Recent procedural rulings in Federal Housing Finance Agency lawsuits against non-agency MBS issuers and underwriters again favored the conservator of the government-sponsored enterprises, prompting some to speculate that issuers will move to settle the lawsuits. Meanwhile, a number of other MBS-related litigation developments continue to pile up. U.S. District Judge Denise Cote is overseeing 16 cases filed by the FHFA against non-agency MBS issuers and underwriters regarding non-agency MBS purchased by the GSEs between 2005 and 2007. The FHFA alleges misrepresentations by the issuers and underwriters on the MBS. Last week, Cote dismissed...

Refinancing of underwater and nearly submerged Fannie Mae and Freddie Mac mortgages continued to spur business at the government-sponsored enterprises during the third quarter. During the third quarter of 2012, the two GSEs securitized a total of $66.91 billion of refinance mortgages with loan-to-value ratios exceeding 85 percent, a proxy for business originated under the Home Affordable Refinance Program. That was up 13.3 percent from the second quarter, according to an Inside MBS & ABS analysis of loan-level securitization data. Official HARP data are reported...[Includes two data charts]

Fannie Mae and Freddie Mac reported a sharp decline in the volume of mortgage repurchases and indemnifications made by lenders during the third quarter, as well as a slowdown in the volume of new buyback demands, according to a new Inside Mortgage Finance analysis of data reported by the two government-sponsored enterprises in financial reports released last week. During the third quarter, lenders repurchased or otherwise indemnified the GSEs for $4.396 billion of mortgages that had been subject to buyback demands, a decline of 26.0 percent from the second quarter. It was the lowest repurchase volume since the first three months of last year. On a year-to-date basis, repurchases are...[Includes one data chart]

The CFPB and the Federal Housing Finance Agency, the regulator and conservator of Fannie Mae and Freddie Mac, have agreed to work together on setting up a National Mortgage Database, something officials hope will be the first comprehensive repository of detailed mortgage loan information. The National Mortgage Database is to include information spanning the life of a mortgage loan from origination through servicing and incorporate a variety of borrower characteristics. Specifically, the database will feature...

GSEs, Private MIs Agree to Drop Pre-Approval Requirements. Fannie Mae and Freddie Mac and the private mortgage insurance industry have agreed to eliminate pre-approval requirements for foreclosure alternatives, such as short sales and deeds-in-lieu of foreclosure. The separate agreements with MIs should help distressed homeowners avoid foreclosure by doing away with costly, time-consuming MI reviews that delay foreclosure-prevention transactions, according to the government-sponsored enterprises. WIMC Fully Acquires Reverse Mortgage Solutions. Walter Investment Management Corp. has completed its $120 million acquisition of ...

Hurricane Sandy homeowners with FHA and VA mortgages have been given temporary relief, including a 90-day suspension on foreclosures and as much as 100 percent financing for victims who have lost their homes. The Department of Housing and Urban Development and the Department of Veterans Affairs have announced federal disaster assistance to hard-hit areas in Connecticut, New York and New Jersey. Both agencies announced a three-month freeze on foreclosures in the affected areas as well as forbearance on foreclosures of FHA and VA home loans. The VA advised its lenders that careful counseling should ...

There is substantial risk that the FHA may end up with a negative net worth, which would require congressional appropriations for the mortgage insurance fund and passage of legislation reforming the FHA, said a former top official at the Department of Housing and Urban Development. In remarks this week at the Urban Institute, John Weicher, former assistant secretary for housing and FHA commissioner in 2001-2005, said it is very unlikely in this weak economic recovery to see ...

Complicating the post-election process of regulatory implementation is the expectation that a number of top officials at key agencies are likely to move on during President Obama’s second term. For the mortgage finance industry, perhaps the most notable potential departure among administration officials is that of Treasury Secretary Tim Geithner. Geithner has dropped hints more than once this past year that he wants to move on. Treasury officials did not respond to requests for confirmation of that as of press time. Other key officials on the industry’s departure watch list include...

A task force of state insurance regulators has agreed to require insurers to set aside additional capital to cover risks tied to residential and commercial MBS in an effort to buffer the industry from losses in the event of a severe downturn. The National Association of Insurance Commissioners’ Valuation of Securities Task Force voted 11-2 to support a proposed increase in the NAIC’s capital requirements for U.S. life insurers. The change in capital requirements is driven by year-end NAIC modeling assumptions related to RMBS and CMBS. The change raises...

Fannie Mae and Freddie Mac continued to trim their retained holdings of MBS and unsecuritized mortgages during the third quarter, but at a slower pace than in previous periods, according to an analysis by Inside MBS & ABS of earnings reports released this week by the two government-sponsored enterprises. One of the conditions of the conservatorships the GSEs entered four years ago was that they would reduce their retained mortgage portfolios by 10 percent a year. Those terms were revised in August to include a 15 percent annual wind-down, which would take each GSE’s investment portfolio down to $250 billion by the beginning of 2018, four years sooner than under the previous arrangement. As Freddie noted...[Includes one data chart]