Despite continuing growth in purchase-mortgage production, Fannie Mae and Freddie Mac saw a marked decline in their overall business during the third quarter of 2013, according to a new ranking and analysis by Inside Mortgage Finance. The two government-sponsored enterprises securitized $284.9 billion of single-family mortgages during the third quarter, a 15.6 percent drop from the previous three-month period. It marked the lowest quarterly production for the GSEs since the second quarter of last year and it was attributable to a sharp drop in refinance activity. Fannie and Freddie securitized...[Includes three data charts]

Large lenders appear to be coping better with the partial federal government shutdown, but that doesn’t mean the megabanks aren’t worried about the situation. According to interviews conducted by Inside Mortgage Finance, lenders big and small are adjusting the way they conduct business in the primary and secondary markets in the wake of the government shutdown, now in its second week. Wells Fargo and JPMorgan Chase, the largest correspondent buyers of mortgages, are waiving...

The auction is being held on the government’s behalf by DebtX. In total, 29,000 nonperforming loans will be offered for sale.

Meanwhile, smaller mortgage lenders that do not have delegated underwriting authority are reporting delays on getting loans closed.

The top five FHA funders – Wells Fargo, Quicken Loans, Freedom Mortgage Corp., Bank of America and Flagstar Bank – saw their combined originations decline by 5 percent.

Every component in the residential MBS market was down from the second quarter, and trending lower on a monthly basis, according to Inside MBS & ABS.

With some federal agencies effectively downsized by the government shutdown, Ginnie Mae continues to guarantee MBS, but it’s unclear how long it can go on with limited staff and commitment authority. Under the shutdown contingency plan drafted by the Department of Housing and Urban Development, Ginnie has limited its operations to key functions fulfill its obligations to issuers and investors. The agency said MBS guaranties would be honored during the shutdown. While the rest of the workforce is on furlough, some 44 essential salaried employees will continue...

Fannie Mae plans to issue a $675 million risk-sharing securitization in a transaction that likely will hit the market by mid-October, according to potential investors who were briefed on the government-sponsored enterprise’s plans. Market participants said Fannie has contemplated issuing two such transactions by year-end, but the company isn’t talking about specifics, at least not yet. Still, the GSE is laying...

Esoteric accounting rules, statutory loss reserves requirements and declining loan production have compelled the FHA to take a mandatory draw of approximately $1.7 billion from the Treasury even though it has plenty of cash to cover potential losses. While the agency had significant liquid assets for its forward loan portfolio, it would be required to boost reserves for its Home Equity Conversion Mortgage program to cover all expected future losses for the next 30 years, FHA Commissioner Carol Galante explained in a letter to Senate Banking Committee leaders. The announced draw became ...

The Department of Housing and Urban Development this week proposed its own “qualified mortgage” rule for FHA-insured mortgage loans that builds off the existing QM rule finalized by the Consumer Financial Protection Bureau earlier this year. The proposed rule aligns with the ability-to-repay criteria in the Truth in Lending Act as required by the Dodd-Frank Act. Once the proposal becomes final and takes effect, it would replace the CFPB’s rule for FHA loans. The DFA has set a seven-year timetable for FHA, the VA and the Rural Housing Service to promulgate their own QM rules. HUD’s proposed QM rule would ...