The Federal Home Loan Bank system-wide minimum collateral-to-advances coverage ratio was 129 percent at year-end 2010, a 20 percentage point decrease from year-end 2009.The FHFA’s annual Report on Federal Home Loan Collateral Securing Advances – prepared for the Senate Committee on Banking, Housing and Urban Development and the House Financial Services Committee – analyzes, among other things, the ratios of subprime and nontraditional collateral to the total collateral.

A bill that would create a legislative framework for a covered bond market in the U.S., as well as a potential competitor for the Federal Home Loan Bank system, was introduced this week in the Senate, a counterpart to a long-standing covered bond bill awaiting final approval in the House.The United States Covered Bond Act, S. 1835, sponsored by Sens. Kay Hagan, D-NC, and Bob Corker, R-TN, is nearly identical to a House bill of the same name sponsored by Rep. Scott Garrett, R-NJ, and Carolyn Maloney, D-NY, H.R. 940.

The Federal Home Loan Bank Office of Finance announced that preliminary combined net income for the FHLBanks rose 86.9 percent to $469 million for the three-month period that ended Sept. 30, 2011. That was down from $732 million at the end of the third quarter 2010.For the first nine months of the year, the FHLBanks earned $1.08 billion, $305 million less than the Banks earned during the same time last year. The Office of Finance attributed the changes to lower net interest income, partially offset by other non-interest losses and lower assessments.

Lawmakers on both sides of the aisle and both chambers of Congress are warming up the hot seat next week for the man in charge of the conservatorships of Fannie Mae and Freddie Mac as they demand answers following the firestorm surrounding bonus payments for top GSE executives.In advance of what is expected to be a heated set of hearings, Federal Housing Finance Agency Acting Director Edward DeMarco dispatched a letter to lawmakers late this week to provide his perspective after approving $12.8 million in bonuses for 10 Fannie and Freddie executives.

Recent non-agency mortgage loan modifications are showing better results compared to earlier private-label modifications despite a continued slowdown in new modification activity, according to a new Fitch Ratings analysis. While the number of completed modifications dropped, transactions completed in the past 18-24 months have improved slightly over earlier programs as a result of standardized guidelines, the recent Fitch report said. Patterned on the Home Affordable Modification Program, the standardized guidelines helped to focus attention on creating more sustainable modifications. These features included...

Ginnie Mae reiterated its desire to enhance its MBS disclosures by moving towards a Freddie Mac disclosure model, but officials are not providing specifics or a timeline. During a telephone press briefing on the agency’s fiscal year 2011 results this week, Ginnie Mae President Ted Tozer said the plan to move toward loan-level disclosures is still in play and investors are being consulted regularly on the kind of disclosures they would like to get. “We want to make sure we are doing it in a controlled, prescriptive manner and we want the information that we provide to be superior and consistent,” he said. “We are also...

Republican Sen. Bob Corker this week introduced legislation that would wind down Fannie Mae and Freddie Mac in part by limiting their new MBS issuance to a declining share of total new mortgage securitization. The Tennessee lawmaker’s Residential Mortgage Market Privatization and Standardization Act would “responsibly unwind” the government-sponsored enterprises by gradually reducing their portfolios of guaranteed mortgage-related assets while taking steps to bring uniformity and transparency to the housing market so that private capital can begin to replace the GSEs. The Corker bill would annually reduce the...

The Federal Housing Finance Agency late last month announced a number of changes to the federal government’s Home Affordable Refinance Program for underwater borrowers with mortgages from Fannie Mae and Freddie Mac. But one important little detail that escaped the attention of many has to do with the borrower loss of non-recourse loan protections for borrowers who refinance. Millions of Americans live in states that have such protections that could keep them from being personally liable in the event of a default. But in many of these states, refinancing removes those protections – enabling a lender to pursue tens or hundreds of thousands of dollars more than they would legally have been entitled to without the refinance.

FHA claims rose in 2011 from last year with loss mitigation and property conveyances accounting for the bulk of paid claims, according to Inside FHA Lending’s analysis of FHA fiscal year data. Though increasing by 7.7 percent, claims are still far below the 15.0 percent average for FHA loans, said an agency spokesperson. On Sept. 30, servicers reported 635,096 mortgages in serious default, yielding a default rate of 8.7 percent. This fiscal year, FHA reported 326,892 claims, of which 200,808 were loss mitigation-related and 91,448 were property conveyance actions. Claims related to pre-foreclosure sales and Home Equity Conversion Mortgage loans showed the most ...