A federal employee union and the Department of Housing and Urban Development have agreed to implement a seven-day employee furlough because of a severe mandatory reduction in HUD’s budget in FY 2013. The seven furlough days, which also will affect FHA operations, will apply to HUD’s entire 9,100-person work force and will be spread out to one for each pay period beginning May 24. HUD initially proposed a 13-day furlough plan, which was to start May 10, but agreed to reduce it to seven days and to move the start date to May 24. Under an agreement between HUD and the American Federation of Government Employees Council 222, furlough days will occur on ...

The Internal Revenue Service is preparing to launch an industry-wide review of housing counseling agencies, including those approved by the Department of Housing and Urban Development, as well as other tax-exempt entities that provide mortgage foreclosure assistance, compliance experts warned. In fact, the IRS has started looking at providers that have applied for tax-exempt status in recent months and has denied three organizations in February 2013 alone, according to attorneys with the Washington, DC, law firm Venable. Housing counseling agencies can use the issues raised in the “private letter” rulings as a ...

The FHA’s subsidy rate for its single-family mortgage insurance program is expected to remain negative and adjust significantly in the coming years along with other guarantees of new residential mortgages, according to the Congressional Budget Office. The CBO’s baseline estimates show the subsidy rate for the FHA Mutual Mortgage Insurance Fund at negative 6.0 percent in 2013 and eventually dropping to negative 1.2 percent in 2023, in line with a parallel decline in FHA’s share of loans with guarantees that will drop from 13.0 percent to 7.5 percent over the 10-year period. According to the Department of Housing and Urban Development’s FY 2012 third-quarter report to Congress, the FHA subsidy rate changed ...

Two differing notions have emerged during a recent hearing in the House Financial Services Subcommittee on Housing and Insurance regarding the rapidly changing relationship between private mortgage insurance and the FHA single-family mortgage insurance program. One view is that FHA’s existing policies either ignore or violate basic regulatory principles and continue to crowd out private capital. Compared to state-regulated private MIs, the FHA has far less stringent standards and enforcement from a regulatory perspective has been disappointing. Proponents of this view say that ...

Nationstar Mortgage and Walter Investment Management have focused most of their recent efforts on acquiring agency mortgages and increasing originations of such loans. The shift is due to increased competition for nonperforming mortgages along with the small amount of non-agency mortgages originated since 2008. In January, Walter acquired Fannie Mae mortgage servicing rights with an unpaid principal balance of $128.0 billion from Bank of America and Residential Capital. The servicer said it is handling ...

A federal judge this week tentatively dismissed most of the claims the National Credit Union Administration filed against Goldman Sachs regarding non-agency mortgage-backed securities. U.S. District Judge George Wu determined that the NCUA’s complaint was untimely unless the federal regulator could prove otherwise, according to an analysis by the Credit Union National Association. The Consumer Financial Protection Bureau published a preliminary list of counties exempt – in certain circumstances ... [Includes two briefs]

Chimera Investment made progress toward resolving its non-agency mortgage-backed security-related accounting problems last week by filing its annual report – for 2011. The real estate investment trust had plans to issue non-agency MBS but those efforts have stalled as Chimera deals with its accounting issues. The annual report for 2011 included a restatement of Chimera’s financial condition as of the end of 2010 as well as restatements for consolidated statements of cash flows for 2009 and 2010 ...

Members of Congress remain divided on the ability of the non-agency market to sufficiently take over some or all of the housing finance functions currently supported by the government-sponsored enterprises. While Republicans are in favor of a significant expansion of the non-agency market, Democrats are calling for some sort of government guaranty for the mortgage market. “Simply put, much of the private market has not been able to re-enter the market and compete with the federal government,” said ...

Nonprime industry veteran Jon Daurio said he has lined up “soft” commitments of roughly $100 million to start a new non-agency mortgage banking firm. Daurio told Inside Nonconforming Markets that the “softness” or “hardness” of the commitments “is dependent on the final terms that I eventually negotiate with a lead investor.” He said the funding will come from private-equity sources. Daurio, who left Kondaur Capital about two years ago, said he could not comment further at this time. He has been ...

Redwood Trust continues to pump out strong non-agency jumbo mortgage-backed securities with originations from a number of lenders. The real estate investment trust’s latest MBS features lower credit enhancement levels and low loan-to-value ratios. The $576.4 million Sequoia Mortgage Trust 2013-4 issued this week received AAA ratings from Fitch Ratings, Kroll Bond Rating Agency and Moody’s Investors Service, with credit enhancement of 6.25 percent on the top-rated tranche. The first non-agency jumbo MBS Redwood ...