Freddie Mac is reportedly crafting its own plan with institutional mortgage-bond investors to sell off hundreds of distressed homes owned by the government-sponsored enterprise, independent of a current government proposal to unload GSE real estate owned properties. According to Reuters, Freddie’s plan would allow investors to individually choose the properties they want to purchase rather than sell the homes in discounted bulk packages, like the plan that’s spearheaded by the Federal Housing Finance Agency. However, just as with the government’s plan, Freddie would secure a special line of...

Some 42 months into the government conservatorship of Fannie Mae and Freddie Mac “with no end in sight,” the GSEs’ regulator has planned out the two companies’ next steps but it says Congress needs to have the last word as to the final fate of Fannie and Freddie. Federal Housing Finance Agency Acting Director Edward DeMarco this week dispatched his “strategic plan” to House and Senate leaders in which the Finance Agency outlines the next phase of conservatorship for the GSEs while issuing a call to action to lawmakers.

Bank of America late this week announced it would stop selling new mortgages to Fannie Mae in the wake of an ongoing dispute with the GSE over repurchases.In its quarterly filing with the Securities and Exchange Commission, BofA said starting this month, it will no longer place non-Making Home Affordable program refinance first-lien mortgage products into Fannie mortgage-backed securities.BofA cited both the GSEs’ “increasingly inconsistent” repurchase requests compared to Fannie and Freddie Mac’s past conduct and the bank’s interpretation of its own contractual obligations, which BofA said has resulted in an increase in claims outstanding from the GSEs.

The Federal Housing Finance Agency needs to do more to oversee the legal expenses of Fannie Mae and Freddie Mac, though it has limited tools at its disposal to curtail GSE litigation, according to the FHFA’s Office of Inspector General. The OIG’s report, issued this week, noted that the two GSEs have racked up a significant number of billable hours, both before and after being placed in government conservatorship in September 2008, for their defense in lawsuits, investigations and administrative actions.

The housing GSEs continued to reduce their footprint in global debt markets during the fourth quarter of 2011, with new issuance and debt outstanding down from the previous year. Fannie Mae, Freddie Mac and the Federal Home Loan Banks issued a total of $2.51 trillion in debt last year, down 27.2 percent from 2010 levels, according to a new Inside The GSEs analysis of enterprise data. Issuance fell 26.7 percent from the third to fourth quarter, dropping to just $584.2 billion.

Fannie Mae’s general counsel is in the running to replace the company’s outgoing CEO, Inside The GSEs has learned, but a promotion is by no means assured as the GSE is casting a wide net in search of a suitable replacement. A source familiar with the inner workings of the company confirmed a published report that Timothy Mayopoulos, Fannie’s chief administrative officer and general counsel, has the inside track among those candidates within the company seeking the job.

A new Inside Mortgage Trends analysis of heretofore undisclosed data about Fannie Mae and Freddie Mac buyback demands reveals that individual lenders have faced varying levels of exposure and success in beating back these requests. The government-sponsored enterprises joined other financial asset securitizers in making historic new disclosures regarding the repurchase demands they have made over the years based on a loan originator’s breach of representations and warranties. Rules for the new disclosures, an outcome of the Dodd-Frank Act, were developed by the...(Includes one data chart)

The massive legal action initiated by the Federal Housing Finance Agency last year on behalf of Fannie Mae and Freddie Mac against many of the nation’s biggest lenders is getting ready to face its first legal challenge, and the federal judge’s ruling will determine the scope and direction of the cases, experts say. The FHFA lawsuits seek tens of billions of dollars in damages for losses incurred by Fannie and Freddie on purchases of approximately $200 billion in residential mortgage-backed securities.

A bill proposed by a ranking Senate Democrat would permit underwater borrowers, including those with Fannie Mae- and Freddie Mac-backed loans, to reduce their loan principal through a federal shared mortgage-appreciation program. The Preserving American Homeownership Act, S. 2093, would establish a program through which the banks would write down the principal balance of a mortgage to 95 percent of the re-assessed value of the home.

A bill filed in the Senate earlier this month would authorize Fannie Mae and Freddie Mac, as well as Federal Deposit Insurance Corp. member banks, to enter into long-term leases to permit families to stay in their homes while also easing the pressure of unsold foreclosure inventory on the housing market. The Home Act, S. 2080, sponsored by Sen. Dean Heller, R-NV, would afford banks and the GSEs the option of leasing their real estate-owned (REO) properties for up to five years, with the additional prospect of selling the house to the renter once the rental lease runs out.