Freddie Mac’s government conservator is stepping up to shut down a potentially costly lawsuit filed against the GSE by the Mortgage Guaranty Insurance Corp. both by legal and by extra-legal means. Last month, the Federal Housing Finance Agency told a Wisconsin federal court that it lacks jurisdiction over the pool insurance suit the mortgage insurer filed against Freddie. Given that the suit would impede FHFA in its capacity as the GSE’s conservator, the court should dismiss MGIC’s suit, according to court papers filed by the Finance Agency on July 20.

Freddie Mac last week said it will tweak its eligibility requirements to be more in line with Fannie Mae and expand the pool of its borrowers eligible to refinance through the recently revised Home Affordable Refinance Program. Under Freddie’s Relief Refinance Mortgage Program – which includes HARP – the requirements for refinancing will be aligned for mortgages with loan-to-value ratios that are equal to or less than 80 percent. Fannie’s HARP refi program currently makes no distinction between loans that are above or below 80 LTV, while Freddie draws a line in a number of areas for borrowers going through HARP at their existing servicer.

Fannie Mae and Freddie Mac each sold significantly more units of real estate-owned properties than the two GSEs took during the second quarter of 2012, a factor at least one of the companies says helped push it into the black during the April to June earnings period. Fannie reported its total inventory of REOs as of June 30, 2012, was 109,266 compared to 114,157 on March 31, selling nearly 5,000 more foreclosed homes than the GSE acquired. "Sales prices on disposition of our REO properties improved in the second quarter of 2012 as a result of strong demand,” explained Fannie in its second-quarter earnings report. “We received new proceeds from our REO sales equal to 59 percent of the loans’ unpaid principal balance in the second quarter of 2012, compared with 56 percent in the first quarter of 2012 and 54 percent in the second quarter of 2011.”

The mortgage credit-enhancement business has been no place to be the past few years, but many observers think the market has touched bottom and is starting to come back. After hemorrhaging losses since 2008, the two biggest mortgage credit-enhancement providers – Fannie Mae and Freddie Mac – reported positive net income on their single-family guaranty businesses during the second quarter. The private mortgage insurance industry hasn’t gotten there yet. Fannie and Freddie reported...[Includes two data charts]

The expanded Home Affordable Refinance Program saw a major surge in business activity during the second quarter of 2012, following a similar boom during the first three months of the year, but overall refi business appears to be slowing. The Federal Housing Finance Agency this week reported a huge 86.6 percent jump in HARP volume in June, mostly resulting from a new securitization option for refi mortgages with loan-to-value ratios exceeding 125 percent. Fannie and Freddie purchased some 53,758 of such loans during June, and they accounted for 24.9 percent of HARP business during the second quarter. There was also...[Includes two data charts]

A number of nonbanks have increased their correspondent originations recently with plans to take more market share as the big banks focus on retail lending. Redwood Trust, PennyMac Mortgage Investment Trust, Homeward Residential and others have all touted their recent correspondent efforts, both for agency mortgages and non-agency originations. Since 2010, Redwood has used its conduit platform to supply...

Mortgage insurance activity increased dramatically during the second quarter of 2012, with private MIs gaining ground on the government-insurance programs, according to a new ranking and analysis by Inside Mortgage Finance. A total of $133.22 billion of home mortgages were originated with some form of primary MI coverage during the second quarter, up 22.9 percent from the first three months of the year. It was the biggest quarterly output of primary MI since the middle of 2009, and it lifted insured mortgage originations to $241.64 billion in the first half of the year, up 36.1 percent. Despite a relentless assault on their financial health that has driven three companies into runoff mode, private MIs racked up...[Includes three data charts]

Fannie Mae and Freddie Mac this week both celebrated large second-quarter profits that easily exceeded their installment payments to the U.S. Treasury as the price of government conservatorship, but buried in their earnings report was the hard truth lenders know too well: contentious buyback demands showed no sign of letting up. “Our expectation [is] that the amount of our outstanding repurchase requests to seller/servicers will remain high and that we may be unable to recover on all outstanding loan repurchase obligations resulting from seller/servicers’ breaches of contractual obligations,” Fannie said. As of the end of June, the two government-sponsored enterprises had...[Includes one data chart]

Hardball conditions imposed by Freddie Mac in order to permit lenders to continue selling loans insured by Mortgage Guaranty Insurance Corp., over the objections of state regulators, has cast a cloud over MGIC’s already uncertain prospects. Fannie Mae has approved a new MGIC insurance entity that also has the backing of the insurance company’s home state regulator, the Office of the Commissioner of Wisconsin. But MGIC warned investors last week that Freddie’s Aug. 1 approval of the new unit is conditional and could be withdrawn at any time and ends Dec. 31, 2012. Freddie says it can and will pull...

Encouraged by the performance so far of the recently revised Home Affordable Refinance Program, the Federal Housing Finance Authority announced this week it is working to expand the pool of borrowers eligible to refinance through HARP by aligning Freddie Mac policies with Fannie Mae’s. The agency announced the additional tweaks to HARP at the same time it said it would not sanction a Treasury Department-endorsed effort to allow the two government-sponsored enterprises to write down mortgage principal as part of loan modifications. The FHFA said that Freddie will soon issue...