Mac pose “significant challenges” that may put the Finance Agency at cross purposes with its two missions, according to the FHFA’s official watchdog. A white paper issued by the FHFA’s Office of Inspector General last week offering its current assessment of the agency’s conservatorship of the GSEs cited the Finance Agency’s two main challenges as: attempting to advance the enterprises’ business interests while assisting distressed homeowners; and simultaneously serving as both conservator and regulator.

Senate Democrats would like to see the Federal Housing Finance Agency loosen even further the refinancing restrictions on GSE mortgages and they’ve got a couple of pointers on how to make it so. Last week, Democrats on the Senate Banking, Housing and Urban Affairs Committee, led by Chairman Tim Johnson, SD, wrote FHFA Acting Director Edward DeMarco to encourage the Finance Agency to take the Home Affordable Refinance Program beyond HARP 2.0.