HUD Delays Implementation of Short-Sale Participation Requirement. The implementation of the PFS Participation Requirement, which is found in Mortgagee Letter 2013-23, Updated Pre-Foreclosure Sale and Deed-in-Lieu-of-Foreclosure Requirements, has been delayed indefinitely. All other provisions included in the mortgagee letter remain in effect. Previous guidance on short-sale participation requirements also remain in effect until further notice. FHA to Consolidate Lender ID Numbers. The FHA will consolidate the lender identification numbers of those participating in both the FHA Title I and Title II programs, provided ...

The Federal Reserve’s relentless acquisition of agency MBS has been the biggest factor in the changing complexion of the MBS investor picture, far outstripping the tortoise-like pace at which the market has expanded this year. The Fed increased its agency MBS holdings by 12.8 percent during the second quarter of 2013, according to a new Inside MBS & ABS profile of investor classes in the mortgage securities market. The central bank added $137.2 billion to its agency MBS holdings during the quarter, and its gross acquisitions totaled $466.6 billion since the beginning of the year. That represented...[Includes two data charts]

The 12 Federal Home Loan Banks saw a hefty 9.6 percent increase in the volume of advances outstanding during the second quarter of 2013, but the outlook for the FHLBank’s primary money-maker remains cloudy. (Includes one data chart.)

The Federal Housing Finance Agency this week issued a final rule requiring annual stress tests for Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, as mandated under the Dodd-Frank Act.

The Federal Home Loan Bank of Chicago has announced a partnership with Ginnie Mae to issue securities guaranteed by the secondary market agency and backed by home loans originated by member financial institutions. The new conduit product, “MPF Government Mortgage-Backed Securities,” provides another secondary mortgage market outlet for lenders originating mortgages insured by the FHA or guaranteed by the VA or the Rural Housing Service. Low-volume lenders that currently lack direct access to the secondary market are expected to benefit from the new FHLBank program. MPF GMBS would allow lenders to ... [1 chart]

The Federal Home Loan Bank of Chicago will issue Ginnie Mae MBS backed by mortgages originated by member financial institutions, the two entities announced jointly this week. The new conduit product, called the MPF Government MBS, is an offshoot of the Chicago FHLBank’s Mortgage Partnership Finance program. The new product is intended to provide smaller mortgage lenders that lack direct access to the secondary mortgage market another option for their customers. Lenders will be...

Fannie Mae and Freddie Mac mortgage-backed securities remained the preferred investment choice of the 12 Federal Home Loan Banks during the second quarter of 2013, with a negligible increase from the previous quarter, according to a new analysis and ranking by Inside The GSEs based on data from the Federal Housing Finance Agency. Meanwhile, Ginnie Mae securities posted a modest but noticeable decline within the FHLBank system during the period ending June 30, 2013. GSE MBS accounted for 73.9 percent of combined FHLBank MBS portfolios, up 1.9 percent from the first quarter. The Finance Agency’s data do not separately break out Fannie and Freddie volume or share.

Despite a “proactive and thorough” horizontal review of the Federal Home Loan Banks’ previously diagnosed deficiencies in unsecured lending practices, the Federal Housing Finance Agency needs to clamp down harder on the FHLBanks to ensure total compliance, according to a new report by the FHFA’s Office of Inspector General.The FHFA-OIG report issued last week follows up on the official watchdog’s June 2012 audit in which it flagged “potentially risky unsecured credit management practices” by the 12 FHLBanks. Over 900 primary and secondary unsecured credit violations at seven FHLBanks were noted, with risk-management deficiencies “of varying degrees” found at the other five Banks, noted the OIG.

Bank of New York Mellon has come under scrutiny for its actions in the proposed $8.5 billion settlement involving Bank of America and investors in 530 non-agency MBS issued by Countrywide Financial. A trial to approve the settlement regarding repurchase requests started in June and is on a break until early September. While the proposed settlement involves a payout from BofA, which acquired Countrywide, the settlement is an agreement between BNYM and 22 institutional investors represented by the law firm of Gibbs & Bruns. The agreement was reached under Article 77 which allowed BofA to have the settlement apply to all investors in the Countrywide securities in question. “I can honestly say...

Standard & Poor’s Rating Services has revised its outlook for the Federal Home Loan Bank of Seattle to “stable” from “negative,” S&P announced two weeks ago. S&P said its revision reflects “significantly reduced losses within the bank’s private-label mortgage-backed securities portfolio and strengthening capital.”