A proposal from the Financial Accounting Standards Board that would impact accounting for mortgage servicing rights is getting support from industry trade groups. In August, FASB issued proposed accounting standards covering derivative contract novations on existing hedge-accounting relationships. A task force at the accounting standard setter had found that guidance in generally accepted accounting principles wasn’t explicit on the effect of a ...
An independent dispute resolution program for resolving loan defects is currently in the works to determine if there was a violation in loan eligibility or not in loans sold to Fannie and Freddie. The Federal Housing Finance Agency said to expect further clarity on the IDR in fiscal year 2016. According to its annual performance plan release last week, Fannie Mae and Freddie Mac are expected to deliver a report on the results of the IDR pilots. The FHFA said that over the next 12 months, it will complete an evaluation of the pilots being tested for resolving disputes over alleged defects. It will also make a decision on whether or not to extend the pilot to additional...
Mortgage lenders have entered a new, unfamiliar zone of regulation with the TILA-RESPA Integrated Disclosure (TRID) rule, which became effective on Oct. 3. The Stratmor Group, a mortgage consulting firm, said reaching out to borrowers prior to loan closing increases borrower satisfaction significantly, which regulators may view as a positive indicator of good-faith efforts to comply with the complex new rule. “One aspect of TRID compliance is making sure that the customer ...
Rental demand coupled with favorable demographic trends in most major markets has Freddie Mac predicting that the multifamily market will remain strong, at least for several more years, according to an outlook report released this week. Despite a large amount of new multifamily units entering the market this year, and a rise in construction permits, Freddie said the sector remains robust. The supply of multifamily properties has reached the highest level of completions in 2015 since the 1980s. Freddie said that demand has kept pace with new supply, calming concerns that growth might start to decelerate. The sector is in its sixth consecutive year of robust growth. Steve Guggenmos, senior director of Freddie’s multifamily investments and research, said...
Despite the uncertainty over marketing services agreements caused by Consumer Financial Protection Bureau enforcement actions, MSAs are still legal and viable, as long as they are properly ordered, according to industry experts at Lenders Compliance Group, a consulting firm in Long Beach, NY. During a webinar this week, three compliance pros at the firm delved into the first big splash the CFPB made on the MSA front, its Sept. 25, 2014, consent order with ...
Sellers/servicers of Fannie Mae and Freddie Mac will get a reprieve from immediately meeting the technical requirements associated with the Truth in Lending Act Real Estate Settlement Procedures Act Integrated Mortgage Disclosure Rule that took effect Oct. 3. Just a few days after the rule went into effect both GSEs issued guidance intended to reach anyone concerned about quality- control reviews while lenders absorb TRID into their business routines, said Brad German, spokesman for Freddie. The letter noted that in recognition of some seller/ servicers continuing to work toward implementing technical requirements of the rule, the GSEs won’t conduct routine post-purchase loan file reviews for technical compliance. After a transitional period, however, they will consider whether to begin such reviews for technical compliance.
After a long, steady decline in their combined market share, the top five sellers of home mortgages to Fannie Mae and Freddie Mac posted a modest increase during the third quarter of 2015. The top five sellers delivered $67.66 billion of loans to the two government-sponsored enterprises during the period for a 30.3 percent share of the market, according to a new Inside Mortgage Trends analysis. That was up from 29.8 percent in the second quarter and ... [Includes two data charts]
Reforming Fannie Mae and Freddie Mac is likely not in the cards for this Congress. Speaking at a housing finance forum sponsored by the Bipartisan Policy Center in Washington this week, Sen. Bob Corker, R-TN, said he doesn’t expect any changes over the short term. “It’s going to be a while. It’s not going to happen over the next year and four months,” he said. “Both sides don’t want to address a tough issue.” The Republican from Tennessee added that lawmakers from both sides of the aisle are avoiding the issue. Sen. Mark Warner, D-VA, also speaking at the event, said while there may not be any legislation in the near future, he’s hopeful for some type of incremental movement.
Fannie Mae and Freddie Mac released a new policy this week in hopes of providing clarity on correcting loan origination defects and solutions to the mortgage buybacks that have plagued lenders over the years. Based on input from lenders, the GSEs took the next step to lessen loan buyback risk and will now categorize defects in terms of “findings, price-adjusted loans, and significant defects.” Under the new “origination defects and remedies framework,” findings will not require a correction or a remedy from the seller as they are negligible defects that had no effect on whether the loan was acceptable to Fannie or Freddie. Those mortgages with one or more defects that are labeled price-adjusted loans would have been eligible for sale to the GSEs if...
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