The chief of enforcement at the Securities and Exchange Commission took issue with a U.S. District Court judges rejection this week of the agencys proposed $285 million settlement with Citigroup over a collateralized debt obligation backed by MBS that went sour, and defended the deal as the best available course of action, given the restrictions under current law. Robert Khuzami, director of the SECs Division of Enforcement, responded to a ruling announced early this week by U.S. District Court Judge Jed Rakoff in Manhattan in which the judge rejected the multi-million-dollar...
Most bond dealers expect the Federal Reserve to begin buying a substantial volume of MBS in an effort to stimulate an anemic economy, according to the results of a Bloomberg News survey of bond dealers. They project that the Fed could buy as much as $800 billion of MBS in 2012. The Fed would not respond to requests for comment regarding this plan, but the purchasing of MBS may be a part of a new round of quantitative easing for the market. Fed analysts claim that the agencys first big MBS buying binge, between November 2008 and March 2010, helped push mortgage rates...
Whatever FHA relief the Department of Housing and Urban Development may offer as part of a pending settlement of foreclosure-related charges will not necessarily let mortgage servicers off the hook, said HUD Secretary Shaun Donovan.Donovan assured lawmakers during a House Financial Services Committee hearing this week that any offer of relief from any FHA liability in connection with ongoing robo-signing settlement talks would be in exchange for significant penalties and help to homeowners who were wronged by bad servicing practices. The HUD secretary neither confirmed nor denied the ...
A coalition of 34 industry trade and affordable housing groups, housing and community reinvestment advocates has endorsed the nomination of Carol Galante as the Department of Housing and Urban Developments deputy assistant secretary for housing and FHA commissioner.In a recent letter to both the chair and ranking minority member of the Senate Committee on Banking, Housing and Urban Affairs, the coalition voiced its strong support for Galante, who is currently serving in both positions on an acting basis. The coalition cited Galantes experience as well as her previous job as HUD assistant secretary for multifamily housing. Her backers also point to her 31-year experience in private real estate as president and chief executive of BRIDGE Housing, Californias largest nonprofit housing development corporation, and its affiliate companies. In particular, the coalition underscored ...
Private mortgage insurer PMI Group Inc. circled the wagons last week when it initiated voluntary Chapter 11 bankruptcy protection to protect stakeholders as state regulators move to appoint a receiver for the companys mortgage insurance unit. Headquartered in Walnut Creek, CA, but incorporated in Arizona, the Nov. 23 move to file for bankruptcy protection came one day after a Maricopa County judge rejected PMI Groups bid to overturn the Arizona Department of Insurances seizure of its main unit, PMI Mortgage Insurance Co., in October. As part of the process to...
The Office of the Comptroller of the Currency last week reported that 12 bank and thrift mortgage servicers are pressing ahead to comply with the foreclosure practices consent orders issued in April, but it will take all of next year to complete the necessary steps. Work is well under way on the actions necessary to comply with the consent orders, the OCC said in a report. Efforts to correct deficiencies in foreclosure processes, management oversight and internal audit are furthest advanced. To forward the process of identifying and providing remediation to...
The Federal Housing Finance Agencys Office of Inspector General is attempting to grow the Finance Agency and the OIG itself into a larger-than-necessary entity, and that is a questionable objective given Fannie Mae and Freddie Macs uncertain long-term future, the FHFA head told lawmakers last week.FHFA Acting Director Edward DeMarco, testifying before the Senate Banking, Housing and Urban Affairs Committee, noted the OIGs recurring conclusion in its recent reports that the FHFA is understaffed and that it should be more directly engaged day-to-day in the enterprises business activities. That would include independently repeating and validating Fannie and Freddies business decisions and calculations.
ABS issuers are scrambling to get a handle on complex new rules to mitigate conflicts of interest in the structured finance market that are being developed by the Securities and Exchange Commission and federal banking regulators. At the end of the day, well spend lots of time figuring out how to comply, said Bianca Russo, managing director and associate general counsel at JPMorgan Chase, during a seminar sponsored last week by the American Securitization Forum. Its going to be a challenge to comply, however the rules turn out. Complexity and consistency are...
A reduction to the Federal Home Loan Bank systems advance business and investment portfolio would diminish Bank profitability, resulting in a credit negative for U.S. commercial banks, according to a recent report by Moodys Investors Service. Limiting access to FHLBank funding would reduce alternative liquidity for U.S. banks, noted the Moodys report A Diminished Federal Home Loan Bank System Would Weaken U.S. Banks.
Unless Congress tackles the future of Fannie Mae, Freddie Mac and the government’s role, if any, in housing finance, expect the Federal Housing Finance Agency to continue to resolutely employ an increasingly imperfect and outdated conservatorship model to the GSEs, say industry observers. Several times while appearing last week before the Senate Banking, Housing and Urban Affairs Committee and the House Committee on Oversight and Government Reform, FHFA Acting Director Edward DeMarco pointedly urged lawmakers