U.S. Military Personnel Continue to Report Problems With Their Mortgages. Complaints to the CFPB from American military personnel about their mortgages rose 10 percent from 2014 to 2015, according to a recent report from the bureau. The good news for mortgage lenders is that total complaints about their operations – roughly 9,900 – were less than half of the total generated by debt collection practices, which came to about 20,500. ... FHFA Wants Public Input on National Mortgage Borrower Survey. The Federal Housing Finance Agency is seeking public comments about the American Survey of Mortgage Borrowers, an information collection effort otherwise known as the National Survey of Existing Mortgage Borrowers. ...

Fannie Mae and Freddie Mac purchased $127.7 billion of single-family loans last year that failed to meet the baseline qualified-mortgage standard set by the Consumer Financial Protection Bureau, according to a new analysis by Inside The GSEs. Under the agency’s ability to repay rule, the GSEs can ignore the restriction that qualified mortgages must have a debt-to-income ratio of 43 percent or less. This so-called agency “patch” was set up to last for seven years, or until 2021, as long as Fannie and Freddie remain in conservatorship or receivership. In other regards, such as the 30-year limit on maximum loan term and the prohibition on interest-only payments, the GSEs...

The idea of constructing a national highway system of sorts for the mortgage market by merging the GSEs into one has been making its rounds in the industry this week. And there’s been some dispute as to whether the plan is feasible. Five mortgage industry veterans – including two who worked in the Obama White House – floated the new plan aimed at preserving the government guaranty on conventional mortgage-backed securuties and finally ending the uncertainly plaguing the secondary market. Tim Howard, former Fannie CFO who left the GSE in 2004 and was involved in litigation regarding his tenure there, said the authors “greatly underplay the dangers of making a $10 trillion market...

The relatively new “A More Promising Road to GSE Reform” plan from five industry veterans is getting a hearing in Congress – but only informally. According to at least one of the plan’s authors, the white paper has been passed on to key members of the House and Senate committees that oversee Fannie Mae and Freddie Mac, including staffers for Rep. Jeb Hensarling, R-TX, who chairs the House Financial Services Committee. “We’re getting a lot of interest in this,” said Mark Zandi, chief economist for Moody’s Analytics, and one of the white paper’s five authors. (Zandi said he has not met with Hensarling’s staff, though another...

The Federal Housing Finance Agency announced last week that it’s mulling over the idea of allowing principal reductions for underwater homeowners and it expects to make a decision, one way or the other, within the next couple of weeks But some say if implemented, the overall impact will be fairly muted. Back in 2012, the agency decided that limited principal reduction could save Fannie Mae and Freddie Mac money, but the plan didn’t have the support of former Acting Director Ed DeMarco, who said it could encourage voluntary loan defaults. Since that time, FHFA Director Mel Watt revealed in a recent speech last week that he’s been...

Although nonconforming mortgage seller/servicers have been faced with numerous headaches in the secondary market because of TRID errors, that’s not the case over in the GSE camp. TRID became effective on Oct. 3 2015 and the GSEs amended their contractual obligations with customers so that they know they are responsible for any losses due to violations of the TRID rule. “They’re basically turning what was a repurchase obligation into an indemnification obligation. They don’t have to be the arbiter of what’s valid or invalid,” said John Levonick, head of compliance at Clayton Holdings, in a recent phone interview. “The whole industry on the...

California, the largest mortgage market in the U.S., padded its lead by posting a 39.7 percent increase in GSE business last year, topping the 29.8 percent growth in overall Fannie Mae and Freddie Mac activity, according to a new Inside The GSEs analysis. The Golden State accounted for 22.6 percent of loans sold to the GSEs in 2015 and, not surprisingly, 62.7 percent of conforming-jumbo mortgages. In California, the average Fannie/Freddie loan was $310,185, trailing only Hawaii and the District of Columbia in size. Purchase mortgages accounted for just 29.0 percent of California GSE business last year, roughly a third less than...

United Guaranty, the market leader in private mortgage insurance – and a key partner of the GSEs – made it official this week, filing for an initial public offering of common stock in a transaction valued at $100 million. UG’s parent company American International Group will retain ownership of 80.1 percent of the firm, with the public getting the balance. As the company notes in its IPO documents, Fannie Mae and Freddie Mac must approve the spin-off. But when that will happen remains unclear. No specifics are addressed in the S-1 filing with the Securities and Exchange Commission and a spokesman for UG declined to comment on the matter.

A letter from 45 Congressmen that circulated in early March urging the Federal Housing Finance Agency and the Department of Housing and Urban Development to reform their nonperforming loan programs prompted two committee chairs to ask the agencies to reject the changes. They said the proposals are only “advancing political agendas.” Rep. Jeb Hensarling, R-TX, chairman of the House Financial Services Committee and Richard Shelby, R-AL, chairman on Banking, Housing and Urban Affairs Committee, penned a letter to the FHFA and HUD on March 21 stating that many of the changes suggested by housing advocates and Congress would negatively impact the program’s fundamental purpose.

The Federal Housing Finance Agency’s oversight of GSE compensation based on scorecard performance was found to be “insufficiently robust,” according to the FHFA’s Office of Inspector General, but the agency disagreed. A recently released report found that the agency accepted the GSEs’ annual at-risk compensation proposals without any verification or challenge for accuracy. The OIG said while in 2011 the FHFA said it had adopted internal controls to test and verify procedures to improve the oversight of compensation for Fannie Mae and Freddie Mac executives; it learned that the FHFA discontinued that system in 2012 after adopting a new GSE executive compensation structure.