A policy shift at the Securities and Exchange Commission requiring admission of guilt in certain cases may encourage wrongdoers in the securities market to litigate rather than settle, resulting in fewer SEC settlements, according to some compliance attorneys. Fear of possible criminal prosecution and the lasting impact of an admission of guilt could compel accused companies and individuals to take their cases to trial rather than negotiate a settlement, warned Philip Stein and Jeremy Sahn, partners in the Miami-based law firm of Bilzin Sumberg. Starting in June 2013, the SEC began requiring...
Losses incurred for rep-and-warrant claims tied to MBS could total $89 billion eventually. However, banks have already reserved $88 billion, according to some tallies.
Fannie Mae and Freddie Mac saw dramatic declines in the number of underwater mortgage refinances they acquired in the fourth quarter of 2013, according to a new Inside MBS & ABS analysis. Mortgage lenders delivered an estimated 103,878 Home Affordable Refinance Program loans to the two government-sponsored enterprises in the fourth quarter, down 49.0 percent from the previous period. Our estimate, based on loan-level MBS data, supplement Federal Housing Finance Agency figures that have been updated only through November. The final three months of last year produced...[Includes one data chart]
The lawsuit seeks to recover unspecified damages and penalties from the defendants for using fraudulent mortgage assignments and FHA endorsements to submit tens of thousands of false FHA claims from 2000 through 2010.
Ocwen Financial announced late last week that its planned purchase of mortgage servicing rights on a $39.2 billion portfolio of mortgages from Wells Fargo is on indefinite hold due to a request and scrutiny by the New York Department of Financial Services. Industry participants suggest that delays in servicing transfers due to third parties are common and the deal with Ocwen, which largely consists of mortgages in non-agency MBS, will be completed. Ocwen will continue to work closely with the NYDFS to resolve its concerns about Ocwens servicing portfolio growth, the servicer said. The NYDFS raised concerns that Ocwen doesnt have enough capacity to handle the significant portfolio growth experienced by the servicer in recent years. Certain nonbank servicers are getting...
Federal Reserve Chair Janet Yellen stuck close to the script of her predecessor on the subject of the Feds quantitative easing exit strategy during her first Humphrey-Hawkins appearance before Congress this week, reaffirming that the central banks pull-back from its asset-purchase program is likely to continue, barring a dramatic surprise. Let me emphasize that I expect a great deal of continuity in the Fed Open Market Committees approach to monetary policy, Yellen told the House Financial Services Committee on Tuesday. I served on the committee as we formulated our current policy strategy and I strongly support that strategy, which is designed to fulfill the Federal Reserves statutory mandate of maximum employment and price stability. The new Fed chief reminded...
Rising interest rates may help boost the fortunes of real estate investment trusts that focus on investing in residential MBS by increasing the value of their portfolios. Mortgage REITs had a rough year in 2013, as their stock prices declined an average 10 percent while the Standard & Poors Index rose 29 percent. It was thought that tapering by the Federal Reserve would cause rates to rise which they did for a short while but now the reverse has happened, thanks in large part to recent weak employment numbers. Late this week, the yield on the 10-year Treasury was...
Freddie Mac last week announced a $1 billion offering of its Structured Agency Credit Risk debt notes, the government-sponsored enterprises first risk-sharing transaction of 2014 and its third such deal since the company rolled out the STACR series last year. The deal is backed by a pool of $32.4 billion 30-year fixed-rate mortgages acquired by Freddie in the second quarter of 2013. More than 65 investors participated in Freddies latest STACR deal, and more than 20 of those investors were newcomers, according to Kevin Palmer, vice president of single-family strategic credit costing and structuring for Freddie. Weve introduced...
The nonprofit Wall Street advocacy group Better Markets filed a lawsuit against the Justice Department this week challenging DOJs authority to unilaterally enter into the unprecedented and historic $13 billion deal with JPMorgan Chase last fall. In November, DOJ announced the largest legal settlement on record with JPMorgan, which acknowledged making misrepresentations about billions of dollars in MBS sold to investors prior to Jan. 1, 2009. The settlement does not release bank employees from civil charges, nor does it release JPMorgan or any other individuals from criminal prosecution. However, in its complaint filed in the U.S. District Court for the District of Columbia, Better Markets claimed...