Lenders are not liable for a servicer’s failure to comply with the Real Estate Settlement Procedures Act, according to a recent ruling by the U.S. Court of Appeals for the Fifth Circuit. Such claims by borrowers have seen some success in district courts and this was the first time an appeals court considered the issue.

The Financial Crimes Enforcement Network.GSE anti-money laundering, SARs reporting proposed. The Financial Crimes Enforcement Network proposed regulations that would require Fannie Mae, Freddie Mac and the Federal Home Loan Banks to develop anti-money laundering programs and file suspicious activity reports with FinCEN. The government-sponsored enterprises currently file fraud reports with their regulator, the Federal Housing Finance Agency, which then files SARs with FinCEN when the facts in a particular fraud report warrant a SAR under FinCEN’s reporting standards.

A white paper put together by a researcher at the Federal Reserve looks into what determines whether federal and state supervisors examine state banks independently or together. The results suggest that supervisors coordinate examinations in order to support states with lower budgets and capabilities and more banks to supervise. “I find that states with larger budgets examine more banks independently, that they accommodate changes in the number of banks mostly through the number of examinations with a federal supervisor and that, when examining banks together, state banking departments that have earned quality accreditation are more likely to write conclusion reports separately from federal supervisors,” researcher Marcelo Rezende said. The results also indicate that regulation affects supervision by changing the characteristics of banks. “Independent examinations decrease with branch deregulation, which is consistent with the facts that this reform consolidated banks within fewer independent firms and that state and federal supervisors are more likely to examine large and complex institutions together,” said Rezende.

The European debt crisis, following not far behind the global financial market meltdown of a few years ago, has put more pressure on the covered bond market, but analysts at the ABS East conference sponsored by Information Management Network said the sector is holding up well and gaining more acceptance in other countries. Covered bonds have not been completely unscathed, said Michael Durrer, a partner at Sidley Austin LLP. But Canada is starting up a covered bond market, Australia has recently enacted legislation, New Zealand has seen its first transactions and Belgium – the last European...

President Obama has announced Carol Galante as his pick for Assistant Secretary for Housing and FHA Commissioner at the Department of Housing and Urban Development. Galante has occupied the two posts in an acting capacity since July 12, when she replaced Robert Ryan. Ryan temporarily assumed both jobs after former HUD Assistant Secretary for Housing and FHA Commissioner David Stevens left HUD at the end of March 2011 to join the Mortgage Bankers Association as its new president and CEO. Prior to her current post, Galante served as HUD deputy assistant secretary for multifamily programs. In addition, Galante, a licensed real estate broker, has been a leader of major administration initiatives, including ...

Any changes that would restrict membership or narrow the Federal Home Loan Banks’ mission should come first from Congress not by administrative fiat, Bank officials told House members this week.FHLBank of Dallas Chairman Lee Gibson testified before the House Financial Services Subcommittee on Oversight and Investigations that explicit Congressional guidance is both necessary and proper before any fundamental alteration of the FHLBank system is imposed.

The head of the Federal Housing Finance Agency says his agency expects to complete a review of potential improvements to the Home Affordable Refinance Program “by the end of this month” but based on what they heard during a private meeting last week, dissatisfied House Democrats say they expect the results won’t nearly be good enough. FHFA Acting Director Edward DeMarco met last week with a group of 17 congressmen, led by Reps. Dennis Cardoza, D-CA, and Elijah Cummings, D-MD, to discuss ways to reinvigorate the underwhelming Fannie Mae and Freddie Mac refinance program. In what’s been described as a...

A scathing criticism of the way the Federal Housing Finance Agency and Freddie Mac handled a $1.35 billion settlement with Bank of America could cause the regulator and the government-sponsored enterprises to tighten repurchase enforcement – and consequently inflate the buyback problem, according to litigation experts. Speaking on a recent webinar hosted by Inside Mortgage Finance, experts said a report by the FHFA’s Office of the Inspector General which found flaws in the BofA settlement approval process, could push the GSEs and their regulator to lean harder on major lenders to repurchase “bad loans.” This, in turn, could...

The Securities and Exchange Commission has made a good bit of progress in updating its proposal for shelf eligibility conditions for ABS in light of industry comments and the passage of the Dodd-Frank Act. However, there are still numerous areas that concern major players in the mortgage finance industry. A number of commenters took issue with the SEC’s proposal to impose an additional executive officer certification requirement. The agency originally proposed requiring the issuer to file an exhibit to the registration statement consisting of a certification of the chief executive officer of the depositor that, to his or her knowledge, “the securitized assets backing the issue have...

The chairman of the House Committee on Oversight and Government Reform wants the Federal Housing Finance Agency to explain why it hired two outside law firms in a massive legal action to recover losses suffered by Fannie Mae and Freddie Mac on their investments in non-agency MBS. Rep. Darrell Issa, R-CA, wrote FHFA Acting Director Edward DeMarco on Sept. 29 asking why the agency hired outside counsel from Quinn Emanuel & Sullivan and from Kasowitz Benson Torres & Freidman to initiate lawsuits against financial institutions and how much the agency is paying them. Issa posed detailed questions and requested documents regarding...