Freddie Macs government conservator is stepping up to shut down a potentially costly lawsuit filed against the GSE by the Mortgage Guaranty Insurance Corp. both by legal and by extra-legal means. Last month, the Federal Housing Finance Agency told a Wisconsin federal court that it lacks jurisdiction over the pool insurance suit the mortgage insurer filed against Freddie. Given that the suit would impede FHFA in its capacity as the GSEs conservator, the court should dismiss MGICs suit, according to court papers filed by the Finance Agency on July 20.
The mortgage credit-enhancement business has been no place to be the past few years, but many observers think the market has touched bottom and is starting to come back. After hemorrhaging losses since 2008, the two biggest mortgage credit-enhancement providers Fannie Mae and Freddie Mac reported positive net income on their single-family guaranty businesses during the second quarter. The private mortgage insurance industry hasnt gotten there yet. Fannie and Freddie reported...[Includes two data charts]
Mortgage insurance activity increased dramatically during the second quarter of 2012, with private MIs gaining ground on the government-insurance programs, according to a new ranking and analysis by Inside Mortgage Finance. A total of $133.22 billion of home mortgages were originated with some form of primary MI coverage during the second quarter, up 22.9 percent from the first three months of the year. It was the biggest quarterly output of primary MI since the middle of 2009, and it lifted insured mortgage originations to $241.64 billion in the first half of the year, up 36.1 percent. Despite a relentless assault on their financial health that has driven three companies into runoff mode, private MIs racked up...[Includes three data charts]
The private mortgage insurance industry is now officially under the microscope of the Consumer Financial Protection Bureau over its captive mortgage reinsurance premium ceding practices for possible violations of key federal statutes, including the Real Estate Settlement Procedures Act. The CFPB is carrying forward a number of investigations it inherited from the Department of Housing and Urban Development after passage of the Dodd-Frank Act. Critics contend that captive reinsurance programs violate RESPAs prohibition by collecting insurance premiums without providing any real service or value to the transaction. Civil investigative demands, or CIDs, sent to several private MIs mean...[Includes one data chart]
Hardball conditions imposed by Freddie Mac in order to permit lenders to continue selling loans insured by Mortgage Guaranty Insurance Corp., over the objections of state regulators, has cast a cloud over MGICs already uncertain prospects. Fannie Mae has approved a new MGIC insurance entity that also has the backing of the insurance companys home state regulator, the Office of the Commissioner of Wisconsin. But MGIC warned investors last week that Freddies Aug. 1 approval of the new unit is conditional and could be withdrawn at any time and ends Dec. 31, 2012. Freddie says it can and will pull...
American International Group, MGIC Investment, Genworth Financial and Radian Group have been served with subpoenas by the Consumer Financial Protection Bureau, the firms said in public filings last week, as the bureau is apparently probing to determine if the mortgage insurance companies transferred billions in M.I. premiums to the banks that made the mortgages. PHH Corp. made a similar disclosure back in January. The CFPBs subpoenas, known as Civil Investigative Demands, indicate that the bureaus enforcement...
Revised VA HAMP. The Department of Veterans Affairs has updated the instructions for modifying mortgage loans with a VA guarantee. Changes include clarification concerning occupancy status, an updated reference to another VA guidance on prior approval procedures and extension of the applicability of the said guidance. The changes were announced in Circular 26-10-6. New VA REO Management and Servicing Contractor. The Department of Veterans Affairs has provided details for transferring VA property management (real estate-owned) and portfolio loan servicing contracts for the VA home loan guaranty program from ...
The Federal Housing Finance Agency is exploring the possibilities of a streamlined lender-placed or force-placed insurance policy between Fannie Mae and Freddie Mac. FHFA is keenly interested in costs associated with force-placed insurance and related impacts to borrowers, Fannie Mae, Freddie Mac and the taxpayer, a Finance Agency spokesman told Inside The GSEs. We are looking at policy related to force-placed insurance to see where there might be opportunities to reduce costs. Some existing force-placed policies are controversial because they are sold by insurance companies owned by lenders or by insurers with which the lenders have a financial relationship.
New home loan originations in the second quarter of 2012 were up 5.2 percent from the first three months of the year, according to a new Inside Mortgage Finance ranking and analysis. Production trends varied significantly among the top lenders, however, and early estimates suggest that lenders further down the food chain may be picking up market share. Wells Fargo is still effectively lapping the field with more than double the origination volume of its nearest rival, but the industry leader managed a relatively modest 0.8 percent increase in production while its three closest competitors all reported double-digit gains. Although Wells may be mothballing some firepower by shutting down its wholesale broker business, the company was...[Includes two data charts]
The mortgage industry is facing mounting legal challenges to force-placed insurance practices as evidenced by two class-action lawsuits filed or advanced last week while state and federal policymakers look for ways to reduce homeowner costs on lender-placed insurance. A Florida homeowner filed a class-action lawsuit in federal court in Fort Lauderdale against Wells Fargo Bank, accusing the lender of engaging in a pattern of unlawful and unconscionable profiteering and self-dealing by charging inflated force-placed insurance premiums to homeowners who had allowed their coverage to lapse. Ira Fladell, a lawyer representing himself, claims the bank breached its contract with him and acted in bad faith and that the lender bought...