Wells Fargo reported an 11.7 percent increase in its conventional-conforming originations during the first quarter, but the company’s GSE loan sales fell 12.2 percent on a sequential basis – quite a differential.

California remained the top state for Fannie Mae and Freddie Mac activity in the first three months of 2016 with volume reaching $36.18 billion, three times as much as Texas, which trailed in second place with $12.43 billion in volume. However, GSE activity in California saw a 23.8 percent decline from the previous quarter while volume in Texas was up by 5.2 percent, according to a new Inside The GSEs analysis. In California, the average Fannie and Freddie loan was $307,302 in line with the state’s 2015 average of $310,185. That number followed only Hawaii, which had an average loan size of $362,236 and the District of Columbia, which was $336,268.

Bank of America escaped having to pay $1.2 billion in penalties when a federal appeals court dismissed the Federal Housing Finance Agency’s allegations of fraud this week. The appeal stemmed from a 2013 verdict stating that Countrywide Home Loans, a subsidiary of BofA, was liable for damages caused by selling bad loans to Fannie Mae and Freddie Mac during the financial crisis. Whether or not a breach of contract can also support a claim for fraud was the argument and primary factor in the judge’s decision. It seems that even if a loan seller is guilty of an intentional breach of contract, it’s not considered fraud.

Top single-family executives at Fannie Mae and Freddie Mac described new technology upgrades and the success of their credit-risk transfer programs during remarks at last week’s secondary market conference sponsored by the Mortgage Bankers Association. Andrew Bon Salle, executive vice-president for single-family business at Fannie, said the GSE is working to enhance the customer experience and make doing business with the company simpler and more certain. He said customers are reporting sharp gains in efficiency from Fannie’s collateral underwriting tool, and a new version of Desktop Underwriter will be rolled out next month. A key feature in version 10.0 of DU is the inclusion of trended credit data.

Wells Fargo partnered with Fannie Mae to roll out a new 3 percent down loan program with easier qualifying guidelines catered to first-time homebuyers and low- to moderate-income borrowers. Wells Executive Vice President Brad Blackwell told Inside The GSEs that yourFirstMortgage will replace three other high-LTV GSE programs it offers. “We’ve created a single, hybrid product,” he said. In addition to a high loan-to-value ratio, the program allows downpayment and closing costs to come from gifts and downpayment assistance programs. It also offers expanded income and credit guidelines. The need to expand access to credit has been a reoccurring theme in the industry, and Wells said it’s doing just that by considering FICO scores as low...

An issue over whether the government had the right to use executive privilege to keep thousands of documents from disclosure is the centerpiece of GSE lawsuits by investors.Fifty-three documents were made public last week and helps solidify their argument that there was no need to bail out Fannie Mae and Freddie because they had more than enough capital to weather the financial crisis. The Treasury Department provided the documents to plaintiffs last week as part of a court case in Kentucky and some are calling the release a game-changer in terms of the anticipation of more documents being released. One of those high-ranking officials is Jim Parrott, former White House housing finance executive and now a fellow at the Urban Institute.

Federal Housing Finance Agency Director Mel Watt is worried about mission creep in the Federal Home Loan Banks and urges them to return to focusing on their core constituents. During remarks at the Federal Home Loan Bank Director’s Conference in Washington this week, Watt said the FHFA continues to monitor whether the FHLBanks are sufficiently focused on their core mission of providing advances and supporting secondary mortgage market access for member institutions. …

The Federal Home Loan Bank of Indianapolis awarded members this month its first aggregated pool payout in the Mortgage Purchase Program. The MPP was created to reward members for selling high-credit, quality performing loans. Forty-three Indiana and Michigan depository members received more than $761,000 in Lender Risk Account fund payouts. These payouts ranged from $65 up to as much as $112,000 depending on the dollar volume of originated mortgages sold into the pool. The MPP also offers stand-alone pools but the aggregate pools give smaller originators access to more competitive loan pricing that normally only would be available to larger-volume loan originators. Participants in the pool begin receiving LRA payouts...

The Single Security is on target for implementation in Freddie Mac’s platform in 2017 and is set to reach the second stage in 2018, according to officials speaking at the Mortgage Bankers Association secondary market conference last week. David Applegate, CEO of Common Securitization Solutions, the joint venture owned by the GSEs that is building the Common Securitization Platform, said in 2018 Fannie Mae will switch its to-be-announced business to the CSP and begin issuing Single Securities that will be fully interchangeable with Freddie Single Securities. The GSE plans to use the CSP for all of its new mortgage-backed securities issues, including non-to-be-announced products such as securities backed by adjustable-rate mortgages, said Renee Schultz, senior vice president of capital markets at Fannie.

Financing for two- to four-unit properties has become difficult since the housing crisis and Laurie Goodman, codirector of the Housing Finance Policy Center, suggests the GSEs relax the loan-to-value ratios on those properties. When Fannie Mae and Freddie Mac tightened LTV requirements based on higher default rates on two- to four-unit properties, Goodman said in a new report, the GSEs may have “overcorrected." Lending for these properties was 5 to 6 percent of all single-family lending prior to 2009, said Goodman, but has since fallen to 2 to 3 percent of origination share. She blames the GSEs’ current higher loan-to-value lending requirement.