There was agreement this week during a hearing of the Senate Banking, Housing and Urban Affairs Committee that recent efforts to expand the government’s refinance program are slowly having the desired effect, but the direction of refi policy to come remains an open dispute among officials. Department of Housing and Urban Development Secretary Shaun Donovan said the Obama administration is “encouraged thus far” by the 50,000 homeowners who have already refinanced their mortgages under HARP 2.0, the revamped Home Affordable Refinance Program. “These changes have met with a very positive response from homeowners....

Bank of America is challenging new federal charges that it discriminated against loan applicants with disabilities, arguing that it applied conservative FHA underwriting standards in three cases covered by a lawsuit brought by the Department of Housing and Urban Development. HUD accused BofA of imposing unnecessary and burdensome requirements on borrowers who depended on disability income to qualify for their mortgages. The bank also allegedly required some disabled borrowers to provide physician statements to qualify for their mortgage financing. The charges are based on a HUD-initiated...

Most securitizers in the non-agency MBS market have filed relatively few repurchase demands with loan originators, and only a small portion of these demands resulted in a buyback. A new Inside MBS & ABS analysis of representations and warranties disclosures now required by the Securities and Exchange Commission revealed that non-agency MBS securitizers sought just $7.45 billion in repurchases over the three years ending in 2011. That represented just 1.1 percent of the total issuance reported by securitizers. The new reps and warranties disclosures – which were mandated by the...(Includes one data chart)

The Federal Housing Finance Agency wants to use parts of the existing MBS programs at Fannie Mae and Freddie Mac to build a new mortgage securitization platform that could be used by a variety of issuers under a new plan to wind down the government-sponsored enterprises. The FHFA this week submitted to Congress a strategic plan to “update and extend the goals and directions” of the GSEs, which have been under government conservatorship since September 2008 with “no near-term resolution in sight.” Many of the initiatives are already underway. “This plan envisions actions by the enterprises that will...

The U.S. Court of Appeals for the Second Circuit is apparently on the verge of deciding in which jurisdiction the pending $8.5 billion Bank of America/Countrywide residential MBS representations and warranties settlement with Bank of New York Mellon and investors will be finalized. The final outcome is expected to influence similar disputes involving other large mortgage originators, but probably on a smaller scale. Last week, the appeals court held a hearing to determine if the case should be moved back to New York state court, which would accelerate a conclusion of the settlement. “A final decision from...

State and local housing finance agencies are looking at ways to rekindle investor interest in single-family housing bonds, including the potential use of Ginnie Mae MBS as collateral for mortgage-related municipal bonds, according to the agency’s top executive. More housing finance agencies are considering returning to FHA and Ginnie Mae to take advantage of the government insurance and guarantee to boost their long-term, fixed-rate bonds at rates low enough for HFAs to continue offering affordable rate mortgage products, according to Ginnie Mae President Ted Tozer. As the municipal bond market...

Freddie Mac is reportedly crafting its own plan with institutional mortgage-bond investors to sell off hundreds of distressed homes owned by the government-sponsored enterprise, independent of a current government proposal to unload GSE real estate owned properties. According to Reuters, Freddie’s plan would allow investors to individually choose the properties they want to purchase rather than sell the homes in discounted bulk packages, like the plan that’s spearheaded by the Federal Housing Finance Agency. However, just as with the government’s plan, Freddie would secure a special line of...

The long-anticipated settlement among mortgage servicers, state attorneys general and federal agencies will be a positive for the housing market but have a modest impact on non-agency MBS, according to Moody’s Investors Service. The deal provides $10 billion for principal reduction loan modifications, and coupled with an expansion of the Home Affordable Modification Program, should help up to 1 million homeowners avoid foreclosure, Moody’s said. That may be a relatively small number compared to the 14.6 million households that are underwater, but it will help curb the flow of foreclosed...

Some 42 months into the government conservatorship of Fannie Mae and Freddie Mac “with no end in sight,” the GSEs’ regulator has planned out the two companies’ next steps but it says Congress needs to have the last word as to the final fate of Fannie and Freddie. Federal Housing Finance Agency Acting Director Edward DeMarco this week dispatched his “strategic plan” to House and Senate leaders in which the Finance Agency outlines the next phase of conservatorship for the GSEs while issuing a call to action to lawmakers.

Bank of America late this week announced it would stop selling new mortgages to Fannie Mae in the wake of an ongoing dispute with the GSE over repurchases.In its quarterly filing with the Securities and Exchange Commission, BofA said starting this month, it will no longer place non-Making Home Affordable program refinance first-lien mortgage products into Fannie mortgage-backed securities.BofA cited both the GSEs’ “increasingly inconsistent” repurchase requests compared to Fannie and Freddie Mac’s past conduct and the bank’s interpretation of its own contractual obligations, which BofA said has resulted in an increase in claims outstanding from the GSEs.