Two Ohio pension funds have filed suit in federal court against the Federal Housing Finance Agency to overturn a recent Finance Agency rule that could curtail any award for damages the funds might someday receive in their securities fraud suit against Fannie Mae. In papers filed in the U.S. District Court, District of Columbia, lawyers for the Ohio Public Employees Retirement System and the State Teachers Retirement System of Ohio disputed a final rule issued…

Mortgage lending to finance home purchases increased a hefty 32.2 percent from the first quarter to the second quarter of 2011, helping to offset a huge drop in refinance activity. Housing sales jumped 43.6 percent during the second quarter, although the housing market in 2011 is still considerably slower than it was a year ago. Conditions looked better in the second quarter largely because the first quarter of 2011 was one of the worst on record for housing sales and home-purchase lending. Fewer than 1 million new and existing home sales were reported during the first quarter of 2011, yielding a record low of just... [Includes two data charts]

The Senate Banking, Housing and Urban Affairs Committee may not be moving any closer to a decision on reforming the mortgage finance system, but lawmakers should be getting well versed in the various analytic perspectives on the role of the federal government. At a hearing this week, the committee heard testimony from researchers who support winding down Fannie Mae and Freddie Mac as soon as possible and others who say private capital won’t be drawn back into the system unless there is a government guarantee. “There’s absolutely no reason to believe that private capital would immediately step-up – even if it would eventually...

The Federal Housing Finance Agency’s legal action late last week against many of the nation’s largest financial institutions on the grounds they misled Fannie Mae and Freddie Mac about the quality of subprime and Alt A MBS purchased by the government-sponsored enterprises has few positives but plenty of negative potential consequences for the market, experts say. The 17 separate lawsuits filed by the FHFA seek unspecified damages on $196 billion in mortgage securities the two GSEs purchased, mostly between 2005 and 2008. The agency conducted extensive loan-level reviews that allegedly revealed widespread discrepancies between... [Includes two pages of data]

Private investors in agency MBS could lose $13 billion to $15 billion from a new government effort to help current Fannie Mae, Freddie Mac and FHA borrowers refinance, according to a new Congressional Budget Office staff working paper. The Obama administration is expected to announce a revved-up refinance program as part of a new strategy to strengthen economic growth. A “stylized” refinance program analyzed by the CBO would have a relatively small impact on the overall economy, the analysts said. The biggest impact would be on private MBS investors and the estimated 2.9 million households that would likely be brought into the...

Fannie Mae, Freddie Mac and Ginnie Mae produced a total of $84.25 billion of new single-family MBS during August, a sturdy 19.8 percent jump from the previous month, according to a new analysis and ranking by Inside MBS & ABS. Although there was a brief bump higher in production in June, agency MBS issuance has generally been sliding lower since the end of 2010. The decline has corresponded to reduced production of refinance mortgages, which accounted for just 55.1 percent of new originations in the second quarter, down from 67.1 percent for all of last year. New data suggest the refi market is still struggling. Some 63.5 percent of...

Facing a statute of limitations deadline, the Federal Housing Finance Agency filed lawsuits against 17 firms last week in an effort to recover losses the government-sponsored enterprises suffered on their investments in non-agency mortgage-backed securities. The FHFA claimed violations of securities laws, alleging that non-agency MBS prospectuses contained material false statements and omissions. The lawsuits relate to more than $196.2 billion in non-agency MBS purchased by the GSEs. The GSEs’ combined holdings of subprime and Alt A MBS have declined since at least the fourth quarter of 2007 when they totaled $217.2 billion, according to an analysis by Inside Nonconforming Markets,. ...

A coalition of industry and advocacy groups is flexing its collective muscle as it prepares to push Senate legislation extending the current maximum mortgage loan limits. The group, comprised of 14 financial and real estate trade and advocacy associations, are lining up behind S. 1508, the Homeownership Affordability Act of 2011, which would extend the temporary high-cost area loan limit through the end of 2013. Introduced by Sens. Robert Menendez, D-NJ, and Johnny Isakson, R-GA, the bill complements a similar bipartisan effort by Reps. John Campbell, R-CA, and Gary Ackerman, D-NY, in the House Financial Services Committee to keep ...

FHA lending continued its downward trend as total originations fell 9.5 percent in July from the previous month and a whopping 41.2 percent on a year-to-year basis, according to Inside FHA Lending’s analysis of the latest data. The market saw production drop to $14.8 billion in July from $16.3 billion on a monthly basis and from $25.1 billion the same period last year. Fixed-rate mortgages comprised the bulk of originations at 93.7 percent, while purchase mortgages accounted for 78.5 percent of loans endorsed for FHA insurance for the month of July. In addition, 79.3 percent of FHA-insured loans were originated ... {includes one data chart]

As part of a new jobs and economic growth plan to be announced this week, the White House is expected to include a bid to invigorate a mortgage refinance effort that has failed to live up to expectations. Most observers think the Obama administration will opt for targeted changes to the Home Affordable Refinance Program. In a speech last week, Federal Reserve Board Governor Elizabeth Duke said HARP has been only marginally effective despite Fed estimates that as many as 4 million borrowers meet HARP’s basic eligibility requirements. Through the end of June, some 830,552 borrowers had refinanced their home loans under HARP, which allows... [Includes one data chart]