The fact that real estate law remains fundamentally local in nature fuels a dynamic that prevents a timely and cost-effective resolution to the nation’s foreclosure crisis: a nearly overwhelming deluge of state and local laws, rules and regulations. That’s one of the take-aways in the testimony that Alfred Pollard, general counsel of the Federal Housing Finance Agency, provided early this week before the House Committee on Oversight and Government Reform. “State and local officials have been very active in adding to or amending laws related to foreclosures or servicing of mortgages,” Pollard said...

Arizona. A former Countrywide loan officer, Paige Kinney, aka Jamie Lee Lawler, 43, of Phoenix, AZ, has been sentenced to 15 years in prison and ordered to pay $22 million in restitution by U.S. District Judge Neil Wake. According to court documents related to the first indictment she faced, Kinney played a leadership role in a $40 million mortgage fraud scheme that targeted Countrywide Home Loans and other lenders through the use of straw buyers and “cash back” accounts. According to her plea agreement on the second ...

Federal Housing Finance Agency.FHFA Office of Inspector General. FHFA’s Supervision of Freddie Mac’s Controls over Mortgage Servicing Contractors Faulted. The Federal Housing Finance Agency’s Office of Inspector General found some areas in which the Finance Agency could improve its supervision of Fannie Mae’s and Freddie Mac’s controls over its mortgage servicing contractors. “FHFA has not clearly defined its role regarding oversight of servicers, sufficiently coordinated with other federal banking agencies about risks ...

Senate Banking, Housing and Urban Affairs Committee member Jerry Moran, R-KS, and Sen. Joe Manchin, D-WV, recently introduced the industry-supported S. 2160, the Financial Institutions Examination Fairness and Reform Act, which would provide critical balance and additional transparency to decisions the regulatory agencies make in the examination process. S. 2160, like its counterpart in the House, H.R. 3461, would, among other things, require more timely examination reports; more information about the facts the agency relied upon to make its exam decisions; and more precise ...

By the end of 2012, the Federal Housing Finance Agency will see a plan for a new mortgage securitization platform as a key component in its strategic plan for the conservatorships of the two government-sponsored enterprises, even as analysts warn that transferring credit risk from the GSEs to private investors is fraught with hazard. Late last week, the FHFA unveiled a new “conservatorship scorecard” that provides more details about the agency’s revamped strategic plan for a post-Fannie and Freddie secondary market. “It’s important to see the scorecard itself as further evidence of our commitment to the work...

Even though approximately $10.0 billion in non-agency representation and warranty payouts have already been included in proposed or completed settlements, another $34.0 billion in payouts are probably waiting in the wings, with Bank of America and JPMorgan facing the largest exposure by far, according to analysts at Barclays Capital. “Total payouts to non-agency investors from rep and warranty related recoveries will be $26.0 billion to $52.0 billion, using the $8.5 billion Countrywide settlement deal as a template. This corresponds to an average of 3-6 points of recoveries on non-agency securities...

Many non-agency MBS investors are upset with the $25 billion servicing settlement involving 49 state attorneys general, eight federal agencies and the nation’s five largest servicers, the full terms of which were filed in U.S. District Court this week. Bank of America, Wells Fargo, JPMorgan Chase, Citigroup and Ally Financial will receive some credit for modifying loans they service but do not own, although several of these firms have indicated that they plan to focus their efforts on portfolio loans. The Association of Mortgage Investors said the settlement establishes a precedent under which the bad debts of...

More than half of the government-sponsored enterprises’ single-family guarantee book of business during the fourth quarter of 2011 consisted of loans it had purchased or guaranteed since the start of 2009, which has prompted Fannie Mae and Freddie Mac to declare the companies’ efforts to reduce the credit losses on their legacy books of business a success so far. Freddie reported $619 million in net income during the fourth quarter, compared to a net loss of $4.4 billion during the third quarter. For the full year, the GSE reported a net loss of $5.3 billion compared to a net loss of...(Includes one data chart)

The non-agency MBS market showed some spark as always-performing loans continued to improve in February and more nonperforming loans moved to the re-performing bucket, according to Amherst Securities Group’s latest analysis of the mortgage market. In its February report, Amherst said first-time defaults from the always-performing bucket dropped to 0.75 percent during the month from 0.82 percent in January. In dollar terms, new defaults constituted $4.0 billion, down from $4.4 billion the previous month, the firm reported. On a year-over-year basis, always-performing loans were down to $525.6 billion from...

The Depository Trust & Clearing Corp. announced this week that its Fixed Income Clearing Corp. subsidiary will begin functioning as a new central counterparty, or CCP, designed to reduce risk and costs in the $100-trillion-a-year market for U.S. MBS, starting in April, following the Securities and Exchange Commission’s approval of the proposal. Company officials say the CCP will guarantee settlement of all matched MBS trades, which industry representatives see as a crucial step for the securities industry where the settlement of an MBS trade often does not take place until months after the trade itself was made...