The single-family mortgage market continued to shrink during the first half of 2012, registering the 13th consecutive quarterly decline in mortgage debt outstanding since early 2008. The Federal Reserve reported late last week that there were $10.028 trillion of single-family mortgages outstanding at the end of June. That was down 0.5 percent from the previous quarter and represented a cumulative 10.3 percent drop since March 2008. The supply of home mortgage debt fell to its lowest level since the midway point in 2006. There are two growth sectors, however. The supply of Ginnie Mae single-family servicing surged...[Includes one data chart]

Fannie Mae and Freddie Mac would levy extra guaranty fee charges on mortgages securing property in five states to account for the increased cost of foreclosures in those states under a proposal outlined this week by the Federal Housing Finance Agency. The FHFA proposes to target five states – Connecticut, Florida, Illinois, New Jersey and New York – for an additional, one-shot guaranty fee ranging from 15 basis points to 30 bps. “The size of the fee adjustments is intended to reflect the disparity in costs, as compared to the national average,” explained the FHFA. The five states were...

Fannie Mae’s High Touch Servicing Program, an initiative that utilizes specialty servicers to deal with at-risk borrowers to help reduce the number of defaults, is basically sound, but there are some issues with controls and cost savings, a new inspector general’s report found. “An internal audit conducted by Fannie Mae raised questions about the controls surrounding the High Touch Servicing Program, as well as the likelihood that it would achieve the projected savings,” the Federal Housing Finance Agency Office of Inspector General said in a report issued this week. “Fannie Mae relied...

The most pressing concern of the Federal Housing Finance Agency’s efforts to develop a post-Fannie Mae and Freddie Mac secondary mortgage market infrastructure is engineering a state-of-the-art securitization platform that could be used by either company, as well as private issuers, the agency head noted during a speech last week. Speaking at the National Association of Federal Credit Unions Congressional Caucus, FHFA Acting Director Edward DeMarco said the agency’s “immediate priority” is a single, common platform, not a single government-sponsored enterprise security. “A cornerstone of what we are seeking to build is...

Fannie Mae and Freddie Mac mortgages originated in five states that have unusually slow foreclosure timelines would be subject to an additional, upfront guaranty fee, according to a proposal unveiled late this week by the Federal Housing Finance Agency. If implemented, the Finance Agency’s proposal would target five states – Connecticut, Florida, Illinois, New Jersey and New York – for an additional, one-shot guaranty fee of between 15 and 30 basis points in 2013. “The size of the fee adjustments are intended to reflect the disparity in costs, as compared to the national average,” explained the FHFA.

Although all of Fannie Mae’s nearly 700 real estate-owned properties sold earlier this month as part of the Federal Housing Finance Agency’s first announced REO pilot transaction moved at near or above market value, a market analyst says it remains to be seen whether this deal is the shape of things to come. San Diego-based Pacifica Companies LLC was the winning bidder of 699 Fannie properties throughout Florida. The firm paid $12.3 million for a share in a joint venture with Fannie, resulting in an estimated transaction valuation to the GSE of $78.1 million or nearly 96 percent of the properties’ estimated value, according to the transaction summary.

Fannie Mae announced this week it has tapped Bradley Lerman to be the GSE’s new executive vice president, general counsel and corporate secretary. Lerman, 56, joins Fannie Mae from Pfizer where he was senior vice president, associate general counsel and chief litigation counsel.Lerman replaces Timothy Mayopoulos, who was promoted to CEO in June.

The Federal Housing Finance Agency is currently pondering how, or whether, the GSE conservator will intervene in the controversial and ever more contentious proposal to use local eminent domain laws to effect principal reduction for homeowners by seizing mortgage loans. Early last month, the FHFA cited “significant concerns” about the eminent domain proposals, warning that “action might be necessary” on its part to avoid a risk to the safe and sound operations of Fannie Mae and Freddie Mac, as well as to avoid taxpayer expense. Some 74 organizations and members responded to FHFA’s request for input and submitted comment letters. “The acting director will consider the input received in making a final decision,” said a Finance Agency spokesman.

House Republicans this week made a surprise effort to advance a forgotten GSE reform bill with nominal bipartisan support directly to the House floor. It’s unclear whether the effort will succeed but an industry lobbyist says the move was an exercise in futility nonetheless. H.R. 2440, the Market Transparency and Taxpayer Protection Act, from Rep. Robert Hurt, R-VA, was one of more than two dozen “suspension” bills added to the lineup of expected quick and easy votes. In the House, suspension of the rules is a procedure generally used to quickly pass non-controversial bills. H.R. 2440 had not been advanced for a vote as Inside The GSEs went to press.

The Federal Housing Finance Agency’s official watchdog is advising the regulator to apply greater scrutiny to Fannie Mae as it works on a “promising initiative” to shift poor performing GSE loans to more capable financial institutions. This week’s report by the FHFA’s Office of Inspector General found little fault with a controversial transaction last summer between Fannie and Bank of America under the GSE’s High Touch Servicing Program. However, the OIG concluded that there was room for improvement in the FHFA’s and Fannie’s supervision of the program.