Surging streamline refinancing activity is helping boost FHA lending but the benefits of increased originations may be restricted to financial institutions that have the ability to retain servicing and are not dependent on selling FHA loans to larger banks, according to some lenders. Applications for government-insured refinance loans more than doubled last week as reduced mortgage insurance premiums for the FHA streamline refinances went into effect, according to the Mortgage Bankers Association’s latest survey of mortgage applications. The MBA’s government refinance index jumped from 4010 last week to...

The Federal Housing Finance Agency should address Fannie Mae and Freddie Mac’s representation and warranties repurchase demands with an eye toward making the two government-sponsored enterprises’ buyback policies more transparent, industry groups say. The volume of repurchase demands by the GSEs continues at “unprecedented levels” as Fannie and Freddie made nearly $100 billion in repurchase demands over the past three years, the Mortgage Bankers Association said in a comment letter on the FHFA’s strategy for GSE conservatorship. “MBA supports lender reps and warrants as an effective method of...

The Consumer Financial Protection Bureau has been able to identify a number of improvements it can make in a rulemaking that will merge the consumer mortgage disclosures required under the Truth in Lending Act and the Real Estate Settlement Procedures Act, thanks to input from a small business review panel it convened earlier this year. “During the small business review panel [process] and our other outreach, industry identified several areas in which the current rules create uncertainty about how to comply,” CFPB Deputy Director Raj Date said during a hearing of the House Financial Services Subcommittee on...

A number of mortgage lending and small business interest groups want the Consumer Financial Protection Bureau to use the extra time provided by re-opening the public comment process on the controversial ability-to-repay rulemaking to conduct a Small Business Advocacy Review panel and publish its recommendations when the agency issues the final rule. “We recognize that the CFPB was not legally required to conduct an SBAR panel since the rulemaking was transferred to the CFPB after the proposed rule stage,” the groups said in a letter to the bureau last week. However, given the potentially significant...

While Nationstar Mortgage was named by the bankruptcy court as the stalking horse for Residential Capital’s mortgage servicing rights and origination platform, Berkshire Hathaway ousted parent company Ally Financial as the lead bidder for ResCap’s loan portfolio. Nationstar outbid Berkshire Hathaway for the mortgage banking business with a revised $2.45 billion bid that was $125 million higher than it originally offered when the bankruptcy plan was announced, and it also lowered its breakup fee to $24 million. In the initial bankruptcy plan with Ally and ResCap, Nationstar would have collected a $72...

The official watchdog of Fannie Mae and Freddie Mac’s government regulator announced last week it will conduct a “proactive audit and evaluation strategy” of the two government-sponsored enterprises’ real estate owned management policies, as well as the REO oversight efforts of the Federal Housing Finance Agency. “FHFA has a crucial responsibility to ensure that the enterprises manage their REO inventories so as to minimize costs and mitigate the negative effects that foreclosed properties can have on the communities in which they are located,” said the Office of the Inspector General. “Given the...

As New York announced a $60 million program to help struggling homeowners, winning accolades from the Department of Housing and Urban Development for its use of the foreclosure settlement money, other states continue to plug budget holes with their settlement gains. The Empire State’s Homeowner Protection Program will fund housing counseling and legal services using some of the $107.6 million allotted the state through the multistate servicing and foreclosure settlement. HUD Secretary Shaun Donovan called it a “national model” for how states should use their settlement money. NY Attorney...

The Federal Housing Finance Agency should continue projects already underway to create more uniformity in Fannie Mae and Freddie Mac operations and extend those efforts to reduce the liquidity gap in the MBS issued by the two government-sponsored enterprises, a key Wall Street group said. Giving priority to the alignment of Fannie and Freddie operations will “set the stage for the longer-term future of the enterprises and mortgage finance in this country more broadly, including non-agency securitization,” said the Securities Industry and Financial Markets Association. Recent FHFA projects to standardize...

Asset-backed commercial paper investors in the ongoing legal squabble that resulted from the collapse of Taylor Bean & Whitaker Mortgage Corp. and its Ocala Funding LLC subsidiary may bring suit over claims arising in documents, despite not being parties to those documents, when their agent refuses to sue or allow the investors to sue, a federal judge has ruled. Last week, U.S. District Court Judge Robert Sweet in Manhattan permitted Ocala’s two sole investors, plaintiffs Deutsche Bank AG and BNP Paribas Mortgage Corp., to sue defendant Bank of America in its roles as indenture trustee and collateral agent...

The Federal Reserve is getting closer to recouping the last bit of its substantial investment in American International Group made during the financial market meltdown of 2008. This week, the Federal Reserve Bank of New York moved ahead with auctioning off seven related offerings of once-“toxic” securities in collateralized debt obligations with a combined $7.09 billion in face value held in its Maiden Lane III portfolio. There were two sales conducted on Wednesday, Altius 1, with a face amount of $1.073 billion, and Altius 2 ($853 million), an FRBNY official said, both of which ended up being sold to Merrill...