The Federal Housing Finance Agencys Office of Inspector General reported last week that Freddie Mac will increase its repurchase requests to between $0.8 billion and $1.2 billion this year and between $2.2 billion and $3.4 billion overall following its review of the GSEs settlement agreement with Bank of America in January 2011. A year ago the OIG took the FHFA to task for approving what the IG considered a lowball $1.35 billion agreement from BofA to Freddie to settle current and future repurchase claims.
Fannie Mae and Freddie Mac late last week announced another round of changes in the Home Affordable Refinance Program for underwater borrowers, including more liberal repurchase standards that some say may spur lenders to refinance other servicers loans. For HARP loans sold to the government-sponsored enterprises on or after Jan. 1, 2013, repurchase risk will be lowered if the borrower stays current in the loan for 12 months. Under a revised repurchase policy announced last week, representation and warranty risk will be eased for non-HARP loans that stay current for 36 months. Effectively immediately, the government-sponsored enterprises reduced...
Fannie Mae and Freddie Mac support the Consumer Financial Protection Bureaus proposal to institute a higher all in annual percentage rate calculation that would incorporate additional fees and charges one aspect of the larger proposed rule to combine and simplify the consumer mortgage disclosure under the Truth in Lending Act and the Real Estate Settlement Procedures Act. Fannie Mae and Freddie Mac support the bureaus proposal to expand the finance charge for several reasons, the two government-sponsored enterprises said. First, it will make comparison shopping easier for consumers by eliminating the lack of clarity that now leads creditors to treat identical fees differently. Second, a more inclusive finance charge will eliminate...
As federal regulators move to raise Fannie Mae and Freddie Mac guaranty fees for the second time this year, some industry analysts question whether it will help shrink the role of government programs in the mortgage market or simply shift more business to the FHA. Thats a concern, said Meg Burns, senior associate director for housing and regulatory policy at the Federal Housing Finance Agency, during the American Mortgage Conference sponsored by the North Carolina Bankers Association last week. There are discussions all the time about what will FHA do when Fannie and Freddie are raising the g-fees, and whether FHA is actually in position to move the premium charges? Burns noted that the government-sponsored enterprises have...
The Federal Housing Finance Agency is pushing Fannie Mae and Freddie Mac to devise contingency plans to address the potential meltdown of their business partners. The government-sponsored enterprises which are themselves still in business under the conservatorship of the FHFA had placed over 300 high-risk counterparties on watch lists as of the third quarter of 2011, according to a new report by the FHFA Office of Inspector General. The failures of four companies that do business with the GSEs have cost them some $6.1 billion since 2008, and they estimated they still have some $7.2 billion in exposure to high-risk counterparties. The OIG wants...
A trio of industry trade groups is asking a federal appeals court to uphold a nearly century-old law that grants federal-court jurisdiction to civil lawsuits against any U.S. corporation in which claims arise from international banking or banking transactions in a U.S. territory. Last week, the Securities Industry and Financial Markets Association, New York Bankers Association and California Bankers Association filed an amicus brief with the U.S. Second Circuit Court of Appeals on behalf of Bank of America in its MBS lawsuit with American International Group. AIG filed...
The government-sponsored enterprises guaranty fees will increase by an average of 10 basis points in the coming months as the Federal Housing Finance Agency works to align agency pricing with the private market. An increase earlier this year brought interest rates on agency mortgages slightly closer to the rates on non-agency jumbo mortgages but industry analysts suggest that the conforming loan limits have a greater impact on the market share for non-agency originations. These increases will move [GSE] pricing ...
The eminent domain proposal from Mortgage Resolution Partners will either painlessly help thousands of non-agency borrowers or severely harm the non-agency market, according to industry participants. The newly expanded plan could even hinder efforts to revive the non-agency market going forward, according to MRPs opponents. Eminent domain is an important method for mitigating losses to investors, Graham Williams, CEO of MRP, said in a comment letter last week to the Federal Housing Finance Agency ...
The Federal Housing Finance Agency and the National Credit Union Administration recently filed separate lawsuits seeking repurchases of mortgages in non-agency mortgage-backed securities. The FHFA lawsuit filed in August against DB Structured Products relates to ACE Securities Corp. Home Equity Loan Trust, Series 2006-FM1, which Freddie Mac purchased in August 2006. The FHFA did not disclose the size of Freddies investment. And last week the NCUA filed a lawsuit against UBS Securities ... [Includes three briefs]
SunTrust Banks, Inc. is planning to shift $3 billion of loans, including an undetermined number of delinquent Ginnie Mae loans and other nonperforming loans, to its held-for-sale portfolio and record a $375 million provision for mortgage repurchases in the third quarter of 2012. The moves are expected to strengthen SunTrusts mortgage portfolio and put the company in a better position by improving its risk profile and balance sheet and stabilizing its capital ratios. The $3 billion transfer of loans to the held-for-sale (HFS) category will include ... (1 chart)