Fannie Mae, Freddie Mac and three federal agencies are cranking up existing efforts to dispose of the GSEs’ ample real estate owned inventory of homes into overdrive by seeking investors’ ideas for converting thousands of REO properties into rentals.Last week, the Federal Housing Finance Agency, the Treasury Department and the Department of Housing and Urban Development put out a “request for information” on how best to sell GSE and FHA-owned REO properties.

Fannie Mae and Freddie Mac lost less in the second quarter of 2011 than during the previous three month period and less than one year ago, but the two GSEs continue to struggle with a huge run of losses well into the fifth year with no end in sight.

Fannie Mae last week reminded its servicers of their responsibilities “for performing all property maintenance functions” throughout the foreclosure process “to ensure that the condition and appearance of the property are maintained satisfactorily.”

A group of House Democrats wants the Obama administration to extend the forbearance period up to a year for unemployed homeowners with mortgages owned by Fannie Mae or Freddie Mac.

A report issued late last week by the Federal Housing Finance Agency Office of Inspector General has concluded that the FHFA did nothing to subvert its role as Fannie Mae and Freddie Mac’s regulator when the agency negotiated the GSEs’ administrative responsibilities under the Treasury Department’s Home Affordable Modification Program.However, the FHFA-OIG noted there was ample room for improvement in the Finance Agency’s oversight of the GSEs’ financial agency agreement (FAA) with Treasury, which resulted in poor communication and differing expectations as to the payment and scope of the HAMP-related work that the GSEs performed.

A conservative, non-partisan public interest group is considering its options following a recent federal appeals court decision affirming the Federal Housing Finance Agency’s right to withhold documentation revealing the extent of political campaign donations made by Fannie Mae and Freddie Mac.On Aug. 5, the U.S. Court of Appeals for the District of Columbia upheld a lower court ruling against Judicial Watch.

AARP has filed a class action lawsuit against Wells Fargo Bank and Fannie Mae in the U.S. District Court for the Northern District of California in San Francisco on behalf of reverse mortgage borrowers and their survivors in what it says is an attempt to head off illegal Home Equity Conversion Mortgage foreclosures and evictions.

The retained mortgage portfolios at Fannie Mae and Freddie Mac continued to melt slowly during the second quarter as the government-sponsored enterprises reported significant losses and turned to the federal government for more funding to stay in business. The two GSEs held some $1.416 trillion of mortgages and mortgage-backed securities in portfolio at the end of June, a decrease of 2.3 percent from the first quarter and down 9.0 percent from the same period a year ago. The biggest decline was in unsecuritized home mortgages, down 2.5 percent from the first quarter, while GSE MBS holdings ... [includes one data chart]