Financial Freedom, an Austin, TX-based servicer, agreed to an $89 million settlement with the U.S. Department of Justice to settle allegations that it violated the False Claims Act, the Financial Institutions Reform, Recovery, and Enforcement Act, and FHA servicing requirements in connection with its participation in FHA’s Home Equity Conversion Mortgages, or “reverse mortgage,” program. The Justice Department alleged that Financial Freedom sought to obtain insurance payments for interest from FHA “despite failing to properly disclose on the insurance claim forms it filed with the agency that the mortgagee was not eligible for such interest payments because it had failed to meet various deadlines relating to appraisal of the property, submission of claims to the Department of Housing and Urban ...

The CFPB responded that “none of the identified opportunities for improvement ever resulted in any breach of confidential information outside the bureau.”

In a number of cases, GSE seller-servicers cleaned up pipelines of pending or disputed buyback demands.

The low trading volume is an indication that liquidity is drying up, but it also reflects a decline in new agency MBS being created.

Since its founding in mid-2014, LendingHome has originated $1 billion in loans.

Since Watt’s recent testimony, GSE speculators like Pershing Square and Fairholme have been mostly quiet.

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Treasury Eyeballing CFPB Rules as Part of Regulatory Relief Review. The Treasury Department is focused on a wide range of regulatory requirements where simple communication and clarification of the regulatory intent is warranted, such as the CFPB’s ability-to-repay rule, the integrated disclosure rule and the Home Mortgage Disclosure Act rule, Craig Phillips, counselor to the Treasury secretary, said during a symposium in New York City last week, according to Inside Mortgage Finance.... Dodd-Frank Changes to be Discussed. House Financial Services Committee Chairman Jeb Hensarling, R-TX, is scheduled to discuss his Dodd-Frank Act alternative, H.R. 10, the Financial CHOICE Act, Tuesday of this week at an event at the American Enterprise Institute....

Federal Housing Finance Agency Director Mel Watt’s comments last week that he’s prepared to allow the GSEs to build a capital buffer to avoid a Treasury draw was met with both applause and concern. But this week, Bob Ryan, special director to Watt, clarified the comments stating that the plan would entail delaying the dividend payments to the U.S. Treasury Department and not suspending them. Ryan, speaking during a credit-risk transfer symposium in New York City, kicked off the first five minutes of a panel discussion about GSE reform by talking about the potential capital buffer plan. He said that it would be done strictly for the purpose of avoiding draws on the “limited resources of the preferred stock purchase agreement.”

The purchase-mortgage business showed some green shoots in April, but not enough to offset another drop in refinance activity, according to a new Inside The GSEs ranking and analysis. Fannie Mae and Freddie Mac securitized $31.84 billion of purchase mortgages last month, a 12.2 percent increase from March. It was the third straight monthly gain in purchase-mortgage volume, bringing year-to-date activity to $123.46 billion, a 13.6 percent improvement over the same period in 2016. Purchase mortgages accounted for over half of GSE business in April for the first time since August of last year. But the refinance side of the business fell again in April, to just $25.49 billion. That was down 17.8...