The Inspector General of the Federal Housing Finance Agency told senators last week that the FHFA still doesn’t have enough examiners, in his opinion, to sufficiently regulate the GSEs, while the Finance Agency head noted that the FHFA has added more than 200 staffers since 2008, with just a bit more hiring planned. Testifying before the Senate Banking, Housing and Urban Affairs Committee, FHFA IG Steve Linick said that the Finance Agency is making progress on a number of fronts, including GSE assets and implementing the OIG’s audit and evaluation recommendations. However, following a 2011 OIG report which identified “shortfalls” in the FHFA’s examination coverage due to examiner shortages, the FHFA has made progress by “reorganizing the examination function and hiring new staff [but] it is not clear that the FHFA has achieved adequate resources.”
The Federal Housing Finance Agency is soliciting comments from the public on how its regulations may be “more effective and less burdensome.” The FHFA’s call for comments in a April 19 publication of the Federal Register is in keeping with a 2011 executive order that calls for each independent regulatory agency, including the FHFA, to analyze its existing regulations and “modify, streamline, expand or repeal them,” as well as to make public a plan to periodically review its “existing significant regulations” to make the agency’s regulatory program “more effective or less burdensome” in achieving regulatory objectives.
The Federal Home Loan Bank of Cincinnati says a unit of Lehman Brothers Holdings is not entitled to a multimillion dollar payday because the FHLBank did not short change the firm when it closed out swaps and options transactions ahead of Lehman’s 2008 bankruptcy. Last week, Lehman filed a breach of contract lawsuit in Manhattan federal court connected to 87 derivative transactions or interest-rate swaps with the FHLBank that fell apart when Lehman entered bankruptcy on Sept. 15, 2008, at the height of the financial crisis.According to its lawsuit, Lehman says the Cincinnati Bank violated its agreement by paying only $13.7 million when the transactions were terminated due to the firm’s Chapter 11 filing.
The Federal Housing Finance Agency announced the appointment of a long-time staffer to oversee the FHFA’s supervision of the 12 Federal Home Loan Banks. Fred Graham, most recently the FHFA’s acting deputy director of the Division of Supervision Policy and Support, immediately assumed his new responsibilities as the agency’s deputy director of the Division of the Federal Home Loan Bank Regulation following the FHFA’s announcement earlier this month.
One week after UBS Americas failed in its bid to shutter a lawsuit brought by the Federal Housing Finance Agency in connection with non-agency mortgage-backed securities purchased by Fannie Mae and Freddie Mac, the federal judge overseeing the case has ordered UBS to hand over internal documents to the FHFA the company argued were privileged. U.S. District Court Judge Denise Cote ruled last week that parts of memoranda from UBS’ outside counsel to the company which contained factual summaries of meetings held with third-party mortgage originators are not protected by attorney-client privilege and must be disclosed to the FHFA. “Even if it is true, as UBS argues, that the memoranda at issue were created for the ‘predominant purpose’ of rendering legal advice, that does not relieve UBS of the obligation to show that the entirety of each document is privileged,” wrote Judge Cote in her ruling.
Freddie Mac is getting the word out early that it is phasing out its software for managing delinquent home loans with plans to discontinue the service altogether next year. The company has already stopped registering new customers for EarlyIndicator, Freddie’s Windows-based program used to predict loan delinquency. "To provide users with time to transition, we are letting them know we are retiring EarlyIndicator one year in advance,” Freddie said in its announcement earlier this month.
Fannie Mae is making it easier for small and medium-sized lenders to deliver electronic mortgages to the government-sponsored enterprise. “Currently, lenders are required to obtain a variance to their master agreement in order to deliver electronic mortgage loans (eMortgages) to Fannie Mae,” the GSE said in a recent selling guide announcement. “Fannie Mae would like to expand...
Private mortgage insurers provided coverage on some $8.2 billion of mortgages securitized by Fannie Mae and Freddie Mac during the first quarter of 2013 that had loan-to-value ratios exceeding 105 percent, according to a new Inside Mortgage Finance analysis of loan-level data. Private MIs had little choice in the matter since the Home Affordable Refinance Program allows underwater borrowers to refinance without getting additional MI, or any mortgage insurance if the original loan wasn’t insured. In fact, Fannie and Freddie securitized a total of $27.1 billion of mortgages with LTV ratios over 105 percent, most of which did not have insurance. But most private MI coverage was placed...[Includes one data chart]
Home lenders funded $500 billion worth of new mortgages in the first quarter, a strong showing, but down 5 percent from the fourth quarter. Quicken Loans had the strongest growth rate among the top 10.
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