FHFA sued UBS in 2011 over $4.5 billion in RMBS securities that the bank sponsored and $1.8 billion in third party RMBS sold to Fannie Mae and Freddie Mac.

Loan applications are strong at Citadel, a newly launched nonprime lender. HUD goes on furlough for a day.

In what may well be his last appearance before Congress as chairman of the Federal Reserve, Ben Bernanke this week indicated the central bank’s much-debated “tapering” of its massive asset purchase program is likely to begin later this year and then cease altogether by the middle of 2014, assuming the U.S. economy progresses as the Fed anticipates. At the same time, the Fed chief emphasized the Federal Open Market Committee will continue to be flexible in responding to market and economic conditions, all based on the flow of data coming into the committee. Bernanke said the FOMC has made...

HUD thinks random sampling would help make post-endorsement reviews more efficient, but some legal advisors believe the cost is too great.

The Fed chief told elected officials that whatever housing finance reform plan they choose to replace Fannie Mae and Freddie Mac, it should be clear to private investors about the government’s role in the market.

Fear and loathing in the mortgage job market? Movement Mortgage has let several mortgage workers go. Can looser underwriting standards save the day?

The Federal Housing Finance Agency and the Treasury Department illegally implemented the so-called sweep amendment last summer that altered Fannie Mae’s and Freddie Mac’s preferred stock purchase agreements to seize nearly all the two GSEs’ profits, in direct violation of the 2008 conservatorship legislation, according to investors’ lawsuits filed in federal court last week. Unlike the initial litigation filed by investors last month that challenges the entire 2008 government takeover of Fannie and Freddie, the separate suits filed by hedge-fund Perry Capital and by Fairholme Capital Management claim that Treasury’s August 2012 amendment to the preferred stock purchase agreements violated the Housing and Economic Recovery Act of 2008, which placed the GSEs in conservatorship.

The Federal Housing Finance Agency has wrongfully denied Fannie Mae and Freddie Mac permission to uphold their statutory duty under the Housing and Economic Recovery Act of 2008 to make contributions to the National Housing Trust Fund, according to a lawsuit filed by the National Low Income Housing Coalition. Fil0ed last week in the U.S. District Court for the Southern District of Florida, the suit by the NLIHC – along with the Right to City Alliance and four other individual plaintiffs – calls on the FHFA to make good on the GSEs’ obligations to make contributions into the trust fund. The fund was set up under HERA to provide subsidies to rehabilitate and fund low-income housing, but Fannie’s and Freddie’s payment obligations to the trust fund were suspended when the GSEs were placed into government conservatorship in September 2008.

The Federal Housing Finance Agency’s official watchdog recommended in a report this week that the agency devise a way to measure how its guaranty fee hikes of the past two years have actually increased the participation of private investment in the mortgage-backed securities sector. As Fannie Mae’s and Freddie Mac’s conservator, the Finance Agency directed the GSEs to increase their guaranty fees as a means to encourage greater private-sector investment in mortgage credit risk, reduce their dominant position in housing finance and limit potential taxpayer losses, the FHFA Office of Inspector General report noted. “The enterprises’ average combined guaranty fees have nearly doubled since 2011 – due to legislation and FHFA’s initiative – and FHFA plans further gradual guaranty fee increases to spur private-sector mortgage investment,” said the OIG. “However, it is not yet clear how high FHFA must increase guaranty fees to achieve its objectives.”

A Manhattan federal judge earlier this month dismissed a class-action lawsuit against Standard & Poor’s Financial Services after finding no evidence that the rating agency defrauded investors when it gave a favorable rating to Fannie Mae stock prior to the financial crisis.The suit, filed in December 2012 on behalf of potentially hundreds of thousands of investors who bought stock in an offering by Fannie in May 2008, four months before the GSE was taken over by the government, alleged that S&P knowingly misrated Fannie’s stock. Valued at about $25 per share when it was issued, the stock dropped to about $3 per share after Fannie’s government conservatorship began in September 2008.