The Federal Housing Finance Agency would see the 12 Federal Home Loan Banks come up with their own internal credit rating system under a proposed rule issued by the FHFA two weeks ago. Published in the May 23 Federal Register, the Finance Agency proposal would remove a number of credit rating references and requirements in certain safety and soundness regulations affecting the FHLBanks. FHFA regulations require the FHLBanks to assess the credit-worthiness of a security or money market instrument that either the Bank is considering investing in or the Bank is helping another financial institution invest in.

The prospect of legislation being offered that would grant the Department of Housing and Urban Development greater authority to manage the Home Equity Conversion Mortgage program has improved significantly after two House lawmakers declared their intention to introduce a bipartisan bill. Reps. Michael Fitzpatrick, R-PA, and Denny Heck, D-WA, announced during a recent hearing by the House Financial Services Subcommittee on Housing and Insurance that they will co-sponsor legislation to give the FHA the authority it needs to swiftly implement HECM reforms by mortgagee letter. Fitzpatrick expressed his support for ...

The watchdog agency charged with overseeing the regulator of Fannie Mae, Freddie Mac and the Federal Home Loan Banks said it plans to remain “active on the law enforcement front.” In its semi-annual report to Congress issued this week, the Federal Housing Finance Agency’s Office of Inspector General gave a tally of its accomplishments for the six-month period ending March 31, noting that it issued 13 audit, evaluation survey and white paper reports, and participated in several criminal and civil investigations.

The director of the Federal Housing Finance Agency would be able to review and revise the take-home pay of Fannie Mae, Freddie Mac and Federal Home Loan Bank executives should the director determine that a senior official’s compensation is “not reasonable or comparable” with the earnings of counterparts in similar businesses, under newly revised agency rule. An interim final rule, published by the FHFA in the May 14 Federal Register authorizes and clarifies the FHFA director’s authority to review and withhold executive compensation at Fannie, Freddie and the 12 FHLBanks in particular. “In view of FHFA’s statutory obligation to prohibit compensation to any executive officer that is not reasonable and comparable, prior review and non-objection rather than review after-the-fact can help set expectations and avoid the need for later remedial action,” explained the Finance Agency.

It’s not exactly Mutiny on the Bounty, but 378 employees of the CFPB voted last week in favor of joining the National Treasury Employees Union, with 86 against, putting the NTEU in the position of representing more than 800 of the CFPB’s approximately 1,200 employees, according to Politico. “Why would employees at CFPB – an agency with liberal bona fides, generous compensation and top-notch benefits – want to form a union,” Politico asked. “The push to organize was driven in large part by news that many employees in...

Fannie Mae and Freddie Mac will no longer purchase loans that are interest-only, loans with 40-year terms or loans with points and fees exceeding the thresholds of the Consumer Financial Protection Bureau’s “ability to repay” rule, the Federal Housing Finance Agency announced this week. The FHFA said it is directing the GSEs to limit their future mortgage acquisitions to loans that meet the requirements for a qualified mortgage, including those that meet the special or temporary qualified mortgage definition, and loans that are exempt from the CFPB’s “ability to repay” requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The Federal Housing Finance Agency is calling for public comments to weigh in on its planned survey of borrowers as part of a joint effort with the Consumer Financial Protection Bureau to build and maintain a database of government mortgage information. The planned National Survey of Mortgage Borrowers will be a quarterly survey of recent first-time borrowers of single-family mortgages. “The survey questionnaire will be sent to approximately 7,000 new mortgage borrowers each calendar quarter and will consist of approximately 80-85 multiple choice and short-answer questions designed to obtain information about individual residential mortgage borrowers that is not available elsewhere,” explained the FHFA in its recent Federal Register notice.

Democrats are happy, but not quite content, with President Obama’s long-awaited action last week to send the name of Rep. Mel Watt, D-NC, to the Senate as the White House’s nominee for director of the Federal Housing Finance Agency. Prominent progressives are doubling down by demanding that Edward DeMarco, the FHFA’s long-standing but embattled acting director, be dispatched out of office by the president forthwith. Freshman Senator and one-time Consumer Financial Protection Bureau architect Elizabeth Warren, D-MA, and New York Attorney General Eric Schneiderman, D, lauded Watt’s nomination, then immediately demanded that Obama appoint a new FHFA acting director in the interim.

Wells Fargo will reportedly appeal a federal judge’s decision that a $25 billion agreement Wells and four other banks made with federal agencies and 49 state attorneys general last year to settle allegations of servicing malpractices does not make the banks immune to future claims under the False Claims Act. The Feb. 12 decision by Judge Rosemary Collyer of the U.S. District Court for the District of Columbia said that the landmark settlement she had approved in April 2012 does not release the from future False Claims Act claims the government may bring. Dating back to the U.S. Civil War, the FCA provides for treble damages for fraud that results in ...

The Department of Housing and Urban Development this week issued more detailed guidance to changes in the FHA Lender Insurance Program based on a final rule published in the Federal Register in January 2012. Under the LI program, high-performing direct endorsement lenders have the authority to conduct pre-endorsement reviews and endorse loans. Mortgagee Letter 2013-12 supersedes guidance HUD issued last month and provides additional details on initial and continuing eligibility for Lender Insurance. It also talks about HUD monitoring of program participants as well indemnification procedures, which were discussed in ...