Bulk sales of real estate owned properties by Fannie Mae, Freddie Mac and the FHA that would become rental properties may help relieve pressure from an excess of inventory for sale, but it will require a change in how the agencies have traditionally handled their foreclosure inventory. The Federal Reserve earlier this month made a strong case for an REO-to-rental strategy, arguing that even if it costs the agencies a little more in foreclosure losses it could help the broader housing market by firming up prices and shifting more units to meet growing demand for rental housing. Many private...

Fannie Mae and Freddie Mac have drummed up little support for their controversial proposal to pay mortgage servicers a flat fee for performing loans, but one top-tier lender has stepped forward to publicly endorse the idea. Ally Financial in a comment letter to the Federal Housing Finance Agency said it supports the so-called fee-for-service proposal, combined with a policy that would provide for the separation of excess interest-only cash flows from the underlying mortgage servicing rights. The company, which ranked as the fifth-largest servicer in the market as of the end of September, did...

Citing the urgent need to take “immediate action to prevent more foreclosures,” a group of more than two dozen House lawmakers is urging President Obama to appoint a new permanent Federal Housing Finance Agency director via a recess appointment. In a letter sent to the president last week, 28 California Democrats said the FHFA under the stewardship of Acting Director Edward DeMarco has “consistently and erroneously interpreted its mandate” as Fannie Mae and Freddie Mac’s regulator “far too narrowly” and failed to help struggling California homeowners. “As the fiduciary of government-backed...

The Consumer Financial Protection Bureau wasted no time in moving forward aggressively with its new director, last week releasing its mortgage origination examination procedures that will be used to scrutinize mortgage lenders and brokers in both the bank and nonbank sector of the industry. The procedures are the clearest indication yet that nonbanks are generally going to be held to the same standards, expectations and requirements as their more traditional banking counterparts. The new procedures outline the CFPB’s supervisory approach to making sure mortgage originators comply with federal...

Early indicators suggest that mortgage origination volume was up significantly during the fourth quarter of 2011, but momentum heading into the new year was relatively weak. In earnings reports, eight top lenders have reported solid increases in production levels over the previous quarter, and as a group they posted their best three-month volume of the year. Wells Fargo, U.S. Bank and BB&T reported hefty increases in production during the fourth quarter, with Citi, PHH Mortgage and PNC also putting up big numbers. Chase managed a much smaller increase than its peers, while...(Includes two data charts)

Demands to repurchase poorly performing mortgages have resulted in a spike in the number of mortgage fraud-related Suspicious Activity Reports (SARs) filed by banks in 2011, according to the Department of the Treasury’s Financial Crimes Enforcement Network. In its 2011 annual report, FinCEN said increased buyback demands by investors have forced large mortgage lenders to conduct additional reviews of loans they originated, resulting in higher SARs filings last year. A review of SAR filings in the first quarter of 2011 found that the number of mortgage fraud reports rose to 25,485, up 31 percent from...

Congress’ 11th hour decision at the end of last year to fund a temporary tax cut with a decade-long hike in the guarantee fees that Fannie Mae and Freddie Mac charge to offset potential losses from bad loans will likely prolong the intended wind down of the GSEs, making it much harder to untangle the government from the mortgage market, say experts.Late last month, the Federal Housing Finance Agency directed Fannie and Freddie to increase g-fees on new mortgage products by 10 basis points starting April 1.The FHFA’s directive to the GSEs implements the Temporary Payroll Tax Cut Continuation Act of 2011, passed by the House and Senate and signed by President Obama on Dec. 23. The legislation mandates that Fannie and Freddie raise their single-family guarantee fees by “not less than” 10 bps. The provision is scheduled to sunset in 2021.

The Federal Home Loan Banks continue to show an investment preference for Fannie Mae and Freddie Mac mortgage-backed securities during the third quarter of 2011, posting a modest increase 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, meanwhile, remained popular within the FHLBank system during the three-month period ending Sept. 30, 2011.GSE MBS accounted for 68.9 percent of combined FHLBank MBS portfolios, up 1.7 percent from the second quarter of 2011. The Finance Agency’s data do not separately break out Fannie and Freddie volume or share.

Fannie Mae will soon begin offering loan-level data for its single-family mortgage-backed securities to help investors, the GSE announced last week.Fannie said it will post the data files on an enhanced version of PoolTalk, the GSE’s online disclosure application."The first release will provide at issuance loan-level data for newly issued single-family MBS,” explained Fannie. “Subsequent releases aim to enhance the at-issuance file by including additional data elements and to provide updated loan-level data on a monthly basis.” The initial information will be available at the end of the first quarter, followed by monthly reports featuring adjustable-rate mortgage statistics, fixed-rate mortgages, interest-only loans and MBS data, Fannie said.

The Federal Reserve is calling for the design of a large-scale rental program of government-owned foreclosed properties as the best bet to moderate the inflow of unsold homes even as the Federal Housing Finance Agency shapes the eagerly awaited government REO reduction initiative.The Fed white paper, disseminated among the leaders of the Senate Banking and House Financial Services committees last week, recommends that the GSEs work to convert foreclosed properties into rental housing.The paper states that a government-facilitated REO-to-rental program could take many forms.