Industry groups are lukewarm but supportive overall of the Federal Housing Finance Agency’s efforts to modernize Fannie Mae’s and Freddie Mac’s securitization process but they remain concerned about changing servicing models, according to comment letters submitted to the agency. In September, the FHFA in a white paper proposed a framework for both a common securitization platform and a model pooling and servicing agreement with a request for public comment. The proposed infrastructure has “two complementary goals” – to replace the outmoded proprietary infrastructures of the GSEs with a common, more efficient model and to establish a framework that’s consistent with multiple states of housing finance reform, including greater participation of private capital in assuming credit risk.
The federal judge in charge of overseeing the multiple lawsuits filed by the Federal Housing Finance Agency against non-agency mortgage-backed securities issuers for allegedly misrepresenting deals that were sold to Fannie Mae and Freddie Mac rebuffed yet another motion by the banks to curtail the suits. Last week, Judge Denise Cote of the U.S. District Court for the Southern District of Manhattan rejected a motion to exclude an expert report describing the Finance Agency’s proposed…
MGIC Investment Corp. announced it has met all its obligations to Freddie Mac, formally putting an end to the mortgage insurer’s dispute with the GSE over pool MI coverage. MGIC Investment Corp. this week transferred $100 million to its subsidiary, Mortgage Guaranty Insurance Corporation to maintain approval from Freddie to sell coverage as part of the overall $267.6 million settlement agreement. All other conditions by Freddie to continue the GSE’s approval of MGIC Indemnity Corp. (MIC) as a limited mortgage insurer are satisfied through Dec. 31, 2013, according to MGIC Chairman and CEO Curt Culver.
Mortgage lenders saw a welcome decline in the volume of repurchases and indemnifications they had to make during the third quarter, but a new analysis of two major databases by Inside Mortgage Trends reveals that the industry made little progress in resolving the massive overhang of disputes involving loans from the depth of the housing crisis. According to bank call reports, repurchases and indemnifications declined by 21.6 percent from the second to the third quarter ... [Includes 3 data charts]
The average mortgage banking firm reported a hefty $4.12 million net profit during the third quarter of 2012, up 40.4 percent from already high earnings in the previous quarter, according to the Mortgage Bankers Association’s performance report. Although the MBA survey group – 311 companies in the latest report – varies somewhat from period to period, the third quarter earnings represent a windfall in profits that mirrors the results reported by large public companies and financial institutions ...
Government regulations and compliance changes are making it difficult for mortgage professionals to do business in the current environment, while outdated technology and manual processes are impeding the workflow, according to a new Genpact study. Faced with new regulations and a slow housing recovery, the mortgage marketplace badly needs new technology solutions and improved business processes, said the study, which was compiled for Genpact Limited, a provider of ...
The Mortgage Bankers Association said it largely supports accounting changes that would impact holdings of mortgage-backed securities. Under a proposal by the Financial Accounting Standards Board, there would be no change in measurement for reporting entities that carry certain assets and liabilities at amortized cost. The MBA said the update proposed by FASB in October would require certain changes to the measurement of assets and liabilities of securitizations that a reporting entity is required ...
Lenders and servicers will benefit from improved borrower performance as home prices continue to climb, according to industry analysts. Home prices are expected to continue to improve through 2013, although there are some concerns about the impact of negotiations in Congress relating to the fiscal cliff. Home prices nationwide, including distressed sales, increased on a year-over-year basis by 6.3 percent in October 2012, according to CoreLogic. The firm noted that home prices have now increased ...
Upcoming changes from the Internal Revenue Service will allow for a completely paperless mortgage application process, according to industry participants. Beginning Jan. 7, the IRS will allow electronic signatures for IRS Form 4506-T, request for transcript of tax return. The electronic signatures will be allowed for tax transcripts ordered through the IRS Income Verification Express Services. “The requirement of a manual signature on the IRS 4506-T was the last significant impediment to a truly ...
Panelists with opposing views of the FHA this week supported raising the single-family mortgage insurance program’s minimum credit score to keep borrowers with questionable credit quality out and help preserve the high quality of FHA’s newer books of business. Despite their disagreements over whether the FHA will ultimately need a taxpayer bailout, participants in a policy forum hosted by the Cato Institute called for reforms to reduce government presence in the mortgage market and help the FHA to avoid ...
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