HUD Delays Implementation of Short-Sale Participation Requirement. The implementation of the PFS Participation Requirement, which is found in Mortgagee Letter 2013-23, Updated Pre-Foreclosure Sale and Deed-in-Lieu-of-Foreclosure Requirements, has been delayed indefinitely. All other provisions included in the mortgagee letter remain in effect. Previous guidance on short-sale participation requirements also remain in effect until further notice. FHA to Consolidate Lender ID Numbers. The FHA will consolidate the lender identification numbers of those participating in both the FHA Title I and Title II programs, provided ...

Six federal regulators, including the Federal Housing Finance Agency, re-proposed risk-retention requirements, as well as the definition for qualified residential mortgages this week, making significant changes that had been sought by lenders. The new proposal revises a proposed rule the agencies issued in 2011 to implement the risk-retention requirement of the Dodd-Frank Act. Among other things, the rule would recognize the full guaranty on payments of principal and interest provided by Fannie Mae and Freddie Mac for their residential mortgage-backed securities as meeting the risk-retention requirements while the two GSEs are in conservatorship or receivership and have capital support from the federal government.

The Federal Housing Finance Agency, after months of interviewing executive search firms, has hired the Washington-based Spencer Stuart to find a chief executive to man the helm of the “common securitization platform” project being developed by the two government-sponsored enterprises. According to sources familiar with the regulator’s plans, the starting salary for the job is in the range of $450,000, plus benefits. Sources say FHFA has handed...

More than a year after it was issued under court-ordered duress, the Federal Housing Finance Agency has withdrawn its proposed rule concerning Fannie Mae and Freddie Mac underwriting standards related to mortgages affected by Property Assessed Clean Energy programs. Local governments use the PACE Program, which is part of the American Recovery and Reinvestment Act of 2008, to provide financing secured by a priority lien on the property to homeowners for the purchase of energy-related home improvements. While 27 states and the District of Columbia have legislation in place to permit PACE financing for “green” homes, in July 2010 Fannie and Freddie stopped purchasing PACE-related mortgages that had automatic first-lien priority over previously recorded mortgages.

A former FHA commissioner said he supports a proposal in the Protecting American Taxpayers and Homeowners Act (PATH Act) to spin off the FHA from the Department of Housing and Urban Development as an independent government-owned corporation. Brian Montgomery, who was assistant secretary for housing and head of the FHA during the Bush administration, said the separation, if enacted, would transfer authority, resources and personnel from HUD to the FHA to manage the insurance fund. “This is something I have advocated both during and after my more than four-year tenure as FHA commissioner,” said Montgomery, who ...

As expected, the president’s nomination of Rep. Mel Watt, D-NC, to head the Federal Housing Finance Agency was approved late this week by the Senate Banking, Housing and Urban Affairs Committee. Also as expected, the committee voted 12-10 strictly along party lines to advance Watt’s nomination to the full Senate, where it awaits a vote on confirmation. “As Congress continues to seek consensus on a long-term solution for our housing finance system, we need a Senate-confirmed director in place at the Federal Housing Finance Agency,” said Committee Chairman Sen. Tim Johnson, D-SD. “Congressman Mel Watt is well qualified to lead the FHFA in its conservatorship of Fannie Mae and Freddie Mac, and he too should be confirmed without delay.”

The Federal Housing Finance Agency has wrongfully denied Fannie Mae and Freddie Mac permission to uphold their statutory duty under the Housing and Economic Recovery Act of 2008 to make contributions to the National Housing Trust Fund, according to a lawsuit filed by the National Low Income Housing Coalition. Fil0ed last week in the U.S. District Court for the Southern District of Florida, the suit by the NLIHC – along with the Right to City Alliance and four other individual plaintiffs – calls on the FHFA to make good on the GSEs’ obligations to make contributions into the trust fund. The fund was set up under HERA to provide subsidies to rehabilitate and fund low-income housing, but Fannie’s and Freddie’s payment obligations to the trust fund were suspended when the GSEs were placed into government conservatorship in September 2008.

Rep. Mel Watt, D-NC, did himself no favors nor did he appear to win any new votes by turning in a lackluster performance at his confirmation hearing last week, but industry observers say President Obama’s nominee to head the Federal Housing Finance Agency could yet win Senate confirmation … with time. Both in his prepared testimony and during questioning by members of the Senate Banking, Housing and Urban Affairs Committee, Watt placed a heavy emphasis on his biographical details, but he was light on mortgage-finance policy specifics. Republicans, as expected, politely hammered the Congressman on his technical qualifications, as well as his political independence, to serve a five-year term as the FHFA’s first permanent director.

Fannie Mae and Freddie Mac would cease to exist while the Federal Housing Finance Agency would be repurposed into a new incarnation as a “capable and empowered” regulator of a “pragmatic” housing finance system as envisioned in a new blueprint released this week by four industry experts. Spearheaded by Moody’s Analytics Chief Economist Mark Zandi – most recently on the White House’s short list to head the FHFA – the group’s white paper calls for the federal government to play an “explicit and transparent” role in the new housing finance system and to act as an insurer that covers catastrophic losses. The blueprint calls for an emphasis on mortgage funding diversity.