Don’t hold your breath waiting for a legislative remedy in Congress to reform and/or replace Fannie Mae and Freddie Mac. The expectation on the Hill and throughout the industry is that meaningful action on GSE reform won’t occur until 2013 at the earliest, industry sources tell Inside The GSEs.

The increasing return of private capital to the mortgage market that is expected to materialize post Dodd-Frank will provide plenty of opportunity for mortgage real estate investment trusts, with those investing in agency MBS likely to face a particularly low-risk environment, some leading financial services analysts suggest. gWe believe that the increased privatization of the mortgage market combined with the risk retention requirements of the equalified residential mortgagef will create...

The Home Affordable Refinance Program generated 8.2 percent less business during the first quarter of 2011 than in the previous three-month period, according to new government data. Although overall HARP activity slowed in early 2011, there was a measurable increase in refinances of performing Fannie Mae and Freddie Mac loans that had current loan-to-value ratios exceed-ing 105 percent. But such loans accounted for only 1.7 percent of total refi activity by the two govern-ment-sponsored enterprises. HARP transactions accounted for...[includes one data chart]

VA originations fell 10.4 percent during the first quarter, following a downward trend in all four corners of the single-family mortgage originations market during the period. Veteran mortgage originations totaled $18.15 billion in 1Q11, down from $20.26 billion in the fourth quarter of 2010, according to Department of Veterans Affairs data. Interest Rate Refinancing loans accounted for 40.7 percent of total VA loan production during the first three months of the year. The top 25 VA lenders combined for $12.08 billion with a little more than half in refis for a 66.6 percent share of the VA market. They, too, saw their volume drop ... [Includes one graph and one data chart]

The FHA could lose 7 percent, or $2.8 billion, of its current business if loan limits are lowered this year, according to a government analysis of the impact of new lower loan limits going into effect in the fall. Barring congressional action, the temporary FHA loan limits will revert by statute to the lower loan limits determined by the Housing and Economic Recovery Act for loans insured by the FHA on or after Oct. 1. The FHA single-family loan limit, which is tied to the conforming loan limit, continues to start at $271,050 in low-cost areas and goes as high as $729,750 in high-cost areas of the country. On Oct. 1, however...

The impending overhaul of the government-sponsored enterprises’ servicing guidelines will likely have a negative impact on the servicing of non-agency mortgages, according to industry analysts. The agency servicing overhaul includes financial incentives and penalties, which prompted a warning from Moody’s Investors Service. “Because of the incentives and penalties, servicers will likely shift their focus to loans backing the GSEs’ MBS and away from loans in private-label MBS,” Moody’s said. “This shift will mean that...

Fannie Mae this week nearly doubled the total output of the non-agency MBS market in 2011 with a new REMIC backed by FHA home-equity conversion mortgages. The government-sponsored enterprise provided a guaranty wrap on Mortgage Equity Conversion Asset Trust 2011-1, a $9.26 billion transaction backed by HECM loans originated and serviced by Bank of America. Through the first four months of the year, total non-agency MBS production came to just $9.98 billion – most of which were re-securitizations. Fannie said it intends to...

The chairman of the House Budget Committee said this week that a full and transparent accounting of the cost to taxpayers of the federal takeover of Fannie Mae and Freddie Mac is the first, best step to determine how to wind down the two government-sponsored enterprises.During a hearing on taxpayer exposure in the housing markets relating to Fannie, Freddie and the FHA, Rep. Paul Ryan, R-WI, took aim at the White House’s plan for a post-GSE mortgage market. “While the Treasury Department has put forward a ‘framework for reform,’ the Obama administration still...

The Office of the Inspector General of the Federal Housing Finance Agency says it has numerous audits and investigations in the works as part of its plan to evaluate and, if necessary, correct the performance of the FHFA and the government-sponsored enterprises it regulates.Last week, the FHFA-OIG released two separate but related reports – OIG’s Inaugural Semiannual Report to Congress and its Audit and Evaluation Plan. The former mainly outlined the new agency’s operations from its activation in October 2010 through March of this year, while the latter explained...