Mortgage delinquency rates trended higher in the second quarter of 2012, although the foreclosure picture appeared to be improving. The Inside Mortgage Finance Large Servicer Delinquency Index showed a 22 basis point increase in overall defaults, including loans just one month late and those in foreclosure. After dipping below the 10.00 percent level in March for the first time since late 2009, the overall past-due rate bounced back up to 10.10 percent as of the end of June. Most servicers reported...[Includes two data charts]

The Federal Housing Finance Agency’s public expression of “concern” last week about proposals to use the eminent domain powers of local governments to seize performing underwater mortgages might be enough to significantly delay or even derail the effort outright, say experts. The conservator of Fannie Mae and Freddie Mac and regulator of the 12 Federal Home Loan Banks warned that unspecified “action might be necessary” on its part “to avoid a risk to safe and sound operations” at the government-sponsored enterprises. “FHFA has significant concerns about the use of eminent domain to revise...

A federal judge in New York last week rejected the motion by a trio of former Fannie Mae executives to dismiss a securities fraud civil lawsuit brought late last year against the top GSE officers by the Securities and Exchange Commission. In December 2011, the SEC filed suit in the U.S. District Court for the Southern District of New York alleging that former Fannie executives made material misrepresentations to the public, investors and the media about the government-sponsored enterprise’s exposure to subprime mortgage loans in 2007 and 2008. The SEC filed an identical parallel civil suit against Freddie Mac the same day. The SEC’s complaint against former Fannie executives Daniel Mudd (CEO), Enrico Dallavecchia (chief risk officer) and Thomas Lund (EVP for single family) alleges...

The Senate Finance Committee recently approved legislation by a bipartisan vote of 19-5 to extend tax relief for principal forgiven on a mortgage, which is set to expire at the end of this year, and restore the mortgage insurance deduction that expired at the end of 2011. The “Family and Business Tax Cut Certainty Act of 2012” approved by the Senate Finance Committee would extend both tax breaks through 2013. Prospects for the legislation are murky, according to industry analysts, as Republicans are working to limit the extension of certain tax breaks. “This markup is not...

The Federal Housing Finance Agency this week joined a growing chorus raising warnings about proposals to use the eminent domain powers of local government to seize performing underwater mortgages out of non-agency MBS pools. In an unusual move, the agency said it has “significant concerns about the use of eminent domain to revise existing financial contracts and the alteration” of Fannie Mae, Freddie Mac and Federal Home Loan Bank securities holdings. The FHFA formally invited public comment on the concept and warned that “action may be necessary on its part [as conservator and regulator of the government-sponsored enterprises] to avoid a risk to safe and sound operations and to avoid taxpayer expense.” The issue drew attention this week because both Fannie and Freddie managed...[Includes one data chart]

Single-family MBS issuance in the agency market dropped 4.8 percent from June to July, according to a new Inside MBS & ABS market analysis and ranking. A total of $133.23 billion of agency single-family MBS were issued last month, a huge 82.9 percent increase of the amount produced in July of last year. That brought year-to-date issuance in 2012 to $893.92 billion, an increase of 40.5 percent from the same period last year. Fannie Mae was the only agency to see...[Includes one data chart]

Both Fannie Mae and Freddie Mac emerged from the second quarter of 2012 firmly in the black with each company posting a free-and-clear profit – only the second time for each GSE since being drafted into government conservatorship nearly four years ago. The period ending June 30, 2012, marks the second consecutive quarter that Fannie will not require taxpayer assistance to keep the company going. Freddie will also not require an additional draw from the U.S. Treasury, the first time since the first quarter of 2011 which was the first time ever either GSE posted a profit since before conservatorship.

The Federal Housing Finance Agency captured the industry’s attention this week by formally citing “significant concerns” about proposals to use local government eminent domain powers, a paradigm shift the agency sees as potentially costly to Fannie Mae, Freddie Mac and the Federal Home Loan Banks. In a request for public comment, published in the Aug. 8 Federal Register, the Finance Agency warned that “action might be necessary” on its part “to avoid a risk to safe and sound operations” at the GSEs and to avoid taxpayer expense.

Fannie Mae will soon require all of its servicers – and any subservicer or third-party originator the servicer uses – to be in full compliance with the requirements of the Housing and Economic Recovery Act of 2008, the GSE announced this week. “On or before Nov. 1, 2012, the servicer is required to complete a Fannie Mae supplier registration profile that accurately reflects its ownership status, regardless of whether it is ‘HERA-Inclusive,’ and its team composition report,” explained Fannie.