DOJ’s initial penalty calculation was based on the gross loss to Fannie and Freddie from the default of the loans, but now the government says the court should use gross gain, instead of net gain to set the maximum allowable penalty.

A Manhattan federal bankruptcy court this week approved Lehman Brother’s proposed $2 billion-plus settlement that would end an $18.9 billion claim filed against the defunct investment bank by Fannie Mae over soured mortgage securities. Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York, signed off on the settlement agreement between Lehman Brothers Holdings Inc. and the government-sponsored enterprise, as well as Lehman’s wholly owned subsidiaries Aurora Commercial Group and Aurora Loan Services. ALS was a large Alt A lender/servicer. The deal grants...

Issuance of non-agency mortgage-backed securities is expected to remain constrained until a number of issues are sorted out, from reform of the government-sponsored enterprises to an increase in demand from investors. “The non-agency MBS market is stuck somewhat in limbo until we know where the GSEs are going,” said Steven Abrahams, head of securitization and MBS research in the U.S. at Deutsche Bank Securities, during last week’s ABS Vegas conference. More than 5,600 people registered ...

Spurred by low interest rates and strong house price appreciation, Home Equity Conversion Mortgage loan originations rose 20.3 percent during the first nine months of 2013 compared to the same period the year before, according to Inside FHA Lending’s analysis of FHA snapshot data. HECM lenders reported $11.8 billion in total originations over the nine-month period, with initial principal amount at loan origination totaling $7.8 billion. Purchase reverse mortgage loans comprised 94.5 percent while fixed-rate mortgages accounted for ... [1 chart]

The Department of Housing and Urban Development will accept electronic signatures on FHA loan documents provided the lender complies with the department’s latest e-sign guidelines. E-signatures are voluntary under current HUD rules. Effective immediately, however, HUD will accept such signatures on FHA paperwork relating to mortgage insurance, servicing and loss mitigation, FHA insurance claims, HUD real estate-owned sales contracts and related addenda as long as they meet the new requirements. The new policy applies to all FHA forward mortgages and Home Equity Conversion Mortgage loans. HUD will treat eligible e-signatures as ...

California lenders and realtors will appeal to the Department of Housing and Urban Development to reconsider changes in the FHA 2014 loan limits. Lenders doing business in counties that have been hard hit by the loan-limit changes are reportedly gathering data to support future requests to HUD to recalculate loan limits for a specific local area. An industry source said lenders in the Riverside-San Bernardino-Ontario housing market are gearing up to petition HUD to recalculate the FHA loan limits in those areas. Specifically, the median sales price for a one-unit property in the affected areas fell ...

The Senate this week passed bipartisan legislation that would delay unforeseen, excessive flood-insurance premium hikes for FHA and conventional mortgages nationwide. S. 1926, the Homeowner Flood Insurance Affordability Act, passed by a vote of 67 to 32, as amended. Introduced by Sens. Robert Menendez, D-NJ, and Johnny Isakson, R-GA, the bill would delay rate increases for up to four years by giving the Federal Emergency Management Agency time to study the problem and develop a plan to help homeowners who cannot afford higher premiums. The increases were mandated by the Biggert-Waters Flood Insurance Reform Act, which Congress ...

Ginnie Mae is considering lengthening the approval time for transfers of mortgage servicing rights (MSRs) to 90 days or more from the current 30 days but has yet to issue guidance. The agency alerted sellers of MSRs and their investment banking advisors of the forthcoming change in late November at an “education summit” in Washington, according to a participant, who preferred anonymity. New and existing issuers participated in the event, and a copy of Ginnie Mae’s presentation was provided to Inside Mortgage Finance, an affiliated publication. Ginnie Mae declined to comment on the report. However, according to the presentation, the reason for ...

VA Lenders’ Compliance with CFPB’s Ability-to-Repay and Qualified Mortgage Rules. Until the Department of Veterans Affairs’ rule on ATR/QM is in place, all VA lenders must comply with the requirements of the Truth in Lending Act, as established by the Consumer Financial Protection Bureau’s ATR/QM rule, according to a recent agency guideline. VA will continue to guarantee all loans made in compliance with existing VA requirements, regardless of their QM status, the agency clarified. It urged lenders to refer to the CFPB guidance to ensure all their VA loans are ...

Inside Mortgage Finance makes it official: residential originations tanked in the fourth quarter, but certain nonbanks gained at the expense of the largest players.