A Federal judge in Chicago tabled for the moment the Federal Housing Finance Agency’s hopes of a speedy ruling in its favor of its lawsuit to exempt Fannie Mae and Freddie Mac from the city’s new vacant building ordinance, although the judge appears open to hearing the FHFA’s jurisdictional argument.Last month, U.S. District Court Judge Joan Lefkow denied the FHFA’s request for summary judgment in its lawsuit against Chicago while she ordered the city to file its response to the Finance Agency’s litigation.Filed in December, the FHFA’s lawsuit on behalf of the two GSEs seeks to prevent the city from enforcing the ordinance which requires mortgagees to pay a $500 registration fee for vacant properties and requires monthly inspections of mortgage properties to determine if they are vacant.

The House Financial Services Subcommittee on Insurance, Housing and Community Opportunity this week approved legislation calling for an emergency capital plan and an independent GAAP-based audit of the FHA insurance funds and programs. The FHA Emergency Fiscal Solvency Act would set minimum annual mortgage insurance premiums for the FHA and is aimed at shoring up the Mutual Mortgage Insurance Fund. Introduced by Subcommittee Chair Judy Biggert, R-IL, the bill was approved by voice vote. An amendment introduced by Rep. Scott Garrett, R-NJ, sparked a heated partisan debate, which will likely continue when...

Congressional lawmakers, still smoldering over multi-million dollar bonuses paid to executives of taxpayer-subsidized Fannie Mae and Freddie Mac, are moving aggressively to cut compensation levels at the government-sponsored enterprises. Last week the Senate approved by voice vote an amendment to prohibit top GSE executives from receiving such bonuses while Fannie and Freddie remain in federal conservatorship. The two companies have received more than $182.0 billion in aid since the government takeover in September 2008. Sponsored by Sens. John McCain, R-AZ, and Jay Rockefeller, D-WV...

Industry representatives and members of Congress looked to the role of the appropriations process as House Republicans strengthened their push for greater oversight of and transparency from the Consumer Financial Protection Bureau. The House Financial Services Subcommittee on Financial Institutions and Consumer Credit held a hearing this week to consider separate bills that would change how the CFPB is funded. H.R. 1355, the Bureau of Consumer Financial Protection Accountability and Transparency Act of 2011, introduced by Rep. Randy Neugebauer, R-TX, would remove the CFPB from the Federal Reserve System, where...

Housing economists challenged the Federal Housing Finance Agency’s controversial stance against permitting Fannie Mae and Freddie Mac to allow principal forgiveness in loan modifications, telling U.S. senators this week that mortgage loan writedowns would go a long way to cure the ongoing housing crash and foreclosure crisis. Testifying before the Senate Committee on Banking, Housing and Urban Affairs, Moody’s Analytics Chief Economist Mark Zandi told lawmakers that government policy encouraging more mortgage modifications, particularly those involving “substantial principle writedowns” would...

New regulations are re-shaping the non-agency MBS market, but economic issues, the ratings process and shifting investor appetite may have more to do with the stalled recovery in the sector, experts said during the American Securitization Forum conference last week in Las Vegas. John Arnholz, a partner at Bingham McCutchen LLP, suggested that the regulators will end up issuing a new proposed rule on risk retention, given the widespread opposition to the original proposal. The proposed premium capture recovery fund idea “came out of nowhere,” he said, adding that there is a good deal of dissent among the six...

The mortgage industry is skeptical about President Obama’s proposal for low-cost, non-agency loan refinancing program, administered by the FHA for current, underwater borrowers. Some industry participants called the plan nothing but smoke and mirrors that would likely create unrealistic expectations. But deceptive or not, the proposal first announced by the president in his State of the Union address promises to be different from the earlier, huge unsuccessful FHA experiments in foreclosure prevention – Hope for Homeowners and FHA Short Refinance programs. The proposed refi plan is a combination of ...

President Obama this week called on Congress to enact legislation to refinance non-agency borrowers through the FHA, to be paid for by large financial institutions, and to force Fannie Mae and Freddie Mac to be more accommodating. Most observers say the proposals stand little or no chance in the bitterly divided Congress, and that they might have little more success than earlier FHA refi programs for non-FHA borrowers. Under the latest proposal, borrowers with conforming-balance loans not financed by the government-sponsored enterprises would be able to get refi loans from the FHA. To be eligible, the...

The six federal agencies that have to respond to massive protests over a proposed qualified residential mortgage definition have offered little guidance on their next step, one that industry groups say is critical given its interaction with a separate rule that sets standards for qualified mortgages that show the borrower has the ability to repay a loan. “We will probably see a QM rule before a QRM rule,” said Joseph Pigg, senior counsel at the American Bankers Association. “Getting six regulatory agencies to agree will make QRM a longer process,” he noted. The QM/ability-to-repay rule is under...

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...