For the third time in as many months, a federal judge has summarily dismissed a securities class action lawsuit against a former Fannie Mae executive. U.S. District Judge Richard Leon threw out the case against Leanne Spencer, Fannie’s former controller, brought nearly a decade ago by investors hoping to recover damages. Two Ohio pension funds – the Ohio Public Employees Retirement System and the State Teachers Retirement System of Ohio – filed suit in 2004 related to a $6.3 billion overstatement of earnings against Fannie and three former GSE executives, including CEO Franklin Raines.

The major servicers use three different models to implement single point of contact requirements, with no clear answer as to which model is the best, according to a new report from the Treasury Department. Servicers report seeing benefits from SPOC requirements though there are also concerns with the new servicing model. A SPOC works with a borrower to determine options throughout the loss mitigation process. The Treasury requires servicers participating in the Home Affordable Modification Program to ...

Fannie Mae and Freddie Mac earlier this month announced new, synchronized requirements regarding the management of law firms for default servicing, bankruptcies, foreclosures and related litigation involving mortgages owned or guaranteed by the two GSEs. Effective June 1, 2013, Fannie’s and Freddie’s servicers will be allowed to choose their own attorneys, create their own processes for managing foreclosure processing and maintain direct relationships with their law firms. The new rules also require servicers to establish procedures to manage and monitor all aspects of the law firm’s performance and compliance with applicable requirements. Upon request, servicers will be required to perform a due diligence review and notify the GSEs of the result.Fannie’s and Freddie’s new rules were issued at the direction of the GSEs’ conservator, the Federal Housing Finance Agency. The directive comes more than a year after the FHFA’s Office of Inspector General dinged the agency for lax oversight of the GSEs and problems involving improper foreclosure practices with their affiliated law firms.

An examination of how quickly the distressed real estate inventory dissipates in three Northeast states suggests that federal policymakers need to pay much more attention to local mortgage market conditions when formulating policy, one researcher says. “A critical issue in today’s housing market concerns both the size of the distressed real estate inventory and the speed at which it will dissolve,” said James Follain, principal of James R Follain LLC and contributing editor to ...

The Home Affordable Refinance Program hit record levels in the third quarter of 2012, with 286,044 Fannie Mae and Freddie Mac borrowers taking advantage of the program designed for underwater borrowers. That was up 17.8 percent from the second quarter and raised total participation in the program to 1.73 million since it began back in 2009. The biggest gains this year have been in the refinances of mortgages with loan-to-value ratios exceeding 105 percent [Includes one data chart] ...

The Department of Housing and Urban Development warned that an extraordinarily high percentage of loans in claim status can trigger a lender monitoring review to ensure the lender’s capacity to meet indemnification requirements. A high loan defect rate may be one of several factors used to target FHA lenders for a special review to determine the amount of risk a lender might pose to the safety and soundness of the FHA’s single-family mortgage insurance program, according to Justin Burch, director of the Quality Assurance Division at FHA during a webinar hosted this week by Inside Mortgage Finance. “If you are a lender that is...

The conforming mortgage market continued to dominate new loan originations during the third quarter of 2012, accounting for a whopping 85.7 percent of the period’s robust $475 billion in new originations, according to a new Inside Mortgage Finance analysis and ranking. The conforming market – which includes loans with government insurance and conventional mortgages up to the eligible loan limit for Fannie Mae and Freddie Mac – represented 84.5 percent of new originations in 2011. During 2010, the conforming market accounted for a record 90.1 percent of new loan production. The jumbo sector made...[Includes two data charts]

The mortgage banking industry will support reasonable efforts to protect the FHA Mutual Mortgage Insurance Fund as long as the changes don’t expose FHA lenders to onerous liability risk and treble damage claims, which could force them to limit or curtail their FHA lending, said the Mortgage Bankers Association. MBA President and CEO Dave Stevens said appropriate protections for the FHA are clearly needed, but they should not go so far as to shut down or restrict access to affordable credit and sustainable homeownership, particularly for first-time homebuyers. He said the industry is most concerned with FHA proposals to seek authority from Congress to extend indemnification requirements to all direct endorsement (DE) lenders and for an amendment to eliminate the “knew or should have known” standard with regard to fraud or misrepresentation. Both proposals are...

Federal Reserve Chairman Ben Bernanke late last week reiterated his view that tight underwriting standards set by lenders are hindering a broader recovery of the housing market. Lenders, meanwhile, cite concerns with repurchases and regulatory uncertainty. Bernanke noted that low home prices and historically low interest rates have not prompted the “powerful housing recovery” that has typically occurred in the past after housing problems. “Unfortunately, while some tightening of the terms of mortgage credit was certainly an appropriate response to the earlier excesses, the pendulum appears to have swung too far, restraining the pace of recovery in the housing sector,” he said. More than half of the lenders that responded to the Fed’s senior loan officer opinion survey earlier this year said...

The first-time homebuyer share of home-purchase activity and the FHA share of home-purchase financing have each fallen significantly since peaking in 2010, according to results from the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. The trends appear to be tied to lender underwriting requirements and the cost of FHA loans. In May 2010, first-time homebuyers accounted for 45.8 percent of home purchases, based on the three-month moving average. In October 2012, the share fell to 34.7 percent. Similarly, the FHA share of home-purchase financing fell during that time from 36.7 percent to 26.3 percent. “Financing of first-time homebuyers with low downpayments threatens...