In a move that could potentially prolong already protracted litigation, a U.S. District Court judge in New York ruled last week that a proposed $8.5 billion settlement over Bank of America’s non-agency mortgage-backed securities belongs in federal and not state court.Judge William Pauley denied a motion by the Bank of New York Mellon to move the lawsuit filed by BofA Countrywide non-agency MBS investors back to New York State Supreme Court. Eleven entities sharing the name Walnut Place petitioned for the federal court venue, claiming the case’s size and complexity qualified it for a “mass action.” Judge Pauley agreed.

Any changes that would restrict membership or narrow the Federal Home Loan Banks’ mission should come first from Congress not by administrative fiat, Bank officials told House members this week.FHLBank of Dallas Chairman Lee Gibson testified before the House Financial Services Subcommittee on Oversight and Investigations that explicit Congressional guidance is both necessary and proper before any fundamental alteration of the FHLBank system is imposed.

The Federal Home Loan Bank of Chicago’s long awaited capital stock conversion plan has received the thumbs up from the Federal Housing Finance Agency, moving the Bank a giant step toward regaining equal footing with its fellow FHLBanks.

Ginnie Mae is following its own path in exploring potential changes to servicer compensation, a project that parallels the Federal Housing Finance Agency’s Joint Initiative on Fannie Mae/Freddie Mac servicing compensation. As part of the FHA’s effort to improve default servicing, Ginnie Mae and other government housing agencies will be working separately to develop better claims mechanisms and pooling services as well as clearer risk and warranty delineations to improve the value of securitizations, the FHFA said. In a discussion paper, the FHFA, which oversees Fannie Mae, Freddie Mac and the Federal Home Loan Banks, said ...

The use of Federal Home Loan Bank advances by banks and thrifts continued to fall during the second quarter of 2011, with one top-three bank moving up a notch due to increased advance use on a year-over-year basis, according to the Inside Mortgage Finance Bank Mortgage Database.Banks and thrifts reported using a combined $341.1 billion in advances as of June 30, 2011, down 4.7 percent from the first quarter of 2011 and off 23.4 percent from the same period a year earlier.

Fannie Mae and Freddie Mac mortgage-backed securities continued to be the preferred investment option for the Federal Home Loan Banks during the second quarter of 2011 with only a paltry decrease from the previous quarter, according to a new analysis and ranking by Inside The GSEs based on data provided by the Federal Housing Finance Agency.Ginnie Mae securities, meanwhile, continued to grow in popularity within the FHLBank system during the quarter.

The Federal Home Loan Bank system has requested that federal regulators clearly and unambiguously exempt the FHLBanks’ long-standing mortgage purchase programs from the government’s emerging risk-retention rule on securitization.In comments submitted to regulators last month on the interagency proposed rule, the 12 FHLBanks signed a joint letter to ensure the Banks’ Acquired Member Assets programs will be exempt under the final rule.

The Federal Housing Finance Agency needs to tweak its proposed eligibility certification form for prospective directors of the 12 Federal Home Loan Banks, according to comments received by the Finance Agency.

Debt issuance for Fannie Mae, Freddie Mac and the Federal Home Loan Banks rose during the second quarter of 2011, while Freddie recorded a decline in new debt during the April to June period.The GSEs collectively issued $726.2 billion in new debt during the second quarter, a 2.6 percent increase from the previous quarter, while GSE debt outstanding at $2.168 trillion declined 4.8 percent from the first quarter.

Several of the prudential management and operations standards recently proposed by the Federal Housing Finance Agency are “duplicative of, or conflict with, current regulatory requirements” and should be further refined before final issuance, according to a comment letter written by the 12 Federal Home Loan Banks.The FHLBanks suggest numerous and significant revisions or clarifications to the proposed rule the FHFA issued in June.