A large investment portfolio intended to generate added earnings is inconsistent with the purposes of the Federal Home Loan Bank System and is a "misuse" of the system's preferential access to capital markets, the head of the FHLB’s regulator told Bank directors this week. [Includes one data chart.]

A bipartisan bill unveiled this week by two House members would overhaul the federal mortgage finance system to ensure private sector capital for homebuyers and capital requirements to protect taxpayers - without Fannie Mae or Freddie Mac.

U.S. banks are generally more liquid than Basel III liquidity standards would suggest thanks in large part to the treatment of banks' large portfolios of GSE-related securities, according to Fitch Ratings.

Peter Federico, Freddie Mac's executive vice president - Investments and Capital Markets, has tendered his resignation after more than two decades with the GSE.

Both Fannie Mae and Freddie Mac continued to shrink their mortgage portfolios as required by government regulators during the first quarter of 2011 even as the two government-sponsored enterprises posted dramatically different earnings reports for the first three months of the year. Under the terms of the purchase agreement with the Treasury Department and under Federal Housing Finance Agency regulation, both Fannie and Freddie’s mortgage-related investments portfolio are subject to a cap that decreases by 10 percent each year until each portfolio reaches $250 billion. By Dec. 31, 2011, neither company will be able to hold an unpaid principal balance for mortgage-related investments that exceeds $729 billion. “FHFA has stated that we will not be a substantial buyer or seller of mortgages for... [Includes one data chart]

Between the servicing alignment initiative recently announced by the Federal Housing Finance Agency, the consent decrees bank regulators struck with some top mortgage servicers last month, and possible national servicing standards from federal policymakers in the near future, there may be very little room left for state attorneys general and regulators to influence servicing practices going forward...

After taking a steep drop in production during the first quarter, the agency MBS market will likely see another downturn in new issuance in the second half of this year. A total of $340.8 billion of single-family MBS were issued during the first quarter by Fannie Mae, Freddie Mac and Ginnie Mae. That was...[Includes three data charts]

Following last week’s lengthy and at times contentious markup session where then House Financial Services Capital Markets and GSE Subcommittee pushed through a package of eight bills to bolster oversight of Fannie Mae and Freddie Mac, industry observers are still working to get their arms around...

The member advance business – the core product line for the Federal Home Loan Banks – continued to decline at the end of 2010, hitting a nine-year low. The 12 FHLBanks reported a total of $478.6 billion in outstanding advances at the end of last year, down 24.2 percent from the end of 2009. It was the lowest volume of... [Includes two data charts]

Newly issued guidance from the Federal Housing Finance Agency requires Fannie Mae, Freddie Mac and the Federal Home Loan Banks to report any fraudulent financial instruments that they purchased or sold. but the guidance also requires Fannie and Freddie to take the extra step of submitting monthly fraud reports to...