“The simple way to think about the long view is that we’re five years through a 10-year transition,” said Fannie Mae Chief Economist Doug Duncan during a housing conference sponsored by Fitch Ratings in New York this week. 2012 will be “the year of the political economy,” Duncan said. While the moniker partially refers to the election for the White House, as well as on Capitol Hill, it also points to the number of political decisions this year that will help to determine financial fortunes. Stateside, this year will see the expiration of a number of business and household taxes, from the payroll tax cut to...

There is a significant difference in foreclosure timelines depending on whether states require judicial foreclosures. The liquidation probability, according to an Amherst Securities analysis, increased greatly in a non-judicial state, like California, versus judicial states like Florida. “We can work our way through the backlog more quickly in non-judicial states,” said Larry Litton, chairman and CEO of Selene Finance. He noted that some judicial states were easier to work with than others, based on whether the legislature was willing to work with servicers. In other areas of the country, servicers...

It started last week with an unsolicited white paper outlining “a framework for thinking about certain issues and tradeoffs that policymakers might consider” and blossomed into a coordinated assault by the Federal Reserve on the housing slump that won’t go away. Having purchased over $1 trillion in mortgage securities in an effort to drive mortgage interest rates to all-time lows, the Fed appears to be using its speechmaking and paper-writing powers to try to get the rest of Washington moving on housing. In addition to the policy paper, Fed officials in the past week have made three speeches on...

A growing consensus is emerging among legal experts that someone will challenge in court President Obama’s contentious recess appointment of Richard Cordray as the first director of the Consumer Financial Protection Bureau. But a final outcome could take years and have no impact on the agency’s actions while the case is unfolding. “These appointments establish a dangerous precedent that threatens the confirmation process and undermines the system of checks and balances embedded in the Constitution,” a number of House Republicans said in a letter they fired off to the president after he made his...

Fed Governor Sarah Bloom Raskin late last week stumped for creating an effective enforcement system to deal with shortcomings in the mortgage servicing industry that have come to light since the foreclosure crisis, as state officials pressed to expand a potential settlement over past abuses. “The law is not a scarecrow where the birds of prey can seek refuge and perch to plan their next attack,” Raskin said in a speech to a group of attorneys. The Fed governor said it’s important for servicers to have transparent, enforceable and sensible rules, adding that deferring to “standard industry...

Mortgage industry groups are urging the U.S. Supreme Court to pay close attention to the wording of the Fair Housing Act – specifically phrasing that’s not in the 1968 law – in deciding whether fair lending charges can be brought on the basis of disparate impact. In an amicus brief filed in the case of Magner v. Gallagher, mortgage trade groups said the Fair Housing Act “requires proof of intentional discrimination and does not envision a violation based on disparate impact.” The brief was filed by K&L Gates on behalf of the Independent Community Bankers of America, the Consumer Mortgage...

Refinance activity has represented more than half of home loan originations every year since 2006, and housing sales have been in a slump for the past five years. But individual mortgage lenders continue to carve out their own production strategies, including in some cases a devotion to the smaller purchase-mortgage sector. A new Inside Mortgage Finance analysis of loans originated under the four major agency mortgage programs through the first nine months of 2011 shows that many of the top overall producers beefed up their market share by aggressively originating...(Includes one data chart)

The home-equity loan market declined further during the third quarter of 2011 as depository institutions reined in new production and their existing portfolios – in most cases – continued to wither. According to the Federal Reserve, the outstanding supply of home-equity loans – both closed-end second mortgages and lines of credit – fell to $887.5 billion as of the end of the third quarter. That was down 1.9 percent from the midway point in 2011 and off 21.5 percent from the HEL market’s all-time high of $1.131 trillion reached back in 2007. Most home-equity loans are held in portfolio by..(Includes two data charts)

The N.Y. Supreme Court Appellate Division overturned a ruling that dismissed a foreclosure case because attorneys representing the lender failed to meet a deadline for filing a conflict-of-interest document. Judge Arthur Schack dismissed the case brought by U.S. Bank because its attorneys, the now infamous Steven J. Baum law firm, submitted a conflict-of-interest filing 123 days after it was due. The case involved Kelvy Guichardo, a defendant who defaulted on his mortgage. Schack was concerned that there might be a conflict of interest for Steven J. Baum and ordered the law firm to submit an...

It didn’t take long for the Consumer Financial Protection Bureau to get its regulatory groove on after President Obama made a recess appointment of Richard Cordray as the agency’s first director. Just hours after the appointment was announced Jan. 4, Cordray revealed the newly empowered bureau was beginning its supervision of non-bank mortgage lenders and other non-bank entities.“One difficulty we faced until now was that, without a director, we were unable to address all the problems we were created to tackle. In particular, we lacked the ability to supervise financial institutions other than big banks – like non-bank mortgage lenders and servicers and payday lenders,” Cordray said in a speech. “Many of these institutions had no regular federal oversight in the run-up to the financial crisis. They led a race to the bottom that pushed aside responsible businesses, including community banks and credit unions, and greatly harmed consumers. “I am pleased to say that we will now be able to exercise the full authorities granted to us under the law and begin to supervise these non-banks,” the new director added.