The Inspector General of the Federal Housing Finance Agency has accused the FHFA of being too lax when it comes to overseeing the budget of Fannie Mae and Freddie Mac and in many instances waiting until the start of the GSEs’ fiscal year to even approve the budget. Inundated with cursory-level analysis and inadequate resources, the IG noted that the FHFA’s budget review and approval process for Fannie and Freddie is seriously flawed. The recently released review was completed in June 2015 and the FHFA for the most part agreed with the IG report and revamped its budget-review process a month later in July 2015. The IG noted that the GSEs often submitted proposed annual operating budgets after...

As the Federal Housing Finance Agency continues to take issue with Property Assessed Clean Energy loans, the program is growing and rating service DBRS said many of FHFA’s concerns about risks can be addressed with proper program design. Earlier this year, FHFA Director Mel Watt said that although the agency is not opposed to energy retrofit programs, they must be structured to ensure protection of the core financing for the home. The issue at stake is that residential PACE assessments threaten to move existing Fannie Mae and Freddie Mac mortgages to a second -lien position, said the FHFA. In the event of a default, PACE assessments would be repaid before...

The volume of cash-out refinance in the second quarter reached its highest level in five years as more borrowers take advantage of rising home values, according to Black Knight Financial Services. Cash-out refinance volumes in the second quarter of 2015 rose close to 70 percent from the same period last year, said Ben Graboske, a Black Knight senior vice president. Today’s levels are comparable to those in 2006, with borrowers now taking out an average of ...

A significant percentage of active Ginnie Mae issuers use subservicers in their operations, and agency officials estimate that 22 subservicers handle roughly a third, or $510 billion, of the program’s portfolio. The four top subservicers handle approximately 21 percent of Ginnie’s total portfolio or 65 percent of the subserviced portion. During the recent Ginnie Mae annual conference in Arlington, VA, representatives from Lakeview Loan Servicing, Pingora Asset Management and ...

The Federal Housing Finance Agency is tackling all things fraud related, from prevention to managing and detecting the various types of potential fraud, according to recently issued guidance to Fannie Mae and Freddie Mac. The FHFA warned that mortgage fraud may occur in loans purchased for the GSEs’ own portfolios or for securitization. Fraud can also be committed by a number of external and internal parties and can occur as part of the origination, underwriting, or closing process or in conjunction with the servicing of a loan on behalf of Fannie or Freddie.The GSEs’ boards of directors are responsible for making sure that the GSEs have appropriate policies in place for preventing and detecting fraud, according to the guidance.

Mortgage banking firms managed to increase their employee rolls by 1,200 workers as autumn began, even though traditionally this is the time when lenders cut back. Hiring at mortgage brokerage shops remained relatively flat at 77,100, according to figures compiled by the Bureau of Labor Statistics. BLS found that mortgage banking companies had 218,300 full-timers on their payrolls at the end of August, a meager sequential gain of 0.5 percent. The figures, which are seasonally adjusted, do not distinguish between production and servicing workers.

A proposal from the Financial Accounting Standards Board that would impact accounting for mortgage servicing rights is getting support from industry trade groups. In August, FASB issued proposed accounting standards covering derivative contract novations on existing hedge-accounting relationships. A task force at the accounting standard setter had found that guidance in generally accepted accounting principles wasn’t explicit on the effect of a ...

Mortgage lenders have entered a new, unfamiliar zone of regulation with the TILA-RESPA Integrated Disclosure (TRID) rule, which became effective on Oct. 3. The Stratmor Group, a mortgage consulting firm, said reaching out to borrowers prior to loan closing increases borrower satisfaction significantly, which regulators may view as a positive indicator of good-faith efforts to comply with the complex new rule. “One aspect of TRID compliance is making sure that the customer ...

Rental demand coupled with favorable demographic trends in most major markets has Freddie Mac predicting that the multifamily market will remain strong, at least for several more years, according to an outlook report released this week. Despite a large amount of new multifamily units entering the market this year, and a rise in construction permits, Freddie said the sector remains robust. The supply of multifamily properties has reached the highest level of completions in 2015 since the 1980s. Freddie said that demand has kept pace with new supply, calming concerns that growth might start to decelerate. The sector is in its sixth consecutive year of robust growth. Steve Guggenmos, senior director of Freddie’s multifamily investments and research, said...

Despite the uncertainty over marketing services agreements caused by Consumer Financial Protection Bureau enforcement actions, MSAs are still legal and viable, as long as they are properly ordered, according to industry experts at Lenders Compliance Group, a consulting firm in Long Beach, NY. During a webinar this week, three compliance pros at the firm delved into the first big splash the CFPB made on the MSA front, its Sept. 25, 2014, consent order with ...