The list of reasons to reform Fannie Mae and Freddie Mac is growing and taxpayer risk is increasing the longer the current housing finance system lingers in uncertainty, according to speakers at a Capitol Hill briefing on government-sponsored enterprise reform sponsored by the Mortgage Bankers Association. Fowler Williams, president and CEO of Crescent Mortgage, said that without the secondary mortgage market outlet, smaller institutions like his would not be able to make 30-year fixed-rate mortgages available in rural and small towns. Ethan Handelman, vice president for policy and advocacy at the National Housing Conference, said...

But the news wasn't all good: After peaking at $280 billion in the third quarter of 2015 – an eight-year high – purchase-mortgage originations tumbled 25 percent in 4Q...

Vintage Alt A mortgages continue to cause losses at the GSEs.

Freddie and Fannie both posted earnings north of $2 billion for the fourth quarter. But Freddie posted a net loss of $475 million in the third quarter of last year after booking a stunning $4.17 billion charge on its derivatives.

The inability of Fannie and Freddie to build capital is a huge issue, Stevens said.

Ditech increased its servicing portfolio to $266.7 billion from $265.4 billion in 3Q, and said it is pursuing “potential business opportunities,” including plans to pursue more subservicing contracts.

As IMFnews went to press Monday, investors were once again punishing the stock, with shares trading down 20 percent on the day to $4.95. Its all-time high is $60 a share.

Ocwen continues to face regulatory issues, including constraints on growth via acquisitions. However, Fitch recently upgraded a number of the firm’s servicer ratings from a level 4 to a level 3-minus with a “stable” outlook.

If refinancings accelerate, Wells Fargo will need to step up production to protect its massive servicing portfolio...

Fannie Mae and Freddie Mac continued to trim their retained investment portfolios in late 2015 with most of the focus on shrinking their non-agency MBS and holdings of their own securities. Freddie Mac’s retained mortgage portfolio declined 15.1 percent last year, ending at $346.91 billion, safely below the $359.3 billion cap set by the Federal Housing Finance Agency. The government-sponsored enterprise reduced its non-agency MBS holdings by $25.60 billion, or 38.8 percent, from its yearend 2014 level. While that included hefty declines in both subprime and Alt A MBS, the biggest decline, 41.3 percent, was...[Includes one data table]