The Federal Housing Finance Agency has not “effectively employed” its monitoring and supervision of Fannie Mae and Freddie Mac risk related to real estate owned properties, according to the FHFA’s Office of Inspector General. “The FHFA will benefit from a more comprehensive REO risk assessment and from using the assessment to enhance its planning and supervisory activities,” said the OIG. “A more comprehensive assessment of the risks associated with [Fannie’s and Freddie’s] shadow REO inventory can help the FHFA provide for the enterprises’ safety and soundness and help protect the taxpayers from undue losses by ensuring the agency focuses on its supervision where it can best mitigate risks.” From 2007 through 2011, the GSEs’ combined REO inventory rose...

In the proposed rule the Consumer Financial Protection Bureau released two weeks ago addressing various issues associated with high-cost mortgages, the bureau revealed the most detail yet regarding a National Mortgage Database that’s been in development for the past two years. A 2010 report by the Government Accountability Office indicated officials from the Federal Reserve and representatives of Freddie Mac were working on such a database on a pilot basis. “The officials are exploring the feasibility...

Fannie Mae executives and staffers were at the front of the line of Countrywide Home Loan’s sophisticated influence peddling operation that showered not just GSE employees but Washington insiders with deeply discounted mortgage loans in order to curry favor, according to a newly released House committee report. The 136-page report completes a three-year investigation by the House Oversight and Government Reform Committee of Countrywide’s so-called Friends of Angelo program, named after CEO Angelo Mozillo, which ran for a dozen years until the lender was acquired by Bank of America in 2008.

Mortgages modified by Fannie Mae performed slightly better than Freddie Mac loans in the short term although the performance gap between the two GSEs remained relatively narrow one year after modification, according to the Office of the Comptroller of the Currency.The OCC Mortgage Metrics Report for the First Quarter of 2012 noted that Fannie loans had an 11.4 percent re-default rate three months after modification, while Freddie mods saw a 12.3 percent rate. At the six-month mark, Fannie stood at 18.3 percent compared to Freddie’s 18.6 percent.

The McGraw-Hill Companies announced it has tapped Freddie Mac’s former chief executive as the newest member of its board of directors. Charles Haldeman became the company’s 13th director last week after the company added a new seat to the board table. The rating agency Standard and Poor’s is part of the McGraw-Hill companies.

Fannie Mae will no longer purchase or securitize mortgages on properties encumbered by certain transfer fee covenants that were created on or after Feb. 8, 2011, under a new policy that goes live next week. The policy, which takes effect July 16, follows a rule finalized by the Federal Housing Finance Agency in March that prohibits Fannie, Freddie Mac and the Federal Home Loan Banks from taking on mortgages “encumbered by certain types of transfer fee covenants and related securities.” In light of the new policy, mortgages on affected properties must be purchased by Fannie as whole loans no later than July 13, 2012, or must be delivered by July 13 into MBS pools with issue dates before July 1, 2012.

Former Freddie Mac executive David Stevens had a change of heart and will not step down as the head of the Mortgage Bankers Association in order to take the number two job at SunTrust Mortgage as initially planned, much to the relief of industry observers. Stevens’ resignation as MBA president and CEO was to have taken effect June 30. However, the association declared on July 2 that Stevens would not relocate to SunTrust’s Richmond, VA, headquarters but rather remain ensconced in the MBA’s downtown DC corner office. On May 30, Stevens, 55, announced his resignation as the MBA’s head barely a year after he was recruited as a marquee player to revive the downsized and demoralized trade group.

Two of the three biggest barriers to a return of the non-agency mortgage sector – the premium capture cash reserve account and the qualified mortgage definition – are embedded in the Dodd-Frank Act, industry officials say. And the third is what’s not in the controversial law: any substantive reform of Fannie Mae and Freddie Mac. The biggest challenge to reducing the government’s domination of the mortgage market is the lack of direction on the government-sponsored enterprises, said Tom Deutsch, executive director of the American Securitization Forum, during a hearing this week.

There is little to no chance of GSE reform bills moving any further in Congress during the remainder of the legislative year, say industry insiders who warn that the political priority for next year’s Congress will shift from restructuring Fannie Mae and Freddie Mac to scaling back the massive Dodd-Frank Act. For all the sound and fury surrounding Republican-led filing of 25 separate pieces of GSE legislation in the House and Senate during the 112th Congress, nearly all the bills, including six proposals considered “comprehensive” GSE reform, remain bottled up in committee.

The sooner the Federal Housing Finance Agency acts to clarify Fannie Mae’s and Freddie Mac’s positions on what triggers a loan repurchase request, the better it will be for lenders and for the recovery of the housing finance system, industry groups say. Over the past three years, the two GSEs have asked for more than $80 billion in flawed loan repurchases from lenders, prompting an overabundance of underwriting caution, according to Fitch Ratings. “Reduced uncertainty around the reasons as well as the timing and remedies available for repurchase may help ease lenders’ concerns and improve credit availability,” said Fitch. “Establishing clear and detailed repurchase standards, developing reporting and enforcement mechanisms and creating clear timelines that govern the process would be positive steps and would be welcome by lenders and investors alike.”