It looks like the controversial risk-retention proposal won’t be issued by federal regulators until sometime next year, as major components of the Dodd-Frank Act remain in limbo. “I think much of the Dodd-Frank regulatory process is on hold until after the elections, and we’re unlikely to see decisions on most major issues until sometime in 2013,” said Steven Abrahams, an analyst at Deutsche Bank Securities. “The only process that seems to be rolling is the one run by the Consumer Financial Protection Bureau to define mortgage origination and servicing standards.” As he sees it, “the first half of next year will probably see...

The proposal by Fannie Mae’s and Freddie Mac’s regulator to levy extra guaranty fee charges on government-sponsored enterprise mortgages originated in five states that have unusually slow foreclosure timelines not only adds to the problems faced by small lenders but it’s also less than clear that it would be an effective part of the solution, say industry executives. If implemented as proposed, the Federal Housing Finance Agency would target five states – Connecticut, Florida, Illinois, New Jersey and New York – for an additional, one-shot guaranty fee of between 15 and 30 basis points that would take effect in 2013. “The size of the fee adjustments are intended...

The Federal Housing Finance Agency’s Office of Inspector General reported last week that Freddie Mac will increase its repurchase requests to between $0.8 billion and $1.2 billion this year and between $2.2 billion and $3.4 billion overall following its review of the GSE’s settlement agreement with Bank of America in January 2011. A year ago the OIG took the FHFA to task for approving what the IG considered a lowball $1.35 billion agreement from BofA to Freddie to settle current and future repurchase claims.

The new representation and warranty framework for GSE loans announced last week by the Federal Housing Finance Agency will go far to providing a clearer picture of prospective putbacks on loans delivered to the GSEs starting next year but more is needed, analysts conclude. At the FHFA’s direction, Fannie Mae and Freddie Mac are implementing a new rep and warrant framework for all conventional loans funded, acquired, securitized or guaranteed on or after Jan. 1, 2013. The new framework places greater emphasis on quality control review processes to be applied when the loans are delivered to the GSEs earlier in the loan process and improves the clarity around repurchase requests, noted Fitch Ratings.

The Federal Housing Finance Agency’s official watchdog is advising the regulator to apply greater scrutiny to Fannie Mae as it works on a “promising initiative” to shift poor performing GSE loans to more capable financial institutions. This week’s report by the FHFA’s Office of Inspector General found little fault with a controversial transaction last summer between Fannie and Bank of America under the GSE’s High Touch Servicing Program. However, the OIG concluded that there was room for improvement in the FHFA’s and Fannie’s supervision of the program.

House Republicans this week made a surprise effort to advance a forgotten GSE reform bill with nominal bipartisan support directly to the House floor. It’s unclear whether the effort will succeed but an industry lobbyist says the move was an exercise in futility nonetheless. H.R. 2440, the Market Transparency and Taxpayer Protection Act, from Rep. Robert Hurt, R-VA, was one of more than two dozen “suspension” bills added to the lineup of expected quick and easy votes. In the House, suspension of the rules is a procedure generally used to quickly pass non-controversial bills. H.R. 2440 had not been advanced for a vote as Inside The GSEs went to press.

The new “framework” governing Fannie Mae and Freddie Mac repurchase demand activity may have a relatively modest impact on an issue that has been a major factor in the mortgage market over the past few years. Analysts suggest that lenders will be cautious about changing origination strategies that have focused on minimizing buyback risk until they see how the government-sponsored enterprises implement the new policy. Many observers remain concerned about how the GSEs will respond to ongoing pressure from their regulator – and the Office of the Inspector General – to ...

Some three years after it was first declared to be on fiscal thin ice, the Federal Home Loan Bank of Seattle took a big step toward firmer financial ground earlier this month. The Federal Housing Finance Agency, which regulates the 12 FHLBanks, reclassified the Seattle Bank as “adequately capitalized,” allowing it to move forward with plans to repurchase excess capital stock for the first time since December 2008. “Even though this initial repurchase amount is relatively small, it is a significant milestone in our return to normal operations,” explained FHLBank of Seattle President and CEO Michael Wilson in a letter to members.

Fitch Ratings said it has affirmed the ‘AAA’ long-term issuer default rating and support floors of the Federal Home Loan Bank of Atlanta.Fitch noted that as a GSE, the Atlanta Bank’s IDRs are linked to the U.S. sovereign rating. “FHLBank Atlanta has historically benefited from its affiliation with the U.S. government and its current IDRs and outlook benefit from the implicit support that it receives,” said the rating agency. “Fitch believes that implicit sovereign support for the FHLBank system would be forthcoming due to its important mission as it pertains to homeownership, serving as a source of liquidity to its members and the wide global distribution of FHLBanks debt.”

Fannie Mae announced this week it has tapped Bradley Lerman to be the GSE’s new executive vice president, general counsel and corporate secretary. Lerman, 56, joins Fannie Mae from Pfizer where he was senior vice president, associate general counsel and chief litigation counsel.Lerman replaces Timothy Mayopoulos, who was promoted to CEO in June.