The strength of the non-agency market has become a major point of concern as a diverse coalition of market participants lobbies for changes to a proposed rule for mandatory risk retention. The impact on the non-agency market is second only to the group’s concerns about downpayment requirements in the qualified residential mortgage debate. “The proposed narrow QRM rule discourages...

Following signs that the Consumer Financial Protection Bureau may been far more involved in the 50-state servicer settlement discussions than it has publicly let on, key Republican House committee chairmen have called upon Treasury Secretary Timothy Geithner to provide documents and records related to the CFPB’s role in the negotiations, un-redacted, by no later than July 5. In their request, the lawmakers cited a copy of a CFPB settlement presentation that recommended goals, provided…

The National Credit Union Administration’s lawsuits regarding non-agency mortgage-backed securities mark a shift in focus to misrepresentation rather than breaches of representations and warranties, according to industry attorneys. Last week, the NCUA filed lawsuits against JPMorgan Securities and RBS Securities claiming that misrepresentations as well as violations of federal and state securities laws caused...

The Supreme Court of the United States has accepted First American Financial Corp. v. Edwards, in which the justices will consider whether an individual who has not suffered any actual damages from violations of the Real Estate Settlement Procedures Act has legal standing to sue in federal court. SCOTUS plans to consider two questions, the first of which is “whether RESPA requires the plaintiff in a private damages action to allege that an unlawful…

Legislation gaining momentum in Congress to create a covered bond framework still lacks the endorsement of the Federal Deposit Insurance Corp. Analysts note that the FDIC’s concerns need to be addressed for there to be any hope of establishing a non-agency market via covered bonds. Last week, the House Financial Services Committee approved H.R. 940, the U.S. Covered Bond Act of 2011, by a 44-7 bipartisan vote. However, the committee rejected...

Treasury Undersecretary Jeffrey Goldstein told an industry gathering last week that the Obama administration is paying very close attention to industry feedback on its controversial risk-retention proposed rule, after an outpouring of concern from both the industry and a number of members of Congress raised the alarm. “We are seriously considering feedback and are committed to getting this rule right, so that we can ensure securitization ...

Trade groups representing home builders and real estate agents are warning Congress that a decrease in conforming loan limits will result in higher interest rates for borrowers and other less favorable loan terms. However, the housing advocates face a tough battle in extending temporarily elevated conforming loan limits. Without action from Congress, the high-cost loan limit for agency mortgages and the FHA will fall from $729,750 to $625,500 beginning Oct. 1. Some 5.25 million owner-occupied homes will no longer qualify...

Morgan Keegan, a brokerage subsidiary of Regions Financial, agreed to pay $200 million last week to settle fraud charges related to subprime mortgage-backed securities. The settlement was reached with the Securities and Exchange Commission, state regulators and the Financial Industry Regulatory Authority. The regulators accused Morgan Keegan of causing the false valuation of subprime MBS in five funds managed by Morgan Asset Management from January to July 2007. The settlement also states...