The $25.0 billion settlement involving five bank servicers includes refinance eligibility requirements that differ from the settlement’s loan modification program. Only portfolio loans are eligible to meet the settlement’s refi requirements, unlike the mod program, which includes portfolio loans, mortgages in non-agency mortgage-backed securities and FHA loans. Under the pending settlement with 49 state attorneys general and the federal government, Ally Financial, Bank of America, Citigroup, JPMorgan Chase and Wells Fargo must dedicate $2.78 billion toward refis for certain borrowers with negative equity ...

The Securities and Exchange Commission this week filed a lawsuit against three former executives of Thornburg Mortgage regarding disclosure and accounting issues in early 2008. The former executives of the now bankrupt jumbo lender denied the charges and vowed to prevail in court. “Thornburg’s executives schemed to drop a disingenuous annual report into the public realm at the most opportune moment possible while knowing it was merely the calm before the next storm,” said Donald Hoerl, director of the SEC’s Denver regional office. Larry Goldstone and Clay Simmons, the former CEO and chief financial officer of Thornburg, respectively, countered that ...

RPM Mortgage announced last week that it is offering jumbos with balances of up to $2.5 million for no-limit cash-out refinances or home purchase. Fully amortized and interest-only payment options are available. The lender said it will hold the loans in portfolio. “Between extremely low interest rates and smart prices for homes, either on the move-up market or creating liquidity for investment purposes, this product has the ability to serve both types of borrowers,” said Rob Hirt, CEO of RPM Mortgage. “This exclusive RPM product was eleven months in the making and is our contribution toward helping the real estate market to get back on its feet.” [Includes three briefs]

Flagstar Bank’s recent $133 million settlement with the Department of Justice to resolve fraudulent FHA lending practices could increase lender overlays on the FHA product, resulting in fewer borrowers being able to qualify for an FHA-insured loan, according to analysts. The Flagstar settlement, which came in the wake of the $25 billion national settlement between servicers and state and federal agencies, exacerbates the situation for lenders that already have previous concerns about the severity of FHA fines, including treble damages, for violations of FHA’s highly complex and technical rules, analysts said. Whatever relief FHA lenders may have drawn from the robo-signing settlement was ...

Industry experts digging through thousands of pages of legal documents associated with the $25 billion foreclosure settlement agreed to by five major servicers mostly found what they expected: a complex package of mixed forms of borrower support that the banks are expected to implement sooner rather than later. The settlements involving Bank of America, Wells Fargo, JPMorgan Chase, Citigroup and Ally Financial and 49 state attorneys general will have to be approved by the U.S. District Court in Washington, DC. Although critics found grounds for complaint about the varying incentives for loan modification and...

Dividend payments paid by Fannie Mae and Freddie Mac to the U.S. Treasury for its continued financial support held down the two government-sponsored enterprises during the fourth quarter as Freddie would have otherwise posted a profit, while Fannie narrowed its losses during the final three months of 2011. Freddie actually reported $619 million in net income during the fourth quarter of 2011, compared to the third quarter’s net loss of $4.4 billion, before having to repay $1.7 billion in preferred stock dividends to the government. Under the terms of the GSEs’ purchase agreement, the Treasury is entitled...

The two sibling GSEs experienced a divergent earnings period during the fourth quarter of 2011, as Freddie Mac posted a quarterly gain, on paper anyway, while Fannie Mae announced losses, albeit at a slower pace, in a year that drove both companies even deeper into the red.Freddie posted net income of $619 million during the three month period ending Dec. 31, 2011, compared to a net loss of $4.4 billion during the third quarter. For the full year, the company reported a net loss of $5.3 billion, compared to a net loss of $14.0 billion for the full-year 2010.

A legislative effort to extend Fannie Mae and Freddie Mac’s guarantee fee hike beyond 2021 to pay for the Gulf Coast cleanup was averted this week following some behind-the-scenes lobbying, but industry insiders remain wary of future attempts by lawmakers to milk the GSEs for cash. An amendment to the Restore the Gulf Coast Act of 2011 would have used revenue generated from GSE g-fees to help pay for the continued clean up from the BP Gulf Coast oil spill. Sponsored by Sens. Mary Landrieu, D-LA, and Richard Shelby, R-AL, the bill would establish a trust fund paid for partly by fines levied against the oil company.

The advance business for the 12 Federal Home Loan Banks continued to shrink again in 2011, dropping 12.6 percent from the previous year to $418.2 billion, according to preliminary figures released by the FHLBank Office of Finance. However, advances did increase slightly from the third to the fourth quarter. The overall 2011 decline came through “continued low demand by member institutions resulting from high levels of liquidity in the market, as well as high levels of deposits and low loan demand experienced at member institutions,” the OF explained.

Fannie Mae said last week that it acted first to end its existing mortgage loan delivery contract with Bank of America because of delays in resolving repurchase issues. The GSE’s account in its quarterly filing with the Securities and Exchange Commission is at odds with BofA’s announcement two weeks ago where the bank announced in its own SEC filing that it has stopped selling to Fannie due to “increasingly inconsistent” repurchase requests by the enterprise compared to past practice.