The Federal Housing Finance Agency has announced its roadmap for managing its conservatorship of Fannie Mae and Freddie Mac as it moves toward its ultimate end of reducing GSE market share and building a new secondary mortgage market infrastructure. Two weeks ago, the FHFA rolled out its 2012 “conservatorship scorecard,” which provides more details about the Finance Agency’s revamped strategic plan that was announced last month.

Fannie Mae, Freddie Mac and the Federal Home Loan Banks will now be prohibited from taking on mortgages “encumbered by certain types of transfer fee covenants and in certain related securities” under a final rule issued last week by the Federal Housing Finance Agency. The FHFA’s final rule, published in the March 16 Federal Register, generally applies, with some exceptions, to private transfer fee covenants created on or after Feb. 8, 2011, the publication date of the Finance Agency’s proposed rule.

Effective Sept. 1, Freddie Mac will assess a Reporting Noncompliance Compensatory Fee of up to $15,000 on servicers that fail to report on at least 75 percent of the loans they service by the fifth business day after the accounting cycle cutoff, the GSE noted in an alert to servicers last week. Freddie has upped the fine it will levy from $250 to $5,000 against any servicer that falls short of the GSE’s reporting rules. A second violation in one 12-month period will result in a $10,000 fine, previously $550.

A conservative, non-partisan public interest group has filed suit against the Federal Housing Finance Agency, claiming the FHFA has improperly denied the group’s request for documents relating to the Finance Agency’s decision to sue 17 financial institutions last fall on behalf of Fannie Mae and Freddie Mac over alleged misrepresentations of mortgage-backed securities.Last week, Judicial Watch filed its lawsuit in the U.S. District Court for the District of Columbia after the FHFA denied the group’s Freedom of Information Act request for documents related to the agency’s litigation. The Finance Agency argued that as private companies, FOIA requests do not apply to Fannie and Freddie.

Mortgage lenders, private mortgage insurers and the government-sponsored enterprises remained at loggerheads on the nagging problem of loan buybacks and MI cancellations as 2011 came to a close. Despite several “global” settlements by the GSEs and halting progress on legal wrangling over representation and warranty claims related to non-agency mortgage-backed securities, a new Inside Mortgage Trends analysis reveals there were more unresolved buyback demands at the end of 2011 than there were at the beginning of the year. A clear sign of the persistent seriousness of...(Includes two data charts)

The recent Servicing Resolution Agreements signed by the nation’s top five mortgage servicers with the federal government and state attorneys general may have been clear on the cost of their key provisions but it is the enormous hidden costs of compliance that could bite the financial institutions in the long run, according to compliance experts. Following the recent announcement of the national servicing settlement, it is impossible to put an accurate dollar amount on the myriad things servicers need to do in order to comply, but experts agree that staffing, training, technological upgrades...

Buried in the fine print of the $25 billion nationwide servicing settlement is a small incentive for the five banks if they agree to waive their right to seek deficiency judgments against distressed borrowers. The five servicers agreed to make some $17 billion in loan modifications and refinances, but they meet those obligations by racking up “credits” for a long list of actions. For every dollar of principal reduction made on a portfolio mortgage with a loan-to-value ratio under 175 percent, for example, they get a dollar of credit toward their obligation. The agreement gives them credit for...

Home-equity lending in 2011 fell to its lowest level in more than 20 years as crumbling house prices and rigid underwriting continued to hammer away at second mortgage lending. Banks, savings institutions and credit unions reported a total of $803.6 billion of home-equity loans in their portfolios at the end of the year, down 7.2 percent from the previous December. Depository institutions accounted for the lion’s share, 92.1 percent, of the $873.0 billion home-equity market. Finance companies were the only other significant player in the market, with $49.0 billion at the...(Includes two data charts)

A Senate subcommittee chairman has called upon the Federal Housing Finance Agency to recalculate and resubmit its principal reduction analysis to account for the Obama administration’s proposed enhanced incentives after an expert testified last week about a number of flaws in the study the FHFA used to justify its policy stance against writedowns of Fannie Mae and Freddie Mac loans. Sen. Robert Menendez, D-NJ, called for the FHFA do-over during a hearing of the Senate Banking Subcommittee on Housing Transportation and Community Development, where Amherst Securities’ Laurie Goodman said there...

The feds aren’t done cracking down on mortgage servicers and before the smoke clears, more than a half dozen companies are going to be facing fines that have been pending since federal regulators announced their servicing consent decrees last April, an official from the Federal Reserve told members of Congress this week. Last month, the Fed announced it had assessed monetary sanctions totaling $766.5 million against Ally Financial, Bank of America, Citigroup, JPMorgan Chase and Wells Fargo for failing to appropriately oversee their subsidiaries’ mortgage loan servicing and foreclosure processing...