Borrowers rushing to get their purchase-mortgage applications submitted before FHA’s higher annual mortgage insurance premiums took hold April 1 helped boost total purchase applications last week, according to the latest data from the Mortgage Bankers Association. The MBA’s weekly mortgage applications survey for the week ending March 29 showed a surge in purchase applications for government loans. The surge, fueled mostly by FHA applicants, helped boost the total number of purchase applications received by lenders during the period. “Total purchase applications increased last week, due to an almost ...

Fannie Mae and Freddie Mac mortgage-backed securities remained the preferred investment choice of the 12 Federal Home Loan Banks during the fourth quarter of 2012, with a slight decrease from the previous quarter, according to a new ranking and analysis by Inside The GSEs based on data from the Federal Housing Finance Agency. Ginnie Mae securities also posted a negligible decrease within the FHLBank system during the period ending Dec. 31, 2012. GSE MBS accounted for 72.3 percent of combined FHLBank MBS portfolios, down 1.1 percent from the third quarter. The Finance Agency’s data do not separately break out Fannie and Freddie securities.

A spinoff product of the Federal Home Loan Banks’ Mortgage Partnership Finance Program experienced explosive growth in lender participation resulting in a record 2012, according to the FHLBank of Chicago. The MPF Xtra program, launched in 2008 to serve as a conduit for Fannie Mae loans, saw its volume increase from $2.8 billion overall during 2011 to $6.9 billion at year-end 2012, noted the Chicago FHLBank in its fourth quarter 2012 earnings report.

The GSEs continued to reduce their footprint in global debt markets during the fourth quarter of 2012, with debt outstanding and issuance down from the previous quarter and from the same period a year ago. Fannie Mae’s, Freddie Mac’s and the Federal Home Loan Banks’ combined debt outstanding was $1.867 billion during the period ending Dec. 31, 2012, down 2.5 percent from the third quarter and down 11.6 percent from the fourth quarter 2011, while the GSEs issued a combined total of $598.8 billion in new debt during the fourth quarter.

A federal employee union and the Department of Housing and Urban Development have agreed to implement a seven-day employee furlough because of a severe mandatory reduction in HUD’s budget in FY 2013. The seven furlough days, which also will affect FHA operations, will apply to HUD’s entire 9,100-person work force and will be spread out to one for each pay period beginning May 24. HUD initially proposed a 13-day furlough plan, which was to start May 10, but agreed to reduce it to seven days and to move the start date to May 24. Under an agreement between HUD and the American Federation of Government Employees Council 222, furlough days will occur on ...

The advance business for the 12 Federal Home Loan Banks increased by fits and starts throughout 2012 but ended the year ahead on both a quarterly and annual basis, according to preliminary figures released by the Federal Home Loan Bank Office of Finance. Advances increased 3.3 percent to $425.8 billion during the fourth quarter of 2012 while posting a smaller 1.8 percent increase from $418.2 billion a year earlier. “The demand for advances has shown some signs of regional stabilization and certain FHLBank members increased their use of advances,” said the OF.

A rejuvenated Mortgage Partnership Finance program helped its six participating Federal Home Loan Banks more than double the number of home loans funded in 2012, program officials announced this week. Last year, the FHLBanks of Chicago, Boston, Des Moines, New York, Pittsburgh and Topeka purchased $14.33 billion of loans from member banks, a dramatic increase from $6.99 billion in 2011.Introduced in 1997, the MPF provides member institutions a competitive alternative to selling to the GSEs or holding loans in portfolio and retaining all the risk.

Mortgage market observers say they are seeing a gradually building struggle by the Federal Housing Finance Agency to maintain its precarious balance between the FHFA’s congressionally-mandated roles as conservator to the GSEs and – indirectly – regulator of 65 percent of the mortgage market. Industry interests, meanwhile, continue to call for greater “transparency” surrounding Fannie Mae- and Freddie Mac-related decision making. Under the Housing and Economic Recovery Act of 2008, the FHFA was created to succeed the Office of Federal Housing Enterprise Oversight as regulator to Fannie and Freddie as well as the 12 Federal Home Loan Banks.

Proponents of creating a covered bond market in the U.S., as well as a potential competitor for the Federal Home Loan Bank System, are hopeful that Canada’s recent establishment of a covered bond legal framework will lend legislative momentum to push such a bill through Congress this year. A spokesman for Rep. Scott Garrett, R-NJ, told Inside The GSEs this week that the chairman of the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises will re-file his bill, the U.S. Covered Bond Act, in the near future. “With the federal government backing over 90 percent of the mortgage market, we must seek creative ways to enable the private sector to provide additional mortgage, consumer, commercial, and other types of credit,” Garrett said in a statement. “I look forward to working with my colleagues in the House and Senate to ensure we pass covered bond legislation in the 113th Congress.”

The retreat of some large loan aggregators from the mortgage market has been a challenge for many small loan originators, but Federal Home Loan Bank officials say the Mortgage Partnership Financing Xtra program has gone a long way to pick up the slack. Through MPF Xtra, six FHLBanks provide member institutions an alternative for selling first mortgages that they originate that allows them to retain customer relationships without taking on interest rate and prepayment risk. The program is one of several options under the Mortgage Partnership Finance program, which is run and managed by the FHLBank of Chicago. Introduced in 1997, the MPF provided...