A wind-down of Fannie Mae and Freddie Mac would have cataclysmic consequences for the housing market, prominent observers have warned. Others point to the many countries that manage to fund mortgages without such institutions as proof that the government-sponsored entities are expendable. American Banker editors discuss the prospects for reducing their roles in housing finance and the obstacles a pullback would face.

Fidelity National Financial dominates mortgage underwriting. Its former LPS unit is the top mortgage servicer. The question is whether two companies that have run out of room to grow separately can prosper together.

Mortgage processor Lender Processing Services is reportedly in talks to be acquired by title insurer Fidelity National Financial and private equity firm Thomas H. Lee Partners in a $2.9 billion deal.

Sales of previously owned homes edged up 0.6% in April from the month prior and there was a noticeable increase in homes coming on the market.

Flagstar Bancorp, the Michigan lender rescued by MatlinPatterson Global Advisers in 2009, is considering a sale of the collection rights on more than $70 billion in mortgages, people with knowledge of the matter said.

The most effective housing reform would let the GSEs do what they do best: act as a conduit for private capital to enter the residential lending market.

Wells Fargo CEO John Stumpf said that he believes the government-sponsored enterprises need to be retained in some form because the guarantee they provide is important to investors.

As much as David Fiderer and others try to defend the GSEs and the policies that drove them into insolvency, the taxpayers who bailed them out are unlikely to be fooled.

The rift involves a disagreement over how aggressively to enforce servicing standards contained in the multi-state mortgage settlement.

Banks and Thrifts with the Largest Portfolios of Home Equity Loans On Sept. 30, 2012. Dollars in thousandsPublished May 21, 2013 Rank Type ofinstitutionHome equity loansHome equity loans (year earlier)Change intotal HE loansTotal loansand leases TotalClosed-endLines of creditTotalClosed-endLines of credit 1 Bank of America Corp. Charlotte, N.C. BHC $109,036,710 $13,979,795 $95,056,915 $122,209,224 $18,736,441 $103,472,783 -10.8% $945,196,287 2 Wells Fargo & Co. San Francisco BHC 100,432,000 11,152,000 89,280,000 109,556,000 13,948,000 95,608,000 -8.3 833,265,000 3 JPMorgan Chase & Co. New York BHC 86,252,000 6,432,000 79,820,000 97,046,000 8,354,000 88,692,000 -11.1 742,560,000 4 Citigroup Inc. New York BHC 39,595,000 14,031,000 25,564,000 45,731,000 17,781,000 27,950,000 -13.4 674,489,000 5 PNC Financial Services Group Inc. Pittsburgh BHC 29,052,173 5,038,885 24,013,288 29,254,351 6,577,826 22,676,525 -0.7 184,871,518 6 RBS Citizens Financial Group Inc. Providence, R.I. foreign BHC 21,916,542 4,156,168 17,760,374 23,001,465 5,414,484 17,586,981 -4.7 87,560,511 7 U.S. Bancorp Minneapolis BHC 17,917,000 1,797,000 16,120,000 19,288,000 2,217,000 17,071,000 -7.1 226,490,000 8 SunTrust Banks Inc. Atlanta BHC 16,479,139 2,793,065 13,686,074 17,811,034 3,331,616 14,479,418 -7.5 127,048,658 9 Regions Financial Corp. Birmingham, Ala. BHC 11,325,920 517,637 10,808,283 12,541,474 636,386 11,905,088 -9.7 76,523,641 10 Fifth…

The Federal Housing Finance Agency should require the government-sponsored enterprises to purchase loans with "deeper levels of credit enhancement (via mortgage insurance, lender recourse or capital market investors) in exchange for bona fide reductions in guarantee fees and other loan level charges," the Mortgage Bankers Association said in a new white paper released Monday.

CEO Michael Corbat continues to reorganize his top ranks, giving new responsibilities to private bank CEO Jane Fraser.

New York Attorney General Eric Schneiderman is revising his allegations of foreclosure settlement violations by Wells Fargo and Bank of America, resetting the clock on his plans to sue the banks over 339 alleged servicing violations.

A recap of the informed opinions (and the discussions they generated) on BankThink this week.