A nearly decade-long class-action fraud lawsuit on behalf of Fannie Mae investors and the GSE’s accountant KPMG LLP has been put to rest following the approval of a federal court judge earlier this month. In papers filed with the U.S. District Court of the District of Columbia, Judge Richard Leon said he found the $153 million settlement and plan for distributing it among the more than one million class members was “fair, reasonable and adequate.” Two Ohio pension funds – the Ohio Public Employees Retirement System and the State Teachers Retirement System of Ohio – filed suit in 2004 related to a $6.3 billion overstatement of earnings against Fannie and three former GSE executives, including then-CEO Franklin Raines.
PNC Financial Services will pay Freddie Mac $89 million to put to bed all buyback liabilities on home loans sold to the GSE in the years leading up to the mortgage-market meltdown, the lender announced earlier this month. The settlement resolves certain PNC repurchase obligations for both existing and future claims for approximately 900,000 loans that were sold to Freddie between 2000 and 2008. The $89 million payout, less credits of $8 million, will also be used to compensate Freddie for any losses that the GSE incurred in the past or any other losses that may result in the future, said PNC.
Despite an increase in primary market mortgage rates during the third quarter of 2013, banks and thrifts were cautious in raising the valuations they placed on their mortgage servicing rights, according to a new Inside Mortgage Trends analysis of call-report data. Banks and thrifts serviced $4.770 trillion in mortgages for the benefit of other investors, typically as a result of securitization. As an industry, they assigned a fair-market value of $48.4 billion for these assets ... [Includes one data chart]
Although the plague of mortgage buybacks generally grew less severe during the third quarter of 2013, a new Inside Mortgage Trends analysis of repurchase disclosures by Fannie Mae and Freddie Mac shows that the industry continues to grapple with legacy years leading up to the housing market collapse. At the end of the third quarter, loans securitized by the two government-sponsored enterprises in 2007 accounted for 36.9 percent of pending and disputed buyback demands. Loans securitized ... [Includes two data charts]
Increases to the guaranty fees charged by the government-sponsored enterprises could prompt some changes for lenders. While execution with the GSEs will remain more attractive than issuing non-agency mortgage-backed securities, new loan-level pricing adjustments could shift some business to portfolio and to the FHA. The Federal Housing Finance Agency last week announced changes to GSE MBS g-fees that will amount to an average increase of approximately 11 basis points, to be implemented in March and April ...
The government-sponsored enterprises Fannie Mae and Freddie Mac are stepping up their development of a standardized dataset to support the Consumer Financial Protection Bureau’s recently finalized consolidated closure disclosure forms – a project that could represent a tipping point in the mortgage industry’s use of electronic mortgages, technology vendor representatives say. The GSEs’ common industry dataset that supports the CFPB’s form is called the Uniform Closing Dataset, and is one component of ...
The trend of deconsolidation among mortgage lenders is likely to reverse due to the advantages of large lenders, according to projections from Fannie Mae. “The recent decline in large-lender share of the primary market is temporary, and principally a result of cyclical factors that caused larger lenders to pull back from the market,” said Gerry Flood, director of strategic planning in Fannie’s economic and strategic research division. Flood cautioned that the projections don’t take ...
With residential originations expected to fall by 25 percent next year, some mortgage executives are predicting grim news in terms of new hiring, especially in any field tied to loan production. But as always, there are always a few “silver linings” in any downdraft, mortgage banking being no exception to the rule. A handful of firms say they are still aggressively recruiting residential loan officers who have a solid background in purchase-money lending – that is, sales professionals with deep ties to ...
Bexil American Mortgage partnered with a private real estate investment trust to launch a correspondent program. Meanwhile, New Jersey filed a lawsuit against Credit Suisse regarding non-agency mortgage-backed securities issued before the financial crisis.
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