House Republicans this week pushed through six more bills designed to wind down Fannie Mae and Freddie Mac but not before Democrats debated and managed to pass a couple of speed-bump amendments. The focus in the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises thus far has been on an assortment of narrow measures that would continue to squeeze Fannie and Freddie’s activities and increase GSE oversight while in conservatorship. During a markup this week, Democrats and some disaffected GOP subcommittee members spent a substantial amount of ...

Peter Wallison, a commissioner on the Financial Crisis Inquiry Commission, violated the FCIC’s ethics guidelines and was extremely difficult to work with, according to an investigation by Democratic staff on the House Committee on Oversight and Government Reform. A report released this week by Rep. Elijah Cummings, D-MD, the ranking member on the committee, also revealed that FCIC staff thoroughly debunked mortgage-related claims made by Edward Pinto, a resident fellow at the American Enterprise Institute. Pinto claimed that the economic crisis of 2007 was caused by ...

The Department of Housing and Urban Development is working on a proposed regulation that seeks to harmonize existing standards for determining when a housing practice with a discriminatory impact violates the Fair Housing Act. The proposed rule would cover the liability standards in instances in which a racially neutral housing practice has a discriminatory effect. The disparate impact theory has been used in fair housing cases to allege discriminatory activity when the terms of a business policy are neutral toward protected classes but the policy is shown to have greater impact on minorities or other protected groups. There has been debate over...

A new bipartisan bill introduced last week that would replace the government-sponsored enterprises Fannie Mae and Freddie Mac with a single, government-owned entity designed to issue and guarantee mortgage-backed securities demonstrates the lack of political consensus – within the Republican party and Congress in general – about how to deal with the GSE problem. The new bill, H.R. 2413, the Secondary Market Facility for Residential Mortgages Act of 2011, would effectively merge Fannie and Freddie into a single government-backed entity that would issue and guarantee MBS. The MBS would have an explicit government guarantee paid for by...

Experts sharply disagreed on the Federal Reserve Board’s controversial new rules on loan officer compensation during a hearing this week in the House Financial Services Committee, with some claiming it is a confused mess and others saying it’s a shield for low-income and minority borrowers. Marc Savitt, president of the Mortgage Center and testifying on behalf of the National Association of Independent Housing, said the rule caused massive job loss among small mortgage businesses and fewer consumer loan options. “As an active participant in meetings with the FRB during the comment period, it was evident the FRB was unwilling to...

Another bipartisan bill to overhaul the federal mortgage finance system introduced by two House members this week would eliminate but effectively merge Fannie Mae and Freddie Mac, replacing the two GSEs with a “secondary market facility” that would issue and guarantee mortgage-backed securities.The bill, H.R. 2413, the Secondary Market Facility for Residential Mortgages Act of 2011, would create a single entity, owned by the federal government, that would issue MBS. The MBS would have an explicit government guarantee paid for by a guarantee fee set by the Federal Housing Finance Agency.

Sen. Robert Menendez, D-NJ, is considering putting together comprehensive legislation that would reconcile a number of existing mortgage servicing-related bills already introduced in the Senate, according to top industry representatives and other Capitol Hill sources closely following the developments.“There has been some interest expressed by Sen. Menendez’s office in yoking together a lot of different bills in terms of a comprehensive bill,” one informed source confided. “But it’s not clear how much ...

Legislation gaining momentum in Congress to create a covered bond framework still lacks the endorsement of the Federal Deposit Insurance Corp. Analysts note that the FDIC’s concerns need to be addressed for there to be any hope of establishing a non-agency market via covered bonds. Last week, the House Financial Services Committee approved H.R. 940, the U.S. Covered Bond Act of 2011, by a 44-7 bipartisan vote. However, the committee rejected...

If you make your living originating residential mortgages, you’re going to have to be licensed either by the state or by the Nationwide Mortgage Licensing System and Registry under the federal Secure and Fair Enforcement for Mortgage Licensing Act, otherwise known as the SAFE Act, under a new final rule from the Department of Housing and Urban Development. …

The Department of Housing and Urban Development is conducting an in-depth review of mortgage lenders, including those that pose the highest risk, in anticipation of a drastic reduction in the number of FHA lenders because of recent FHA reform measures. Responding to a recent report by the HUD Office of the Inspector General on the FHA lender recertification process, HUD said its Lender Approval and Recertification Division has begun manual reviews of 200 FHA-approved lenders that could potentially spell trouble for the agency. The more detailed reviews are part of HUD’s implementation of a final lender-related rule issued in June last year. The rule increased...