Secondary Market

The Federal Deposit Insurance Corp.(FDIC) is going after a list of financial institutions over mortgage securities sold to the now defunct Colonial Bank. According to the complaint, the defendants - which include JPMorgan Chase, CitiMortgage, and Wells Fargo - made untrue statements or omitted important information when selling securities to Colonial. The suit is over $388 million in securities Colonial purchased from the defendants.

Following Tuesday's news that Freddie Mac will not require a draw from Treasury this quarter, Fannie Mae announced the same on Wednesday in its second quarter earnings report. This is the second consecutive quarter that the GSE has not required a draw from Treasury. Before this year, Fannie May required a draw from Treasury for the previous 11 consecutive quarters. The GSE reported a net worth of $2.8 billion with comprehensive income in the second quarter reaching $5.4 billion. This is up from $2.9 billion in the first quarter of this year.

Things are looking up at Freddie Mac. As of the end of the second quarter, Freddie Mac had a positive net worth and reported it will not require a draw from Treasury this quarter. At the end of June, the GSE had $1.1 billion in net worth. The new net worth is the result of $2.9 billion in comprehensive income during the second quarter. About $1.8 billion was paid to Treasury as dividends on 10 percent preferred stock. Freddie Mac's net income of $3.0 billion in the second quarter is a jump from the $577 million recorded in the first quarter.

LenderLive Network Inc. announced Tuesday that it has received approval as a Fannie Mae and Freddie Mac servicer, making it eligible to service loans for the two GSEs.

Fannie Mae released its July 2012 National Housing Survey Tuesday, showing that consumer optimism regarding the slowly recovering housing market remained strong during the month. Survey respondents said they expect home prices to increase 1.7 percent in the next year, slightly down from the 2.0 percent survey high recorded in June. Eleven percent of respondents believe home prices will drop, the lowest level recorded since the survey began in June 2010.

MountainView Servicing Group announced Monday that it completed the sale of three bulk packages of mortgage servicing rights for Fannie Mae loans. The Denver-based subsidiary of MountainView Capital Holdings completed the sale on July 31.

Commercial banks eased standards for residential mortgage loans to meet a sharp increase in demand in the second quarter, the Federal Reserve reported Monday in its quarterly survey of bank lending standards. According to the survey results, a net 52.5 percent of bank officers responding to the Senior Loan Officer Opinion Survey reported increased demand for traditional mortgage loans in the second quarter compared with a net 30.2 percent reporting stronger demand in the first quarter.

The Federal District Court in Kansas denied the most motions from defendants to dismiss the National Credit Union Administration (NCUA) lawsuits over losses from mortgage-backed securities purchased by U.S. Central Federal Credit Union. NCUA Board Chairman Debbie Matz commented on the decision and stating, NCUA is pleased that the court recognized the central merits of our complaints and allowed the cases to move forward.

In Hargrow v. Wells Fargo Bank N.A., a three-judge panel of the United States Court of Appeals for the Sixth Circuit rejected the plaintiffs' claims that Wells Fargo-an assignee of Mortgage Electronic Registration Systems, Inc. (MERS)-was not entitled to foreclose because it did not own an interest in the indebtedness.

Court of Appeals Upholds Dismissal in MERS Case MERSCORP Holdings, Inc., announced that a three-judge panel of the United States Court of Appeals for the Ninth Circuit affirmed the dismissal of a complaint against Mortgage Electronic Registration Systems, Inc., (MERS) and two other defendants.