Redwood Trust could boost its jumbo acquisitions by $5.0 billion a year, according to industry analysts, due to a new partnership with the Federal Home Loan Bank of Chicago. The real estate investment trust announced last week that it has an exclusive three-year deal to purchase “high balance” mortgages from FHLBank members participating in a new product under the Mortgage Partnership Finance Program. Under the new MPF Direct, members of an ...

Redwood Trust late this week unveiled a three-year agreement with the Federal Home Loan Bank of Chicago whereby the real estate investment trust will purchase residential “high balance” loans from any member of the entire FHLBank system. The loans will be originated by members of the FHLBank system. Those lenders will then sell the mortgages to the Chicago FHLBank as part of the Mortgage Partnership Finance Program, which will then upstream the product to Redwood. The loans will have balances above the Fannie Mae/Freddie Mac loan limit of $625,500.

A North Carolina federal judge announced from the bench this week he is considering dismissing a Justice Department fraud case against Bank of America, citing a less than overwhelming preponderance of evidence. U.S. District Judge Max Cogburn said during a hearing that he is leaning toward shutting down the DOJ’s case as per the March recommendation of U.S. Magistrate Judge David Cayer, who found that the Justice Dept. has failed to prove the bank made “material” false statements to the Federal Housing Finance Board. “DOJ may not have...

With housing finance reform legislation effectively stalled just short of a Senate floor vote, the industry is beginning to shift its expectant gaze to the Federal Housing Finance Agency to take the initiative as the debate moves toward GSE preservation. Although the reform bill, S. 1217, by Sens. Tim Johnson, D-SD, and Mike Crapo, R-ID, cleared the Senate Banking, Housing and Urban Affairs Committee earlier this month, its less than impressive 13-9 vote margin all but ensures that Senate leadership will ignore the measure’s bid for a floor vote through the remainder of the 113th Congress.

Although the long-term prospects for the agency MBS market are highly uncertain, the near-term future is wherever Fannie Mae, Freddie Mac and Ginnie Mae take it – and the highly anticipated shift in investor demand as the Federal Reserve eases out of the market. The development of a common securitization platform for Fannie and Freddie will take several years, even after the Federal Housing Finance Agency narrowed the project, said Bob Ryan, a special advisor to the FHFA, during a panel session at this week’s Secondary Market Conference sponsored by the Mortgage Bankers Association. The 2014 plan for the government-sponsored enterprises includes clarifying the scope of the CSP project, which has been in the works for over a year. “We’re not talking...

The new director of the Federal Housing Finance Agency wants to set a path for Fannie Mae and Freddie Mac with less emphasis on shrinking the two GSEs and a greater focus on “the present.” In his first major policy speech, FHFA Director Mel Watt told a packed room at the Brookings Institution how he seeks to “reformulate” the agency’s past conservatorship goals for the GSEs. “Our task is to continue to fulfill our statutory mandates, to execute our strategic plan and to manage the present status of Fannie Mae and Freddie Mac,” said Watt.

The Federal Housing Finance Agency, under recently installed Director Mel Watt, will continue to ensure that the 12 Federal Home Loan Banks play their “important role” in providing reliable funding and secondary mortgage market access to member institutions, as well as maintain the Banks’ statutory affordable housing requirements, so said the man himself. Last week, in his first public speech before a financial services group, Watt cautioned FHLBank directors to keep a close watch on captive insurers that are seeking membership in the FHLB system.

Combined net income for the 12 Federal Home Loan Banks fell 18.4 percent to $555 million in the first quarter of 2014, down from $680 million in the fourth quarter and a more modest 4.3 percent decrease compared to the same period last year, according to the Federal Home Loan Bank Office of Finance. The decrease resulted primarily from a decline in non-interest income and an increase in non-interest expense, partially offset by an increase in net interest income, explained the Office of Finance.

While the housing finance reform legislation authored by Sens. Tim Johnson, D-SD, and Mike Crapo, R-ID, recognizes the “distinct nature and role of the Federal Home Loan Banks,” concern remains that the bill’s treatment of FHLBank regulation within the proposed regulator could lead to a conflict of interest that impedes the 12 Banks and their members, according to the American Bankers Association. An ABA memo to the members of the Senate Banking, Housing and Urban Affairs Committee suggested that lawmakers leave regulation of the FHLBanks with either an independent agency or strengthen the bill’s proposed regulatory firewalls.

The GSEs continued to reduce their footprint in global debt markets during the fourth quarter of 2013, with debt outstanding and issuance down from the same period year ago. Fannie Mae’s, Freddie Mac’s and the Federal Home Loan Banks’ combined debt outstanding was $1.814 billion during the period ending Dec. 31, 2013, down 0.02 percent from the third quarter and down 2.9 percent from the fourth quarter of 2012. Fannie issued $45.5 billion in new debt during the fourth quarter, a 34.9 percent decrease from the third quarter.