Rep. Darrell Issa, R-CA, chairman of the House Committee on Oversight and Government Reform, is planning to quiz top FHA officials about an apparently deliberate effort by the agency to withhold important information from Congress regarding the true financial health of the FHA insurance fund. In a recent letter to FHA Commissioner Carol Galante, Issa said that the stress test employed by Integrated Financial Engineering in its FY 2012 actuarial review of the FHA Mutual Mortgage Insurance Fund yielded a more troubling result than what HUD reported to Congress in November last year. In the actuarial review, IFE reported that ...

Wells Fargo has reached an agreement with the Department of Housing and Urban Development and fair housing advocacy groups to improve its handling of foreclosed and abandoned homes and resolve allegations of discrimination in the maintenance and marketing of real estate-owned properties. The National Fair Housing Alliance and several other fair housing groups filed a complaint with HUD in April last year after observing that Wells’ foreclosed homes in minority neighborhoods did not receive the same treatment and care as the bank’s REO properties in white neighborhoods. The NFHA, which conducted an ...

HUD Takes Second Furlough. The Department of Housing and Urban Development this week announced the second of seven furlough days employees are scheduled to take due to mandatory, government-wide budget cuts: June 14. Sequestration went into effect March 1 because Congress failed to pass legislation on balanced deficit reduction. HUD employees took their first forced leave on May 24. Approximately $85 billion will be slashed from the federal budget for the remainder of the fiscal year. The next furlough date is July 5. HUD, however, may not need to ...

Mortgage repurchases and indemnifications soared to a whopping $12.83 billion during the first quarter of 2013, a huge anomalous blip in an otherwise moderating trend. As has been the case over the past few years, industry-wide buyback figures were dramatically skewed by one institution’s settlement. Bank of America recorded a whopping $10.45 billion in mortgage repurchases and indemnifications during the first quarter of 2013, according to a new Inside Mortgage Trends analysis ... [Includes one data chart]

Reports of short sales being the new “order of the day” for servicers appear to be overblown. The proclamations were prompted by a report last week from Fitch Ratings. Banks have indeed increased their use of short sales in lieu of loan modifications when completing loss mitigation on non-agency mortgages. Meanwhile, special servicers largely avoid short sales and short sales on agency mortgages are declining. Short sales performed by the bank servicers on mortgages in non-agency mortgage-backed ...

Mortgage industry participants are largely opposed to changes to accounting for credit losses proposed by the Financial Accounting Standards Board in December. FASB proposed replacing the current impairment model, which reflects incurred credit events, with a model that recognizes expected credit risks and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. FASB also aims to reduce complexity by replacing the numerous existing ...

With a turning point in mortgage interest rates and refinance activity in view in the first quarter of this year, banks and thrifts began to mark up the valuations they put on mortgage servicing rights. A new Inside Mortgage Trends analysis of bank call report data shows that the industry serviced some $5.181 trillion of home mortgages for other investors as of the end of the first quarter of 2013. That was down 3.1 percent from the end of last year. As a group, the industry estimated a ... [Includes one data chart]

When Fannie Mae and Freddie Mac were placed in government conservatorships in September 2008, roughly 600 banks and thrifts saw $8 billion of their preferred stock investments in the two GSEs evaporate. With both firms now wildly profitable, there is increasing hope and speculation that buyers of the “junior” preferred stock are in for an eventual payday. No one is more optimistic about that happening than the Independent Community Bankers of America. For the ICBA, the question boils down to how much on the dollar its members will receive for the shares they still own. It’s also a complicated question. When Fannie and Freddie hit the skids at the nadir of the housing bust, many banks and thrifts sold their preferred shares at market rates, that is, at something close to zero. In other words, they no longer have the stock certificates and any ownership rights. Speculators and bottom feeders do.

An increase of 10 basis points in the guaranty fees charged by the government-sponsored enterprises would make pricing for agency execution comparable to pricing for non-agency mortgage-backed security issuance, according to industry analysts. Agency g-fees averaged about 50 bps at the end of 2012, with plans for further increases this year. “The economics of non-agency securitization are much closer to GSE securitizations today than they were two years ago,” according to analysts at Barclays Capital ...

FirstREX is offering a slight wrinkle on “80-10-10” loan structures by taking an equity stake in the home, recording a second lien, while foregoing monthly payments from the borrower. It remains to be seen whether its “HomeBuyer” product will catch fire nationally. The privately held firm is helping consumers buy a home by providing up to half the downpayment. In marketing materials, the company is careful to point out that it isn’t a lender and that its program shouldn’t be construed as being part of a ...