The Federal Housing Finance Agency raised the maximum conforming loan limit for GSE mortgages by $7,100 for 2017, amid rising home values. The new loan limit, announced Nov. 23, is $424,100 and represents the first time in a decade, since the housing downturn, that the conforming loan limit climbed above $417,000. The baseline loan limit was established by the Housing and Economic Recovery Act and is recalibrated each year to reflect the changes in a national home price index. Until now, the index has not risen above levels set in the third quarter of 2007.

The ruling handed down this week that concluded the structure of the Consumer Financial Protection Bureau is unconstitutional has led to industry chatter that the Federal Housing Finance Agency, which is similarly structured, could be more closely examined. In PHH Corp. v. Consumer Financial Protection Bureau, a DC Circuit Court judge found that the bureau’s single-director structure was unconstitutional and dismissed a $109 million penalty against PHH for violations of the Real Estate Settlement Procedures Act. Robert Maddox, financial services litigation attorney with Bradley Arant Boult Cummings LLP, told Inside The GSEs, “While the court did not address the constitutionality of FHFA, the framework of FHFA may possibly lend itself to the same constitutional scrutiny as the CFPB.”

The supervision of examiners in the Division of Federal Home Loan Bank Regulation has been lax when it comes to making sure deficiencies within the FHLBanks are corrected, according to a recent Federal Housing Finance Agency Office of the Inspector General report. The IG reviewed a sample of nine matters requiring attention (MRA) that the division issued from January 2014 through December 2015. When it comes to correcting serious supervisory matters, the IG said that the bank regulator has been inconsistent in following FHFA requirements. For two of the MRAs, examiners determined that the affected FHLBank made no progress in remediating the deficiencies and reissued MRAs with the same exact terms.

Requiring an undercapitalized issuer to repurchase uninsured performing mortgages out of a mortgage-backed securities pool could increase risk to the federal government, warned Ginnie Mae. Responding to an adverse audit report from the Department of Housing and Urban Development’s Office of the Inspector General, Ginnie said that while it generally accepts the IG’s recommendations, forcing an undercapitalized issuer to buy out performing loans and either hold them in portfolio or sell them at a substantial loss would put the government at greater risk. “This is something we need to be alert to in certain cases,” the agency said. According to the report, Ginnie improperly allowed more than $49 million of single-family mortgages with terminated insurance to remain in its MBS pools for more than one year without obtaining FHA coverage. The IG warned Ginnie could be on the ...

The Federal Housing Finance Agency recently redrafted the proposed indemnification payments rule to make it easier to understand. The proposed rule looks to replace a provision concerning indemnification payments by regulated entities in conservatorship with one that clearly states that the regulation does not apply to such entities. This issue has been brewing since 2008 when the FHFA published an interim final rule on severance agreements and indemnification payments. It then re-proposed the proposed amendment on indemnification payments in 2009. Now the agency said it wants to clarify the fact that it does not consider indemnification payments to be subject to FHFA rules and procedures related to compensation.

The Federal Housing Finance Agency’s risk assessments were not a proper follow-up to targeted risk, according to the FHFA’s Office of the Inspector General. The IG noted that between 2012 and 2015, the examiners’ assessments often had little to do with the high-priority risk they are supposed to be supervising. …

The complex financing arrangements used by certain investors and a lack of clarity from federal regulators can make it difficult to determine the entity responsible for meeting risk-retention requirements in some MBS and ABS, according to Charles Sweet, senior counsel at the law firm of Morgan Lewis. The Dodd-Frank Act generally required the sponsor of a security to retain at least 5.0 percent of the risk from the security. Sweet said determining the sponsor of an MBS or ABS can be fairly straightforward when one company originates the assets, services the receivables and initiates securitization, as in the case of an ABS backed by automobile retail contracts from a captive finance company of a car manufacturer. However, where securitization roles are more dispersed, Sweet said...

The Federal Communications Commission has issued a baffling final rule restricting the way servicers can collect on or service student loans, mortgages and other debts owed to the federal government.Specifically, the rule implements a key provision in the Bipartisan Budget Act of 2015 amending the Telephone Consumer Protection Act to exclude robocalls from the TCPA consent requirement if they are made solely to collect a debt owed to or guaranteed by the federal government.The TCPA generally requires a caller to obtain “prior express consent” from the call recipient before making a telemarketing call or an auto-dial call to the recipient’s landline or cell phone.However, the mortgage industry raised concerns that TCPA’s consent requirement could create potential liability for important servicing calls that could help homeowners save their homes, which prompted Congress to pass the Budget Act amendment. Last month, the FCC specifically excluded the federal government from the TCPA’s consumer protections by ruling that the government is not a “person” subject to the TCPA. Here is where the FCC rule gets confusing. commission is authorized to adopt rules to “restrict or limit the number and duration” of any wireless calls to collect debt owed to the federal government.”

Mortgage Company President Charged with Defrauding Ginnie Mae. Robert Pena, president and founder of the now-defunct Mortgage Security Inc., was charged in federal district court in Boston for allegedly bilking Ginnie Mae out of nearly $3 million. MSI was an approved participant in the Ginnie Mae mortgage-backed securities program, pooling eligible single-family mortgages and selling the securitized products to investors. The firm also serviced the underlying loans. In 2011, Pena allegedly began diverting borrower payments and huge loan-payoff amounts into secret accounts, which he used to fund personal and business activities. Likewise, he is said to have funneled borrowers’ escrow funds and mortgage-insurance premiums into other personal accounts. In total, Pena pocketed $3 million due Ginnie Mae, which had to pay investors whose investments it had guaranteed, according to the ...

The Federal Communications Commission recently promulgated final rules that restrict how companies can attempt to collect on delinquent agency mortgages, federal student loans and other debts owed to the federal government, including through the use of so-called robocalls. The new rules limit the number of robocalls to wireless numbers, including text messages, to three per month. The new rules also only allow robocalls concerning debts that are delinquent or at imminent risk of default, unless there is prior express consent otherwise. The new rules require that, absent consent, callers only call the individual who owes the debt, not his or her family or friends. This includes limiting the number of robocalls allowed to reassigned numbers. The new rules reiterate that ...