The zero risk weight for Ginnie Mae mortgage-backed securities remains despite Standard & Poor’s recent lowering of the long-term rating of the U.S. government and federal agencies from AAA to AA+ and affirmation of the A-1+ short-term rating, according to federal regulators. The rating agency also removed both the short- and long-term ratings from CreditWatch, where they have been since July 14 with negative implications. On August 5, federal banking and credit union regulators announced that, for risk-based capital purposes, the risk weights for Treasury securities and securities guaranteed by...

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]

Struggling with a run of huge losses well into its fifth year, Fannie Mae and Freddie Mac now confront the added challenge of worsening financial condition among private mortgage insurers, one of the few backstops the government-sponsored enterprises have to offset some of their losses. Fannie noted in its 10-Q filing with the Securities and Exchange Commission that the “current weakened condition” of its mortgage insurer counterparties has created “an increased risk that the insurers will fail to fulfill their obligations” to reimburse the GSE for its ...

Mortgage lenders faced a rising tide of repurchase requests from the secondary market during the second quarter of 2011, according to an Inside Mortgage Finance analysis of earnings reports from Fannie Mae and Freddie Mac. The two government-sponsored enterprises said they realized $4.1 billion in repurchases and indemnifications during the second quarter, up 46 percent from the first three months of the year. It was the second largest repurchase binge on record, trailing only the $5.9 billion reported for the fourth quarter of 2010. Most of the damage was done by ... [contains one data chart]

Fannie Mae said this week it would submit a request to the Treasury Department via the Federal Housing Finance Agency for an additional $5.1 billion to eliminate the GSE’s net worth deficit.

The House Financial Services Committee’s second highest ranking Democrat is again facing ethics charges stemming from actions she allegedly took to aid a minority bank connected to her husband to recover losses it suffered when Fannie Mae and Freddie Mac preferred stock plummeted after the GSEs were put into conservatorship.The House Ethics Committee announced two weeks ago it will restart its investigation of ethics charges against Rep. Maxine Waters, D-CA, with the hiring of Washington, DC, attorney Billy Martin as an outside counsel to the committee to “review, revise and assist the committee in completing the matter.”

The Federal Housing Finance Agency said last week to expect further litigation in its ongoing efforts to recover losses suffered by Fannie Mae and Freddie Mac in connection to the two GSEs’ investments in non-agency securities.Last week, the Finance Agency filed suit against UBS Americas Inc. and various related entities alleging misstatements and omissions of non-agency MBS purchased by Fannie and Freddie.