Fannie Mae and Freddie Mac would be brought “on budget” by adding the two government-sponsored enterprises’ outstanding obligations to the federal deficit, while also mandating the use of “fair value” accounting for the FHA to take into account risk as well as borrowing costs, under legislation sponsored by a high-ranking House Republican. Last week, the House Budget Committee passed H.R. 3581, the Budget and Accounting Transparency Act of 2012, introduced by Rep. Scott Garrett, R-NJ, as part of a comprehensive package of 10 reform bills by House GOP members who are pushing to enforce spending...

A group of six real estate finance trade organizations has called upon the Department of Housing and Urban Development to hold off on implementing a proposed rule on the “discriminatory effects standard” of the Fair Housing Act until the U.S. Supreme Court can weigh in on the issue this spring. The American Bankers Association, American Financial Services Association, Consumer Bankers Association, Consumer Mortgage Coalition, Independent Community Bankers of America and Mortgage Bankers Association asked HUD to postpone its rulemaking process to establish uniform standards for discrimination under the...

Expect the run up to the fall elections to curb any meaningful results in terms of a legislative overhaul of Fannie Mae and Freddie Mac. However, industry insiders say it’s quite likely that lawmakers will work through the year to tweak various GSE reform proposals for the next Congress to take up in 2013.As Congress resumed this week following the holiday break, members returned to some 14 bills in the House advancing their way through committee – though only a couple are considered “comprehensive” reform legislation. Meanwhile, two bills filed at the end of last year in the Senate got the other chamber of Congress into the GSE reform debate after a long dormancy.

A trio of real estate finance trade groups is calling upon Congress to leave the GSEs’ guarantee fees alone as lawmakers devise a way to pay for tax cuts for the remainder of 2012.The Mortgage Bankers Association, National Association of Realtors and National Association of Home Builders dispatched a joint letter to House and Senate leaders late this week noting their united opposition “to increasing g-fees for reasons other than minimizing the GSE’s risk exposure.” Late last month, the Federal Housing Finance Agency directed Fannie Mae and Freddie Mac to increase g-fees on new mortgage products by 10 basis points starting April 1.

No matter which political party controls the House during next year’s 113th Congress, there will be a new House Financial Services Committee chairman in charge of setting the agenda as both the current chair and the ranking member are vacating their positions at the end of 2012.Rep. Spencer Bachus, R-AL, said this week he will observe the House’s six-year term limit rule for chairmen and ranking members and not seek a waiver with the House Republican Conference. On Nov. 28, Rep. Barney Frank, D-MA, the committee’s one-time chairman and current ranking member announced he would retire from Congress at the end of his present term. Bachus, who was elected to the House in 1992, is seeking re-election this fall.

Securitization experts are expecting a rerun of last year in 2012, as the U.S. economy slowly rights itself and most segments of the asset-backed securities market generate reasonable new issuance and stable performance. While observers suggest the housing market may make only modest improvement this year, no one expects much non-agency mortgage activity. Growth in issuance of non-agency mortgage-backed securities is going to be very slow, said Ron Mass, co-head of structured products at Western Asset Management Co. Because the market is underwriting the mortgage borrower, and no longer relying...

President Obama used his State of the Union address this week to announce a new federal-state law enforcement project aimed at mortgage origination and securitization practices and to propose a broad federal refinance program for performing underwater non-agency mortgages that would be funded with fees imposed on banks. Most observers say the refi proposal stands little chance in Congress and is mostly a campaign tool aimed at banks and the track record of Republican lawmakers. “I’m sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a...

Richard Cordray, the new director of the Consumer Financial Protection Bureau, this week parried with a key House Republican over disclosure of the agency’s regulatory agenda, a lengthy to-do list that was virtually dictated by Congress in the Dodd-Frank Act. “Since the onset of the financial crisis, members of Congress have heard from businesses of all sizes that markets ... need certainty. In this regard, the CFPB has failed the test,” said Rep. Patrick McHenry, R-NC, chairman of the House Oversight and Government Reform Subcommittee on TARP, Financial Services and Bailouts of Public and Private...

The U.S. Court of Appeals for the Sixth Circuit recently took on Molosky v. Washington Mutual Inc., which addressed the preemption of certain state law claims under the federal Home Owners Loan Act. The plaintiffs in this case alleged that certain fees charged by their loan servicer in connection with the prepayment of their mortgage violated both the Michigan Usury Act and their mortgage contract.The lower court had previously rejected the suit on the basis of HOLA preemption, prompting the borrowers to appeal. The Sixth Circuit basically split the difference. On the one hand, the ...

Reducing monthly payments to a sustainable level for distressed borrowers who are significantly underwater on their mortgages may require principal reductions, in addition to interest rate concessions and loan term extensions, but pursuing such a policy is not without significant drawbacks, according to a Federal Reserve analysis. In a white paper sent to the banking committees on Capitol Hill last week, the Fed dove into the controversial issue of whether Fannie Mae and Freddie Mac should be taking more aggressive steps like principal reduction to help distressed borrowers and shore up...