The Federal Housing Finance Agency needs to tweak its proposed eligibility certification form for prospective directors of the 12 Federal Home Loan Banks, according to comments received by the Finance Agency.

Debt issuance for Fannie Mae, Freddie Mac and the Federal Home Loan Banks rose during the second quarter of 2011, while Freddie recorded a decline in new debt during the April to June period.The GSEs collectively issued $726.2 billion in new debt during the second quarter, a 2.6 percent increase from the previous quarter, while GSE debt outstanding at $2.168 trillion declined 4.8 percent from the first quarter.

Several of the prudential management and operations standards recently proposed by the Federal Housing Finance Agency are “duplicative of, or conflict with, current regulatory requirements” and should be further refined before final issuance, according to a comment letter written by the 12 Federal Home Loan Banks.The FHLBanks suggest numerous and significant revisions or clarifications to the proposed rule the FHFA issued in June.

The consensus among mortgage market watchers is that the downgrade earlier this month of the GSEs by Standard & Poor’s will have no immediate, detrimental impact even as Fitch Ratings this week said it is keeping Fannie Mae and Freddie Mac’s “AAA” rating.Fitch this week also said its outlook for Fannie and Freddie’s ratings remained “stable.” The move was in concert with Fitch’s decision to keep its rating on U.S. debt at the highest grade.“A key element of the explicit support is the guarantee by the U.S. Treasury to inject funds into Fannie Mae and Freddie Mac, so that each firm can avoid being considered technically insolvent by their regulator,” said the rating agency.

The Federal Home Loan Banks are moving forward with plans that would permit the Banks to bolster their capital following confirmation earlier this month that the FHLBanks have officially paid off their interest debt on Resolution Funding Corporation bonds.The Federal Housing Finance Agency formally announced on Aug. 5 that the 12 FHLBanks completed their REFCORP obligations with their July 15, 2011 payment. The Finance Agency subsequently approved amended plans for the Banks.

Despite the newly signed debt ceiling deal passed in the nick of time this week by Congress and signed by President Obama, Fannie Mae, Freddie Mac and the Federal Home Loan Banks remain at risk of having their AAA ratings downgraded if the government fails in the future to keep its fiscal house in order, according to Moody’s Investors Service.Moody’s confirmed the AAA government bond rating of the U.S. following the raising of the statutory debt limit on Aug. 2, but the credit rating agency assigned a “negative” rating outlook to Uncle Sam.

Hedging will become much more expensive for Fannie Mae, Freddie Mac and the Federal Home Loan Banks than for anyone else as proposed new rules on the margining of uncleared derivatives will significantly increase the cost of trading, the GSEs warned federal regulators.GSEs regulated by the Federal Housing Finance Agency weighed in via comment letters on the rules proposed in April by the FHFA, as well as the Federal Reserve, the Farm Credit Administration, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency.

A coalition of six Federal Home Loan Banks has gone to court seeking formal standing as investors in the proposed $8.5 billion Bank of America settlement over mortgage-backed securities even as court papers reveal investors could be owed a sum three times greater than the current BofA proposal.The Federal Home Loan Banks of Boston, Chicago, Indianapolis, Pittsburgh, San Francisco and Seattle together own certificates in 73 of the trusts that are part of the proposed settlement for which they paid more than $8.8 billion.

The Federal Home Loan Bank of Chicago recently announced that the nonprofit lender and real estate consultant IFF has joined the Bank as a member.Formerly known as the Illinois Facilities Fund, IFF is the first community development financial institution to join the FHLBank of Chicago and only the sixth CDFI nationally to become part of the FHLBank system.

The Federal Housing Finance Agency is seeking comments on a long-awaited, recently-proposed rule to establish prudential standards relating to the management and operations of Fannie Mae, Freddie Mac and the Federal Home Loan Banks.The Housing and Economic Recovery Act of 2008 requires the FHFA director to establish standards that address 10 separate areas relating to the management and operation of the GSEs and FHLBanks and authorizes the director to establish the standards by regulation or by guideline.