Experts agree that the federal government plays too big a role in the housing market, but panelists at a Federal Reserve conference last week said there is little consensus on how to fix it. FHA is “not our silver bullet,” observed Janis Bowdler, a director at the National Council of La Raza. “Surely, it’s stepping in while we are in a tight credit market. But it’s no long-term solution.” One problem with FHA is that lenders aren’t required to offer it, which means entire communities are left “credit-starved,” Bowdler said. “This leaves them in the same vulnerable position to predatory lenders that they were in five or six or 10 years ago,” she...

The Federal Housing Finance Agency this week defended its massive legal action against many of the nation’s largest financial institutions on behalf of Fannie Mae and Freddie Mac over the government-sponsored enterprises’ losses on non-agency mortgage backed security purchases. The Finance Agency contends that 17 financial institutions sold Fannie and Freddie some $196 billion of MBS, mostly between 2005 and 2008, that caused losses to the GSEs for which there should be compensation. Filed late last week in federal and state courts in New York and in federal court in Connecticut, the lawsuits seek damages and civil penalties under... [Includes one data chart]

Iowa Attorney General Tom Miller this week sought to allay concerns of the New York congressional delegation, denying that Empire State’s attorney general was ousted from an executive committee negotiating a nationwide foreclosure settlement with major banks to silence legitimate opposition. Responding to a letter from NY House Democrats, Miller said New York AG Eric Schneiderman was invited to join the core negotiating team of state AGs in June but refused. Miller, who is leading the negotiations, said Schneiderman “voluntarily” walked away from the negotiating table to “pursue another path.” Miller said Schneiderman was asked to...

Senate Republicans’ commitment to block the confirmation of any nominee to the Consumer Financial Protection Bureau will prevent the agency from deploying all of its supervisory and enforcement powers – at least as far as nonbanks are concerned – and that’s infuriating Senate Democrats. Partisan squabbling was on full display this week as the Senate Banking, Housing and Urban Affairs Committee considered President Obama’s nomination of Richard Cordray, currently chief of enforcement for the CFPB, to be the first director for the fledgling agency. “The purpose of today’s hearing should be to consider whether Mr. Cordray is qualified for that job. Instead...

In a not unexpected development, PMI Mortgage Insurance has become the second mortgage insurer in less than a month to be suspended by Fannie Mae and Freddie Mac as an approved GSE mortgage insurer after the company announced state regulators placed PMI under a supervisory order.Mortgages insured by PMI Mortgage Insurance or its affiliates PMI Mortgage Insurance Co. (MIC) and PMI Insurance Co. (PIC) with notes before May 19, 2011, or after Sept. 16, 2011, will no longer be purchased or securitized by Fannie or Freddie, the GSEs announced separately last week.

The Federal Housing Finance Agency has issued an interim final regulation with a request for comments on changes to its existing Privacy Act regulations.

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 Obama administration is expected to roll out a more aggressive agency refinance program soon as part of a new economic stimulus package with Wall Street analysts predicting the plan will likely focus on pricing changes at Fannie Mae and Freddie Mac or an expansion of the Home Affordable Refinance Program.A recent report by Amherst Securities Group notes that a massive government refinance program “is unlikely, as it could not be implemented without subjecting the GSEs (and implicitly the taxpayer) to an increased level of risk.”

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.

The Federal Home Loan Bank system has requested that federal regulators clearly and unambiguously exempt the FHLBanks’ long-standing mortgage purchase programs from the government’s emerging risk-retention rule on securitization.In comments submitted to regulators last month on the interagency proposed rule, the 12 FHLBanks signed a joint letter to ensure the Banks’ Acquired Member Assets programs will be exempt under the final rule.