A look at stories across HousingWire’s weekend desk…with more coverage to come on bigger issues:

The United States cannot afford the indefinite de facto nationalization of housing finance through its conservatorship of government-sponsored enterprises Fannie Mae ($0.00 0%) and Freddie Mac ($0.00 0%), The Washington Post wrote in an editorial Sunday.

“[C]onservatorship was intended as a 'timeout' during which policymakers could reinvent the entities. With an election year upon us, that timeout is looking more and more like a cop-out,” the unsigned editorial said. “This is alarming. The Fannie-Freddie business model — 'government-sponsored enterprises' (GSEs) with private shareholders but a public purpose, promoting homeownership — is a proven loser.”

The editorial argues the $111bn in mortgage losses covered by the Treasury Department was justifiable as an emergency measure to keep the housing market from collapsing entirely. But with continued losses projected in 2011 and 2012, covering the GSEs in perpetuity would cost more than $1.6trn, on top of the national debt of $12.3trn.

The editorial said changing the model for housing finance will provoke resistance from industry players, but that shouldn’t deter reform efforts.

“Congress and the Obama administration need to set clear, consistent and sustainable limits on federal support for mortgage finance, and the sooner the better,” the editorial said.

On Friday, JP Morgan Chase ($37.61 -0.25%) and Goldman Sachs ($114.12 -1.76%) announced bonus packages for its CEOs.

Jamie Dimon, JP Morgan’s chairman and CEO, received a bonus package valued at approximately $17m, including $8m in restricted stock, half of which vests on Jan. 13, 2012 and the remaining half on the same date in 2013. The rest of the package includes stock options for 563,562 shares of JPMorgan stock. Dimon, who received a $27.8m cash bonus for 2007, reportedly won’t get any cash for the second straight year.

Goldman awarded its chairman and CEO, Lloyd Blankfein, 58,381 shares of restricted stock, currently valued at approximately $9m. The pool of shares vests one-third at a time over the next three years, beginning in January 2011, but can’t be sold until January 2015. Blankfein didn’t receive a bonus for 2008, but received a $67.9m cash bonus for 2007.

The shift to stock-only bonuses comes after critics, including the Obama administration, alleged Wall Street firms did not learn anything from the financial crisis and are reverting back to old practices that led to the crisis to begin with.

The trend has sparked a unique marketing campaign, though. The New York City location of the Smith & Wollensky steakhouse took out a full-page ad in The New York Times Wednesday offering to trade steaks for diners' stock certificates, touting the plan as a way to inject the bonuses into New York City's economy, Reuters reports.

When the mortgage finance market is hit with a higher rate and a wider spread environment, many banks won’t be prepared for the effect it may have on securities portfolios, Barclays Capital ($14.82 0.225%) analyst Matthew Seltzer said in the firm’s latest “Securitized Products Weekly” report.

But, there are a number of different solutions available to banks that want to more strategically or defensively prepay their portfolios, Seltzer wrote. Specifically, he said, changing asset allocations and hedging strategies can be easy to implement and very effective.

The Federal Reserve’s anticipated exit from the mortgage-backed securities (MBS) market will likely lead to higher interest rates and mortgage spreads could also face widening pressure, but Seltzer writes many US banks are probably not well positioned for this type of environment. To handle the change, Seltzer said

Floaters — typically bonds with a coupon rate that changes with the change in short term interest rates — can reduce portfolio duration, Seltzer said. In addition, guaranteed final maturity bonds have a much shorter amortization, compared to traditional 30-year pass-throughs and collateralized mortgage obligations (CMOs) and extend much less in a sell-off.

The Minnesota Department of Commerce closed Hancock, Minn.-based 1st American State Bank of Minnesota. It was the only failed bank last week, bringing the 2010 total to 16. The two 1st American State Bank branches reopened as branches of Ogema, Minn.-based Community Development Bank, FSB under a purchase and assumption agreement with the Federal Deposit Insurance Corp. (FDIC).

Community Development Bank did not pay a premium to assume all of 1st American’s $16.3m in deposits and will purchase “essentially all” of of the failed bank's $18.2m in assets. The expected cost to the FDIC Deposit Insurance Fund (DIF) will be $3.1m.

Write to Austin Kilgore.

The author held no relevant investments.