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Th e M Rep o RT | 63 O r i g i nat i O n s e r v i c i n g a na ly t i c s s e c O n da r y m a r k e t SECONDARY MARKET LocaL edition Insurance Corporation and cre- ate a reinsurance fund designed to protect taxpayers from a repeat of the $188 billion Fannie/ Freddie bailout in 2008. What's complicating about the bill, Kolko says, is the fact that changing loan limits would mean hurting or helping some areas more than others, while leaving limits alone could render the whole system moot. "Lowering loan limits in spe- cific local markets would push more borrowers into the jumbo category, which ... means mort- gages that are more expensive and more difficult to get," Kolko said. "Raising the loan limit in high-cost areas would benefit borrowers in those areas but would increase the share of mortgages guaranteed or insured by the government." This, he said, "runs counter to a central goal of national hous- ing finance reform, which is to reduce the mortgage market's dependence on government." So what would happen if the conforming loan limits don't change, even as the housing finance system gets overhauled? The short answer is: irony. "By removing the implicit subsidy and therefore reducing the cost advantage to borrowers of conforming loans, the Johnson- Crapo bill and other housing reform proposals might end up making conforming loan limits largely a moot point," Kolko said. Still, even if Johnson-Crapo passes—which it might not, given the growing tide of opponents on all sides of the political fence who want to squash the measure as soon as possible—implemen- tation would be years in the future. "Until then," Kolko said, "the failure of conforming loan limits to reflect local housing differences is likely to get worse, not better." Freddie mac's Portfolio shrinks The GSe reporTS iTS faSTeST annualized decline So far ThiS year. Washington D.C // Freddie Mac's mortgage portfolio has declined in each of the first three months of this year with the fastest annualized decline in March, according to the GSE's latest monthly volume summary. Freddie's mortgage portfolio declined at an annualized rate of 2.9 percent in March. The last time the GSE's portfo- lio grew was in December, when it demonstrated an annualized growth rate of 0.4 percent. Over the first three months of this year, the average annual- ized growth rate for Freddie Mac's total mortgage portfolio is -2.3 percent, just slightly more accelerated than the -2.1 percent annual growth rate recorded for the year in 2013. At month-end, the portfolio was valued at $1.904 trillion. While the overall portfo- lio declined over the month, mortgage-related securities and other guarantee commitments ticked up slightly, posting a 0.1 percent annualized increase for the month. The unpaid balance of Freddie Mac's mortgage-related invest- ments fell $7.8 billion in March. Single-family refinance and guarantee volume made up just over half of Freddie Mac's single- family volume in March—coming in at $7.1 billion, or 51 percent. Based on unpaid principal vol- ume, relief refinances accounted for 31 percent of March's single- family refinance volume. New multifamily business in March totaled $1 billion, bring- ing the year-to-date total to $3 billion. Freddie Mac modified 5,964 loans in March and has modified 18,628 loans so far this year. Delinquencies among both single-family and multifam- ily mortgages in Freddie Mac's portfolio decreased in March. Freddie's single-family delinquen- cy rate stands at 2.2 percent, and its multifamily delinquency rate stands at 0.04 percent. FHFa settles with Barclays The aGreemenT iS The 13Th ouT of 18 SuiTS filed in 2011. Washington D.C // The Federal Housing Finance Agency (FHFA), acting as conservator for Fannie Mae and Freddie Mac, announced a settlement with Barclays Bank PLC for $280 million. The settlement resolves legal claims against the bank related to allegations of violations of federal and state securities laws in connection with private- label mortgage-backed securities purchased by the GSEs. The suit, FHFA v. Barclays Bank PLC, covers the period from 2005–2007 and falls under the FHFA's purview as conservator for the two companies. Barclays will pay $227 million to Freddie and $53 million to Fannie, according to the settlement. The settlement was cautious to note, "This agreement does not constitute an admission by any of the Barclays defendants of any liability or wrongdoing whatsoever, including, but not limited to, any liability or wrongdoing with respect to any of the allegations." "To the contrary, the Barclays defendants vigorously deny the allegations in the actions," the settlement said. The FHFA's settlement with Barclays is just a single point in a long line of legal actions taken against banks and other institutions on the heels of the financial crisis. This particular settlement represents the 13th settlement related to the 18 private-label securities lawsuits FHFA filed in 2011. Previous settlements include payments of $9.3 billion from Bank of America, $885 million from Credit Suisse, $122 million from Société Générale, and $1.25 billion from Morgan Stanley. All told, FHFA recovered nearly $8 billion from banking institutions in 2013.