Witnesses offered testimony to the subcommittee that senior HUD employees violated federal employment law practices as well as HUD policies by hiring Debra Gross, a former registered lobbyist, for a position with HUD's Office of Public and Indian Housing.

The refinance boom may be losing steam, but near-record low mortgage rates encouraged more borrowers to refinance in Q4, according to Freddie Mac's 2014 Q4 Refinance Report released Wednesday. Mortgagors who refinanced their loans in 2014 are projected to save on net a total of about $5 billion in interest over the next year, according to the report.

Bank of America was ordered to pay a $1.27 billion penalty in July 2014 as a result of its alleged role in the "Hustle" case. The bank had been fighting to overturn that verdict since, claiming that the HSSL program ended prior to its acquisition of Countrywide.

December's compound annualized rate decline of 26.4 percent for the gross mortgage portfolio was the eighth-highest rate for any one month since the Federal Housing Finance Agency's conservatorship of Fannie Mae began in September 2008. The highest rate of decline occurred in January 2010, when it dropped by 44.8 percent.

The Department of Justice sued S&P in February 2013, alleging that the credit ratings agency "knowingly and with the intent to defraud, devised, participated in, and executed a scheme to defraud investors" in collateralized debt obligations and residential mortgage-backed securities between 2004 and 2007.

The proposed requirements include minimums for net worth, capital ratio, and liquidity criteria that must be met by servicers and sellers to do business with the GSEs.

The mortgage portfolio expanded by 4.5 percent—an increase of $7.14 billion—up to an estimated $1.91 trillion in December. It was the highest annualized growth rate for any one month seen in Freddie Mac's portfolio since December 2009, when it grew by 5.7 percent.

The recent hot spots for flipping include California and parts of the South, according to Trulia. Six of the top 10 metro areas where flips represented the highest share of home sales were located in California, two were in Tennessee (Nashville and Knoxville), and Florida (Fort Lauderdale) and Massachusetts (Cambridge-Newton-Framingham) had one each in the top 10.

Judge Margaret Sweeney denied the government's attempt to stay court proceedings in the case, gaining a victory for Fairholme Funds and its CEO, Bruce Berkowitz, who sued the government in 2013 over the sweeping of GSE profits into the U.S. Department of Treasury.

Watt was testifying before Congress for the second time since becoming director of FHFA a year ago, this time to give an update on the government's conservatorship of Fannie Mae and Freddie Mac.