High-risk mortgages securitized by Fannie Mae and Freddie Mac continued to drag down earnings for the government-sponsored enterprises in the first quarter of 2011, forcing the two GSEs to go deeper into debt to the federal government. Fannie and Freddie lost a combined $13.0 billion on their mortgage-backed security guarantee programs during the first quarter, a significant deterioration from the $6.6 billion the GSEs lost during the previous quarter, according to the Federal Housing Finance Agency’s latest conservatorship report. Since the beginning of 2008 through the first quarter of 2011, Fannie and Freddie have burned through...

A new bipartisan bill introduced last week that would replace the government-sponsored enterprises Fannie Mae and Freddie Mac with a single, government-owned entity designed to issue and guarantee mortgage-backed securities demonstrates the lack of political consensus – within the Republican party and Congress in general – about how to deal with the GSE problem. The new bill, H.R. 2413, the Secondary Market Facility for Residential Mortgages Act of 2011, would effectively merge Fannie and Freddie into a single government-backed entity that would issue and guarantee MBS. The MBS would have an explicit government guarantee paid for by...

The Obama administration and Fannie Mae are requiring mortgage servicers to participate in special foreclosure prevention programs that extend forbearance periods for unemployed homeowners from 12 to 24 months to help them avoid foreclosure while seeking re-employment. The current unemployment forbearance programs have mandatory periods that are inadequate for most unemployed borrowers, said Department of Housing and Urban Development Secretary Shaun Donovan. The FHA will extend the forbearance period for unemployed homeowners to 12 months. Servicers participating in the Making Home Affordable Program may also be directed to extend the minimum forbearance period to...

In a first-of-its-kind legal action that could inspire numerous local copycat complaints, two Michigan counties are taking Fannie Mae and Freddie Mac to court in separate lawsuits claiming the two GSEs have systematically dodged paying county and state property transfer taxes for years.Last month, Oakland County, which contains the state capital Lansing, filed suit against the GSEs in federal court. Two days later, officials in Ingham County, a Detroit suburb, filed suit in state court.

Months after public commenters noted their opposition to proposed changes to the membership criteria of the 12 Federal Home Loan Banks, the Banks’ regulator, the Federal Housing Finance Agency, is still weighing its options going forward.At the end of December 2010, the FHFA released an advanced notice of public rulemaking indicating it was reviewing its regulations governing Bank membership to ensure there’s enough of a connection between Bank membership and the mission of the FHLBanks.

The mortgage servicing sector is warily eyeing new servicing standards cooked up by the government-sponsored enterprises at the behest of their regulator that strictly mandate the servicers’ delinquency management requirements. Some lenders dread an implementation predicament while others see opportunity. In late April, the Federal Housing Finance Agency announced its Servicing Alignment Initiative that requires Fannie and Freddie to devise uniform rules for servicing delinquent mortgages they own or ...

The Federal Home Loan Bank of Pittsburgh recently appointed Kristina Williams its new chief operating officer. Williams assumes the position in addition to her role as chief financial officer.

Fannie Mae and Freddie Mac issued $154.95 billion in single-family mortgage-backed securities during the second quarter of 2011, a 40.6 percent drop from the first three months of the year.The recent April-June cycle represented the second straight quarterly decline in business volume since the fourth quarter 2010 surge when the two GSEs issued $331.5 billion in MBS.

It would be “wholly inappropriate” for the Treasury Department and the Federal Housing Finance Agency to permit Fannie Mae and Freddie Mac to pursue a potential role in a new yet-to-be-launched $2 billion bond program, according to the top Republican members of the House Financial Services Committee.In an effort to shut down thoughts of potential expansion of the two government-sponsored enterprises into a new line of business, Committee Chairman Spencer Bachus, R-AL, Vice Chairman Jeb Hensarling, R-TX, and four of the committee’s subcommittee chairman dispatched a letter last week to Treasury Secretary Tim Geithner and FHFA Acting Director Edward DeMarco to express their “concern.”

Another bipartisan bill to overhaul the federal mortgage finance system introduced by two House members this week would eliminate but effectively merge Fannie Mae and Freddie Mac, replacing the two GSEs with a “secondary market facility” that would issue and guarantee mortgage-backed securities.The bill, H.R. 2413, the Secondary Market Facility for Residential Mortgages Act of 2011, would create a single entity, owned by the federal government, that would issue MBS. The MBS would have an explicit government guarantee paid for by a guarantee fee set by the Federal Housing Finance Agency.