Fannie Mae announced last week that it is amending its guidance regarding custodial bank accounts, effective immediately. Prior to the companys Aug. 15 servicing guide announcement, tax and insurance escrow funds for Fannie mortgage loans with all remittance types could be commingled in the same custodial account, although the servicer could establish separate accounts for T&I payments for each remittance type if it chose to do so.
Fannie Mae and Freddie Macs newly amended preferred stock purchase agreement with the U.S. Treasury requiring the companies to accelerate the rate at which they reduce their investment portfolios will have little immediate impact but will become more challenging to the GSEs as time goes on, analysts predict. The Treasurys amended agreement calls for the GSE portfolios to be wound down at an annual rate of 15 percent, instead of the 10 percent annual reduction originally required of the two companies. The more aggressive 15 percent reductions will go into effect in 2013. Consequently, Fannies and Freddies portfolios must be reduced to the $250 billion target by 2018, four years earlier than initially scheduled.
Half a dozen federal regulators last week, including the Federal Housing Finance Agency, issued inter-agency proposed new appraisal requirements for certain “higher-risk mortgage loans.” The proposed rule, required by Dodd-Frank Act revisions to the Truth in Lending Act, applies to loans for which the annual percentage rate exceeds the average market rate by 1.5 percent for first-lien loans, 2.5 percent for first-lien jumbo loans, and 3.5 percent for subordinate-lien loans.
The Federal Housing Finance Agency this week announced that Fannie Mae and Freddie Mac will implement new short sale guidelines that expand eligibility criteria, as well as align and consolidate existing GSE short sales programs into one standard offering. The new guidelines, which go into effect Nov. 1, will permit homeowners with a Fannie or Freddie mortgage to sell their home in a short sale even if they are current on their mortgage, provided they have an eligible hardship.
The Treasury Departments surprise announcement late last week that it will now sweep up any and all future profits from Fannie Mae and Freddie Mac in lieu of the dividends the GSEs had been paying in return for taxpayer support solves some problems but creates new ones, industry observers say. Rather than continue to borrow from the Treasury to make dividend payments to the Treasury as the GSEs have since they were placed in conservatorship in September 2008 the revised preferred stock purchase agreements will replace the 10 percent quarterly dividend with a full income sweep of every dollar of profit that each firm earns going forward, according to Michael Stegman, counselor to the Treasury for Housing Finance Policy.
Plans to hasten the resolution of Fannie Mae and Freddie Mac through an amended preferred stock purchase agreement (PSPA) announced last week by the Treasury Department and the Federal Housing Finance Agency has elicited mixed responses from stakeholders. Views vary as to whether the new deal will actually benefit taxpayers or simply protect holders of government-sponsored enterprise debt. The revised agreement will speed up the reduction of both GSEs investment portfolios, from an annual rate of 10 percent to ...
Six federal financial regulatory agencies have put out a proposal to establish new appraisal requirements for mortgage loans deemed to be higher risk. The Dodd-Frank Act generally defines a higher-risk mortgage as a closed-end consumer credit transaction secured by a principal dwelling with an annual percentage rate exceeding certain statutory thresholds (1.5 percent for first-lien loans, 2.5 percent for first-lien jumbo loans, and 3.5 percent for subordinate-lien loans). Qualified mortgages will be exempt from this...
The Federal Housing Finance Agency became the biggest opponent of proposals for local governments to use eminent domain to seize underwater loans from non-agency mortgage-backed securities. FHFA has determined that action may be necessary on its part to avoid a risk to safe and sound operations at its regulated entities and to avoid taxpayer expense, the conservator of the government-sponsored enterprises said in response to the proposed use of eminent domain to forgive principal on mortgages ...
The Department of Housing and Urban Development is looking into SunTrust Banks FHA-related lending practices, the bank reported in its latest regulatory filing. SunTrust, Atlantas largest bank, disclosed the investigation in its second-quarter filing with the Securities and Exchange Commission but provided no additional details. HUD notified the bank of the probe on April 25. SunTrust said it is cooperating with the investigation, which is being conducted by HUDs Office of the Inspector General. The bank did not respond to a request for comment and the IG office neither ...
A three-judge federal panel this week agreed to hear a rare interlocutory appeal by one of the defendants in a series of lawsuits that the Federal Housing Finance Agency has filed in connection with non-agency MBS purchased by Fannie Mae and Freddie Mac. The Second Circuit Court of Appeals accepted UBS Americas appeal, which had been certified by Judge Denise Cote of the U.S. District Court of New York in late June. UBS seeks to re-argue and reverse Judge Cotes May 4 denial of the banks motion to dismiss on statute of limitation grounds. The FHFA sued...