A North Carolina federal magistrate has recommended that a Justice Department fraud case against Bank of America be dismissed, but he also said a separate Securities and Exchange Commission lawsuit against the bank based on a different federal law should proceed. The DOJ last August filed suit against BofA under the Financial Institutions Reform, Recovery and Enforcement Act, accusing the bank of defrauding investors in the sale of $855 million of non-agency MBS. Last week, U.S. Magistrate David Cayer of the U.S. District Court for the Western District of North Carolina found that the government failed to prove the bank made “material” false statements to the former Federal Housing Finance Board. The DOJ claimed...
The Securities and Exchange Commission late last week gave the securities industry another month to file comments on a proposed rule that most participants already know they don’t like. Comments were originally due March 28 on the SEC’s latest proposal to require asset-backed securities issuers to make loan-level details about pending issues available to investors on their own websites, rather than the agency’s Electronic Data-Gathering, Analysis and Retrieval system. On the day the comment period ended, the SEC extended it to April 28. Many issuers and large banks think...
In its heyday, S&P used to rate more than 90 percent of new issuance of non-agency MBS, but in 2013 it accounted for just 40.0 percent of the market by dollar volume.
The CFPB appears to be having a hard time holding on to some of its top officers who are leaving for more lucrative jobs in the private sector. Then again, no one really expected the government agency to have much luck competing against the deep pockets of megabanks like Wells Fargo. This month alone, Wells Fargo recruited two bureau executives who were considered among its very best, at least in the mortgage space: Lisa Applegate, who was in charge of mortgage rule implementation at the agency, and Pete Carroll, assistant director for mortgage markets.
The Republican-controlled House Financial Services Subcommittee on Oversight and Investigations plans to hold a hearing on allegations of discrimination and retaliation within the CFPB on the morning of April 2, 2014. “Committee staff has received corroborating information from a CFPB employee who alleges she has experienced gender discrimination and retaliation for filing an Equal Employment Opportunity complaint with the CFPB’s Human Capital Office,” said a committee memorandum accompanying the committee’s announcement.
The CFPB and five other federal financial regulators issued a proposed rule last week that would implement minimum requirements for state registration and supervision of appraisal management companies. The minimum requirements would apply to states that voluntarily elect to establish an appraiser certifying and licensing agency with the authority to register and supervise AMCs. Under the proposed rule, participating states would require that an AMC register in the state and be subject to its supervision, and use only state-certified or licensed appraisers for federally related transactions, such as real estate-related financial transactions overseen by a federal financial institution regulatory agency that require appraiser services.
Lowering Fannie Mae and Freddie Mac loan limits is one of the easiest levers the federal government could pull to increase non-agency participation in the mortgage market but most market participants favor keeping them at their current levels. In December, the Federal Housing Finance Agency announced that it was considering reducing the loan “purchase limits” for the government-sponsored enterprises. Under the plan, the GSEs could not purchase loans exceeding ...
In the end, it's all about yield, which is why investors are going after "esoteric" ABS. Will non-prime MBS ever stage a comeback, even a mini-comeback?
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