Mortgage servicers could find themselves in a quandary as they implement the national servicing standards outlined in the March foreclosure settlement agreement, especially if they run into conflicting FHA requirements. Compliance experts say that while many of the settlement standards could be carried out within the FHA program without being at odds with existing FHA requirements, conflicts do exist with the guidelines that cannot be resolved. Even when it is technically possible to comply with both FHA guidelines and the settlement standards, it is still going to ...

The Federal Housing Finance Agency’s non-agency mortgage-backed security repurchase claims against UBS can proceed, according to a ruling last week by U.S. District Judge Denise Cote in Manhattan federal court. The decision could also be applied to the other 16 lawsuits the FHFA filed against non-agency MBS issuers. Among other issues, the ruling refuted claims ... [Includes two briefs]

“The private market will never come back if the best deal for the private investor is the government,” Lewis Ranieri, chairman and founding partner of Ranieri Partners, said this week at the Mortgage Bankers Association’s National Secondary Market Conference in New York City. Talk at the conference focused on almost anything other than activity in the non-agency market. David Stevens, president and CEO of the MBA, said dealing with repurchase issues ...

The retained mortgage investment portfolios of Fannie Mae and Freddie Mac have been reliable generators of net income over the past few years, but the government-sponsored enterprises continue to shrink the profit centers under the terms of their federal bailout. Fannie and Freddie held a combined $1.310 trillion in mortgage-related investments at the end of the first quarter of 2012, down 3.8 percent from the previous quarter. The GSEs’ combined portfolios were down 9.6 percent from the same period in 2011; their agreements with the Treasury Department call for annual...(Includes one data chart)

The massive legal action initiated by the Federal Housing Finance Agency last summer against many of the nation’s biggest lenders has survived its first legal challenge relatively unscathed following a federal judge’s rejection of the defendant’s motion to dismiss. Judge Denise Cote of the U.S. District Court for the Southern District of New York last week denied UBS Americas’ motion to dismiss on statute of limitations grounds. The ruling permits the FHFA to proceed full steam ahead with its claim that UBS violated federal securities laws by misleading Fannie Mae and Freddie Mac into purchasing $6.4...

The Mortgage Bankers Association is pushing a proposal to change the remittance schedule on Freddie Mac participation certificates and make them fully fungible with Fannie Mae pass-through MBS for good delivery under to-be-announced guidelines. The proposal would address the historical discount to Fannie MBS at which Freddie securities trade, said MBA President Dave Stevens during the group’s National Secondary Market Conference in New York this week. Freddie PCs typically trade 1 or 1.5 points behind Fannie MBS, a difference that Freddie Mac – and ultimately U.S. taxpayers, now that the government-sponsored...

Private MI officials say FHA pricing changes have helped the industry regain some market share from the agency, but future gains may depend on how the federal government eventually changes its role in the mortgage market. After its most recent pricing adjustment in April of this year, the FHA does not expect to make further changes in its insurance premiums, said Charles Coulter, deputy assistant secretary at the FHA, during this week’s secondary market conference sponsored by the Mortgage Bankers Association. “We are an average pricer, and that alone creates opportunities” for private MIs, he said...

Senate Democrats are drafting legislation to force Fannie Mae and Freddie Mac to expand the Home Affordable Refinance Program for underwater borrowers even farther beyond the newly unveiled HARP 2.0. The draft legislation by Sens. Robert Menendez, D-NJ, and Barbara Boxer, D-CA, unveiled last week during a subcommittee hearing would force the GSEs to waive representations and warranties on new HARP loans regardless of whether the refi lender serviced the previous mortgage.

A national consumer advocacy group, whose own investigation of FHA credit overlays spurred a federal probe of nearly two dozen FHA lenders, said it is keeping an eye on Fannie Mae’s and Freddie Mac’s use of loan-level price adjusters as a potential discriminatory lending practice. The National Community Reinvestment Coalition said it’s still waiting to hear from the Department of Housing and Urban Development about the results of multiple investigations HUD launched in December 2010 after NCRC found that 22 lenders set borrower credit scores as high as 640 for FHA loans, even though the FHA guarantees loans with scores as low as 580.

Fannie Mae announced this week it can change pricing and other terms under purchase agreements and mortgage-backed securities contracts with lenders should the GSE deem it necessary. According to the alert to servicers, Fannie is asserting its right to change pricing terms under standard purchase agreements, master agreements or mortgage securitization contracts. For any contracts and agreements entered into on or after May 1, Fannie said it reserves the right to change pricing “one or more times” during the term. Such changes may include the base guaranty fee, loan-level price adjustments and guaranty-fee adjustments on mortgages delivered under mortgage-backed securities contracts or as whole loans.