A federal appeals court in New York this week will hear arguments from African-American subprime borrowers in Detroit in connection with a proposed class action challenging Morgan Stanley’s mortgage securitization practices during the subprime mortgage boom. The American Civil Liberties Union and its partners are seeking class-action status for the borrowers’ Fair Housing Act claims, which were initially rejected by a lower court. The court previously ruled that each borrower would have to sue on his or her own. The issue on appeal at the U.S. Court of Appeals for the Second Circuit is...
Outreach and lender-education efforts by industry groups, such as the National Association of Realtors and the National Association of Home Builders, have boosted refis as well...
Mortgage-finance reform doesn’t look to be anywhere on the horizon, but at some point government policymakers will have to figure out what to do with trillions of dollars of Fannie Mae and Freddie Mac MBS if the two government-sponsored enterprises are put out to pasture. In fact, the transition to a new GSE single security that’s scheduled to start in 2018 could become a test run of sorts for the even bigger changes ahead, according to a paper published by the Urban Institute. Crafted by five mortgage-industry veterans, “A More Promising Road to GSE Reform” is centered on the creation of a new government corporation that would replace Fannie and Freddie. The National Mortgage Reinsurance Corp. would issue...
The Federal Deposit Insurance Corp. this week revised its securitization safe-harbor rule to clarify loss mitigation standards for mortgage servicers to synchronize it with the similar requirements issued by the Consumer Financial Protection Bureau. The FDIC safe-harbor rule sets standards under which the agency will not attempt to capture assets of a failed bank that are transferred to qualifying securitizations. Under the previous rule, servicers of residential mortgages backing MBS that enjoy safe-harbor status were required to take loss mitigation action within 90 days after the loan becomes delinquent. In January 2013, the CFPB adopted...
Fannie Mae and Freddie Mac MBS guarantee fees are too high, given the strong credit profile of new business since the financial crisis, according to a diverse collection of real estate, banking and consumer interest groups. The groups called on the Federal Housing Finance Agency to lower MBS guarantee fees charged by the two government-sponsored enterprises, and to reduce or eliminate the loan-level pricing adjustments that are typically wrapped into the consumer’s note rate. The average g-fee has jumped from 22 basis points in 2009 to 58 bps in 2014, including the 10 bps surcharge that Congress mandated in 2011 to cover a payroll tax cut. Loan-level pricing adjustments can total...[Includes one data table]
Ginnie Mae is once again getting anxious about the growing – and large – presence of nonbanks that service the agency’s MBS, fearing a liquidity crisis could erupt because some firms rely too heavily on “non-traditional and very sophisticated funding mechanisms.” In a statement issued to Inside MBS & ABS this week, Ginnie contrasted nonbanks to depositories “who traditionally were the primary issuers of Ginnie Mae MBS.” The agency added...[Includes one data table]
The Securities and Exchange Commission will re-propose a rule addressing conflicts of interest regarding certain securitizations, according to SEC Chair Mary Jo White. The rule required by the Dodd-Frank Act was originally proposed by the SEC in 2011. “It’s proved to be much more complicated than our experts in the agency envisioned,” White said last week at a hearing by the Senate Committee on Banking, Housing and Urban Affairs. Section 621 of the DFA requires...
The increase in first-time homebuyer volume and market share has occurred without looser underwriting in terms of credit scores and loan-to-value ratios…
Earlier this month, the Consumer Financial Protection Bureau asked to intervene in a federal whistleblower case brought against Ocwen Loan Servicing in order to protect the confidentiality of its supervisory information. “The bureau seeks to intervene for the limited purpose of invoking the bank examination privilege and the bureau’s regulations to protect confidential and privileged bureau supervisory records and information related to the bureau’s supervision of Ocwen,” the CFPB said in its motion filed in U.S. District Court for the Eastern District of Texas, Sherman Division. Counsel for the relators in the case, Michael Fisher and Brian Bullock, and the defendants, Ocwen Loan Servicing and Ocwen Financial Corp., told...
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