Fannie Mae announced this week it can change pricing and other terms under purchase agreements and mortgage-backed securities contracts with lenders should the GSE deem it necessary. According to the alert to servicers, Fannie is asserting its right to change pricing terms under standard purchase agreements, master agreements or mortgage securitization contracts. For any contracts and agreements entered into on or after May 1, Fannie said it reserves the right to change pricing “one or more times” during the term. Such changes may include the base guaranty fee, loan-level price adjustments and guaranty-fee adjustments on mortgages delivered under mortgage-backed securities contracts or as whole loans.

A national consumer advocacy group, whose own investigation of FHA credit overlays spurred a federal probe of nearly two dozen FHA lenders, said it is keeping an eye on Fannie Mae’s and Freddie Mac’s use of loan-level price adjusters as a potential discriminatory lending practice. The National Community Reinvestment Coalition said it’s still waiting to hear from the Department of Housing and Urban Development about the results of multiple investigations HUD launched in December 2010 after NCRC found that 22 lenders set borrower credit scores as high as 640 for FHA loans, even though the FHA guarantees loans with scores as low as 580.

Senate Democrats are drafting legislation to force Fannie Mae and Freddie Mac to expand the Home Affordable Refinance Program for underwater borrowers even farther beyond the newly unveiled HARP 2.0. The draft legislation by Sens. Robert Menendez, D-NJ, and Barbara Boxer, D-CA, unveiled last week during a subcommittee hearing would force the GSEs to waive representations and warranties on new HARP loans regardless of whether the refi lender serviced the previous mortgage.

Mortgage lenders large, small and in-between jockeyed for position against a backdrop of slowing new home loan originations during the first quarter of 2012. A new Inside Mortgage Finance market analysis and ranking found that an estimated $385.0 billion in new single-family mortgages were originated during the first three months of the year. That was down 3.8 percent from the fourth quarter. The two most striking trends were that 10 of the top 25 lenders posted increased production volume while the others reported declines – some of which were substantial – and nearly all top...(Includes two data charts)

The ongoing feud between Congressional Democrats and the Federal Housing Finance Agency appeared to boil over this week as the FHFA’s head answered back to charges that he’s been holding back pertinent information about the agency’s analysis of principal reductions. In a May 1 public letter to FHFA Acting Director Edward DeMarco, Reps. Elijah Cummings, D-MD, and John Tierney, D-MA, accused the agency head of playing fast and loose with the facts regarding a previously unreported 2010 Fannie Mae pilot program to forgive a borrower’s mortgage debt, as well as the facts buttressing the FHFA’s position...

NMI Holdings, Inc. has raised $550 million in initial capitalization to provide private mortgage insurance on loans sold to Fannie Mae and Freddie Mac. The money was raised through the sale of common stock in a private offering underwritten and placed by Arlington, VA-based investment bank FBR, which reportedly has a less than 5 percent stake in the new company. FBR declined to comment on the NMI transaction, citing restrictions on what it and NMI can disclose or say over the next couple of months. NMI is currently working on obtaining approvals from state insurance regulators across the country and approvals...

Although the Obama administration has failed to put forth any definitive proposal for mortgage finance reform and Congress has made little progress on the issue, some researchers are urging policymakers to reduce the role of government as much as possible. “I would dearly love to get rid of the government guarantee,” said Anthony Sanders, professor and senior scholar at George Mason University’s Mercatus Center during a panel discussion in Washington, DC, regarding the future of the government-sponsored enterprises. He added, however, that housing policy must carefully avoid creating a market...

The Federal Open Market Committee left key federal funds rates unchanged at its latest meeting this week, and continued its agency debt and MBS reinvestment policies, with no sign on the horizon of a change any time soon. “The committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency MBS in[to] agency MBS and of rolling over maturing Treasury securities at auction,” the FOMC statement said. “The committee will regularly review the size and composition of its securities holdings and is prepared to...(Includes one data chart)

Although Fannie Mae and Freddie Mac have begun buying the latest generation of Home Affordable Refinance Program mortgages with loan-to-value ratios exceeding 125 percent, a number of lenders are holding these loans in the pipeline until the government-sponsored enterprises open the spigot on securitization options for these loans. According to the Federal Housing Finance Agency, Fannie and Freddie purchased 1,548 of the high LTV HARP loans in February. FHFA Senior Associate Director Meg Burns said during an Inside Mortgage Finance webinar this week that a similar volume of 125+ LTV loans were...

The Securities and Exchange Commission gave a thumbs-up last week to some changes to the rules governing the to-be-announced market proposed by the Financial Industry Regulatory Authority to increase transparency in agency pass-through MBS transactions. The new changes will institute clear requirements for more timely reporting of two subsets of MBS TBA transactions – those that are “for good delivery” (GD) and those that are “not for good delivery” (NGD) – and include some information that has not been publicly disclosed before. The intent of the changes is to improve the ability of investors to...