Fairholme Funds officials this week continued to press their case for restoring shareholder rights for private investors in Fannie Mae and Freddie Mac, expressing hope that the incoming Trump administration will be friendlier to their cause. In Fairholme Funds Inc. v. United States, et al, the plaintiffs argue that the net worth sweep imposed by the Treasury Department and Federal Housing Finance Agency was illegal and that the two government-sponsored enterprises were not in a “death spiral” at the time of the bailout as the government claims. During a conference call this week, Fairholme CEO Bruce Berkowitz said...

A U.S. district court judge in New York has certified a class of investors to move forward with mortgage-related fraud claims they have brought against three large banks. MBS investors led by plaintiff New Jersey Carpenters Health Fund sued units of Wells Fargo that were acquired from Wachovia Capital Markets, Royal Bank of Scotland and Deutsche Bank that helped underwrite $7.7 billion of MBS issued by failed subprime lender NovaStar Mortgage. The plaintiffs accused...

American International Group is working to “rebalance its exposure to residential mortgages” after the company’s sale of United Guaranty, a private mortgage insurer. Douglas Dachille, an executive vice president and CIO at AIG, detailed a number of plans late last week in a presentation to investors. He said the insurance giant is structuring direct investments in residential and commercial mortgages and other whole loans. “The team is...

The baseline conforming loan limit for Fannie Mae and Freddie Mac will climb to $424,100 in 2017, the first such increase since 2006. The 1.7 percent increase reflected a gain in the Federal Housing Finance Agency’s expanded-data house price index at the end of the third quarter. The new ceiling for high-cost markets will...

The Federal Communications Commission last week denied a request from the Mortgage Bankers Association to exempt calls from mortgage servicers to borrowers from provisions of the Telephone Consumer Protection Act. Officials at the MBA said the denial was unexpected. Among other issues, the petition had received some support from the Consumer Financial Protection Bureau and the Federal Housing Finance Agency. The TCPA and FCC rules prohibit...

President-elect Donald Trump’s business background could help address two of the biggest challenges confronting the housing finance industry today: limited credit availability and a shortage in the supply of the housing stock, according to Laurie Goodman, director of the Urban Institute’s Housing Finance Policy Center. “Mortgage credit availability is an issue we have repeatedly written about,” said Goodman in a recent online blog post. Some of her previous research has shown that “the market is taking less than half the credit risk it was taking during 2001, a period of reasonable credit standards,” she noted. And other HFPC research has shown...

Home prices on non-distressed properties declined in October for the second straight month, with demand from homebuyers diminishing somewhat as part of a seasonal pattern, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. Non-distressed properties sold last month had an average price of $297,300, based on a three-month moving average. That was down 1.8 percent from September and off 4.1 percent from the average price of $310,000 in August, which was the peak for the year. While prices on non-distressed properties have declined recently, prices in October were...

The election of Donald Trump as the 45th president may open a path out of conservatorship for Fannie Mae and Freddie Mac, some investors in the two government-sponsored enterprises believe. According to interviews conducted with GSE investors, industry lobbyists, trade group officials and others, a “recap and release” plan backed by the junior preferred shareholders of Fannie and Freddie could formally be presented to the Trump administration early next year. There hasn’t...

A federal district court judge in Washington, DC, ordered the transfer of a False Claims Act complaint filed by the Department of Justice against Quicken Loans alleging violation of FHA rules to the nonbank lender’s home court. Judge Reggie Walton of the U.S. District Court for the District of Columbia denied the DOJ’s arguments to keep the case in the nation’s capital and instead granted Quicken’s motion to transfer it to the U.S. District Court for the Eastern District of Michigan in downtown Detroit. Among other things, the government accused...

The Consumer Financial Protection Bureau late last week filed its much-anticipated petition with the U.S. Court of Appeals for the DC Circuit to reconsider some of the key holdings made by a three-judge panel of the court against the agency in PHH Corp. v. CFPB back in mid-October. One such holding was the panel’s determination that the CFPB’s leadership structure is unconstitutional because it is run by a sole director who can only be removed by the president for cause. While an appeal by the bureau was widely expected, the issue took on a new urgency after Republican real estate developer Donald Trump won the presidential election. In its petition, the CFPB asserted...