Congress is making an important start on GSE reform but a final, tangible product may not come to fruition for several more years, according to Capitol Hill insiders. Speaking at the Mortgage Bankers Association’s annual convention in Washington, DC, last week, former House Financial Services Committee Senior Counsel Michael Borden and former Senate Banking, Housing and Urban Affairs Committee Staff Director Dwight Fettig agreed it’s a virtual certainty that a final reform bill will not materialize during the 113th Congress.

Servicers working for Fannie Mae and Freddie Mac are now prohibited from being reimbursed altogether for expenses associated with lender-placed insurance practices, the Federal Housing Finance Agency announced this week. The FHFA’s action follows a notice the agency published in March calling for seller/servicers to be prohibited from accepting sales commissions or fees related to lender-placed or force-placed insurance where a conflict exists between them and the insurance providers and their affiliates.

The top Democrat on the House Financial Services Committee said that she and other members on the panel are drafting “an alternative approach” to improve upon the existing housing-finance reform proposals currently circulating in both chambers of Congress. Rep. Maxine Waters, D-CA, noted during a speech at a Bipartisan Policy Center Housing Commission Policy Forum this week that the proposal in progress would encompass the set of principles House Democrats issued in July “with a particular emphasis on preserving an affordable 30-year, fixed rate mortgage.”

The bipartisan Senate blueprint for secondary mortgage market reform includes several key provisions designed to facilitate small-lender access when Fannie Mae and Freddie Mac are no longer around.

The mortgage slowdown will separate the men from the boys, the girls from the ladies. It's time to fire all underperforming loan officers, says mortgage consultant David Lykken.

There was no surprise about why. Fannie Mae, Freddie Mac and Ginnie Mae securitized a total of $41.71 billion of refinance loans in October, down 22 percent from the previous month.

Glenn Costello, a senior managing director at KBRA, said the securitization of non-QM loans will require additional credit enhancement relative to QMs.

If a residential loan officer isn't doing at least six units per month, should he (or she) be fired?

U.S. Bank, as trustee for a mortgage loan trust, has sued Citigroup in New York state court to force the financial giant to cure or repurchase defective loans from a securitized pool. In a separate case, a federal court in New York dismissed a shareholder action against Citigroup in connection with certain residential MBS. At issue in the first case is a pool of 4,792 mortgage loans that Citigroup Global Markets Realty Corp. purchased and securitized in May 2007. Citigroup sold the loans to Citigroup Mortgage Loan Trust, which, in turn, deposited the loans into the trust and assigned its rights to U.S. Bank. The trust then issued the MBS. According to the court summons and notice, Citigroup conducted...

The risk-retention rule re-proposed by federal regulators in September needs significant adjustments, according to issuers of collateralized loan obligations and asset-backed commercial paper. Investors are largely happy with the re-proposed rule, and issuers concede that the re-proposed rule significantly improved on the rule initially proposed by federal regulators in 2011. The Dodd-Frank Act requires federal regulators to establish risk-retention requirements for certain securities that don’t meet qualifying standards. Issuers of such securities will generally be required to retain at least 5.0 percent of the risk from such issuance. “We remain concerned...