House Democrats doubled down on their ongoing feud with the head of the Federal Housing Finance Agency this week as they demand answers from the GSE regulator about a previously unknown 2010 Fannie Mae pilot program to forgive borrower’s mortgage debt that was shelved due to what Dems say was a philosophical opposition to loan writedowns.In a letter to FHFA Acting Director Edward DeMarco, Reps. Elijah Cummings, D-MD, and John Tierney, D-MA, of the House Committee on Oversight and Reform, accused the agency head of being less than forthright in his response to lawmakers justifying the FHFA’s position against the writedown of underwater GSE mortgages.“The single most significant revelation in your letter to Congress is that, even based on your own questionable assumptions and data, principal reduction programs serve the taxpayer interests even when compared to your preferred alternative of forbearance,” said Cummings and Tierney.

The Federal Housing Finance Agency has made a number of minor but important changes to its existing Freedom of Information Act regulations.On Jan. 31, the Finance Agency published in the Federal Register updates to its FOIA regulations to include the FHFA Office of Inspector General. The FHFA-OIG, which came into existence in October 2010, did not exist when FHFA’s original FOIA regulations were issued in 2009.The FHFA final regulation lists the various revisions to the agency’s 2009 FOIA regulation, as well as describes what information is exempt from disclosure.

Industry insiders are cautiously expressing optimism about widespread reports that the Federal Housing Finance Agency is having second thoughts about implementing its proposed overhaul of mortgage servicing compensation in the face of massive lender pushback.Numerous published reports have fueled the industry’s expectation that the FHFA is working to tactfully back away from proposed alternatives for a government-sponsored enterprise compensation model intended to benefit servicers, consumers and investors.The Finance Agency’s September discussion paper set out two alternatives for changing the current 25 basis-point minimum fee compensation method for mortgage loan servicers. One alternative would reduce the minimum-servicing fee to as low as 12.5 bps payment with a 5 bps reserve fund, and the second alternative would institute a fee-for-service method whereby the loan servicer would be compensated with a flat fee per month for each performing loan they service.

Both Fannie Mae and Freddie Mac retained sizeable shares of mortgage securities with a not insignificant bump during the fourth quarter of 2011, according to a new Inside The GSEs analysis.The GSEs issued a combined $261.6 billion in MBS in the fourth quarter, a 13.0 percent increase from the third quarter.Fannie and Freddie dropped to $852.8 billion in MBS issued for the year, an 11.1 percent decrease in MBS issuance during the January to December period. The GSEs’ issuance represented 72.1 percent of total MBS produced during 2011.Between the two companies, Fannie and Freddie registered an ample 77.1 percent share of new MBS issued during the quarter that ended Dec. 31, 2011, up from the 69.1 percent the two companies held during the third quarter and surpassing the 74.8 percent share both GSEs held during the first quarter.

A Federal judge in Chicago tabled for the moment the Federal Housing Finance Agency’s hopes of a speedy ruling in its favor of its lawsuit to exempt Fannie Mae and Freddie Mac from the city’s new vacant building ordinance, although the judge appears open to hearing the FHFA’s jurisdictional argument.Last month, U.S. District Court Judge Joan Lefkow denied the FHFA’s request for summary judgment in its lawsuit against Chicago while she ordered the city to file its response to the Finance Agency’s litigation.Filed in December, the FHFA’s lawsuit on behalf of the two GSEs seeks to prevent the city from enforcing the ordinance which requires mortgagees to pay a $500 registration fee for vacant properties and requires monthly inspections of mortgage properties to determine if they are vacant.

Despite watching two long-time competitors shoved to the sidelines by eroding reserves, private mortgage insurers continued a slow rebound from near-irrelevance just two years ago, while crowning a new market leader for the first time since 1994. Exactly who the new industry leader isn’t clear. Most private mortgage insurers include Home Affordable Refinance Program loan originations in the new insurance written figures that they report to Inside Mortgage Finance. However, United Guaranty has declined to participate in our survey, and the numbers released by AIG, the MI’s...(Includes three data charts)

Congressional lawmakers, still smoldering over multi-million dollar bonuses paid to executives of taxpayer-subsidized Fannie Mae and Freddie Mac, are moving aggressively to cut compensation levels at the government-sponsored enterprises. Last week the Senate approved by voice vote an amendment to prohibit top GSE executives from receiving such bonuses while Fannie and Freddie remain in federal conservatorship. The two companies have received more than $182.0 billion in aid since the government takeover in September 2008. Sponsored by Sens. John McCain, R-AZ, and Jay Rockefeller, D-WV...

State attorneys general and federal officials this week announced a massive legal settlement with five major mortgage servicers, finally concluding a torturous 16-month-long negotiation. Some 49 states – including New York, California and Florida – agreed to the $25 billion settlement with JPMorgan Chase, Bank of America, Wells Fargo, Ally Bank and Citigroup. The agreement does not provide blanket immunity for the lenders, which can still face criminal charges and are subject to claims over securitization practices and claims brought by individual borrowers. The agreement is based on investigations by...

Moody’s Investor Services ranked as the most active rating service in the non-mortgage ABS market last year, but finished 2011, as the least involved in non-agency MBS activity, according to a new Inside MBS & ABS ranking and analysis. Moody’s rated a total of $89.3 billion of non-mortgage ABS last year, or 70.4 percent of total issuance. That was up from a 53.7 percent share in 2010, when Moody’s rated some $58.9 billion and finished second to Standard & Poor’s. Moody’s strengths in 2011 were in the credit card, vehicle finance and business loan sectors, capturing over 70.0 percent of each of those...

A week after federal and state enforcement agencies launched a residential MBS investigative effort, reports have surfaced that Ally Financial, Bank of America, Citigroup, Deutsche Bank and Goldman Sachs are about to be sued by the Securities and Exchange Commission for allegedly misrepresenting the quality of mortgages they packaged and sold to investors. Officials at the SEC, which never confirms specific Wells Notices of impending legal action, declined to comment on the investigation, as did spokesmen for Ally, Citi and Goldman. Representatives from Bank of America and Deutsche Bank did not...