The Consumer Financial Protection Bureau announced this week that an undisclosed number of lenders were found to be improperly disclosing interest-only payments on IO bridge mortgages, in violation of Regulation Z. The CFPB said the inaccurate disclosures were due to a software error as the lenders erroneously included a portion of the monthly payment amount that was to be applied to fees financed into the principal balance ... [Includes six briefs]
The “Brexit” vote in the United Kingdom last week helped significantly reduce interest rates on new jumbo mortgages. Looking forward, it’s not clear if rates will remain low, which would boost refinance volume, or if banks will make further adjustments. The Brexit vote prompted investors to increase their holdings of 10-year Treasury notes, pushing down yields. Interest rates on mortgages tend to follow trends in the 10-year Treasury, though rates on jumbo mortgages can be ...
Upgrades of ratings on structured finance products hit an all-time high in 2015, according to a study released this week by S&P Global Ratings. The study tracked ratings across sectors and the world, while the U.S. residential MBS sector showed mixed performance. S&P said it had 30,359 ratings outstanding on global structured finance securities at the beginning of 2015. During the year, 9.8 percent of the ratings were upgraded. The rating service said upgrades in 2015 were most prevalent on structured credit deals in Europe and the U.S. Some 11.2 percent of S&P’s ratings were downgraded...
As Tim Rood of The Collingwood Group noted: An investor can buy a mortgage at 65 cents on the dollar, “notify the borrower they are eligible for a note mod down to 80 cents on the dollar and voila!”
Since the United Kingdom voted to leave the European Union a week ago, interest rates in the U.S. have been steadily falling, causing a rally in MBS prices. According to market watchers, Fannie Mae/Freddie Mac MBS values for new securities haven’t been this good since January 2015. Meanwhile, mortgage rates touched a three-year low the past few days with some primary market lenders making new loans at 3.25 percent and no points. As Inside MBS & ABS went to press, the benchmark 10-year Treasury was yielding...
Several more court documents were released over the past week that offer additional details into the circumstances surrounding the Treasury Department’s decision to replace the quarterly dividend Fannie Mae and Freddie Mac had been paying in conservatorship with a net worth sweep. Industry observers say the new memos and deposition transcripts reinforce the notion that the government had been planning the sweep for a while before it was implemented in late 2012. The government-sponsored enterprises’ shareholders have been challenging...
The Securities and Exchange Commission’s recent $12.7 million settlement with First Mortgage Corp. and several of its top executives over an allegedly fraudulent sale of toxic MBS to investors reveals the agency’s hidden role as a regulator of Ginnie Mae issuers, attorneys at Mayer Brown warned. Though seldom in the news, the SEC continues to bring enforcement actions against public companies that commit fraud involving Ginnie MBS, as seen in the FMC case, and previous enforcement actions against Taylor Bean & Whitaker and Radius Capital, the attorneys noted in a recent analysis. When bringing these cases, the SEC seeks...
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