Expect it to take years for the courts to resolve lawsuits filed by private investors in Fannie Mae and Freddie Mac stock, with the odds heavily stacked in the government’s favor, note industry observers. Speaking during a recent Bloomberg Industries webinar on Fannie Mae and Freddie Mac litigation, Brooklyn Law School Professor David Reiss noted it could take the courts up to a year simply to resolve the introductory motions.

President Obama is expected to announce his intent to nominate Housing and Urban Development Secretary Shaun Donovan as director of the Office of Management and Budget and San Antonio Mayor Julian Castro to replace him. If confirmed by the Senate, Castro would be the second Hispanic after Henry Cisneros to assume the top post at the Department of Housing and Urban Development. Also a former mayor of San Antonio, Cisneros served as HUD secretary during the Clinton administration from 1993 to 1997. Currently in his third term as mayor, Castro is a strong advocate of affordable housing, neighborhood revitalization, inner-city investment and child education and works closely with the San Antonio Housing Authority. San Antonio mortgage bankers said they have had little interaction with Castro, who, they say is “big on housing issues.” “We’re hoping to hear a little bit more about his ...

The Federal Housing Finance Agency will launch a pilot program in Detroit designed to improve servicing standards and foreclosure prevention options in neighborhoods hardest hit by the foreclosure crisis. FHFA Director Mel Watt, in a speech this week at the Brookings Institution, unveiled the agency’s new Neighborhood Stabilization Initiative, as part of the Finance Agency’s more muscular conservatorship strategic goal to maintain Fannie Mae and Freddie Mac.

A coalition of industry trade associations is urging the FHA to harmonize its regulatory treatment of transfer fee covenants with the Federal Housing Finance Agency. In a joint letter, the group said the FHFA’s final rule on transfer fee covenants “establishes a clear, national standard to protect homeowners from equity-stripping private transfer fees while preserving the preeminence of state and local governments over land-sue standards.” The letter was sent in response to reports that FHA may issue a proposed rule on transfer fee covenants that will apply to FHA-insured mortgages. A private transfer fee covenant is attached to real property by the owner or another private party – frequently the property developer – and provides for a fee to be paid to specified third party every time the property is resold. The fee typically is a percentage of the property’s sales price and ...

This week’s abrupt, last-minute postponement of a much-anticipated markup of a Senate housing finance reform draft bill effectively doomed the prospects of the legislation making it to a floor vote, note industry observers. The delay came amid continued progressive dissatisfaction with the legislation and an increasingly bold effort by advocates to keep Fannie Mae and Freddie Mac alive. Senate Banking Committee Chairman Tim Johnson, D-SD, and Ranking Member Mike Crapo, R-ID, announced to a packed committee chamber that they would delay consideration of S. 1217 in order “to build a larger coalition of support.”

The Senate’s GSE reform proposal in its current form would create an extremely high risk for Freddie Mac’s core policy functions during the bill’s proposed five-year wind down of the company, Freddie’s chief executive warned. In a confidential memo to Federal Housing Finance Agency Director Mel Watt that was leaked to the media, Freddie CEO Donald Layton said that the housing finance reform legislation by Sens. Tim Johnson, D-SD, and Mike Crapo, R-ID, fails to state clearly that the GSEs’ core policy function must be maintained and such an omission would create potentially crippling uncertainty among staffers during the transition.

While the housing finance reform legislation authored by Sens. Tim Johnson, D-SD, and Mike Crapo, R-ID, recognizes the “distinct nature and role of the Federal Home Loan Banks,” concern remains that the bill’s treatment of FHLBank regulation within the proposed regulator could lead to a conflict of interest that impedes the 12 Banks and their members, according to the American Bankers Association. An ABA memo to the members of the Senate Banking, Housing and Urban Affairs Committee suggested that lawmakers leave regulation of the FHLBanks with either an independent agency or strengthen the bill’s proposed regulatory firewalls.

Sen. Dan Coats, R-IN, has introduced the Community Financial Protection Act, legislation to provide smaller financial institutions such as community banks and credit unions with some regulatory relief from financial regulations enacted after the 2008 financial crisis that many complain are crippling their businesses. The Coats bill would modify the way in which the CFPB requests information from financial institutions with less than $10 billion in assets. Under the Coats proposal, the CFPB must use publicly available information or seek the requested information from existing banking regulators. Specifically, the Community Financial Protection Act would stipulate that the CFPB must use current and existing publicly available information and data prior to requesting any information from the prudential regulator. Also, if the...

HUD Secretary Shaun Donovan said this week that housing finance reform can no longer be put off, but no more so than for the FHA which continues to play an “outsized role” in the mortgage market as private capital remains on the sidelines. Speaking in New York at an event co-hosted by the Bipartisan Policy Center, Donovan said the Obama administration is squarely behind the legislative proposal by Senate Banking, Housing, and Urban Affairs Committee Chairman Tim Johnson, D-SD, and Ranking Member Mike Crapo, R-ID. “Despite its imperfections, does this bill represent progress? Absolutely,” said Donovan, seeking to win over housing advocacy groups disenchanted with the bill. “When looking for ways to improve [the bill], let’s not lose sight of its potential. Let’s not forget its importance to the housing market and its future.” The Johnson-Crapo legislative proposal calls for a wind-down of Fannie Mae and Freddie Mac and creation of a ...

While the mortgage and housing industry awaits with growing impatience for a public statement from the recently appointed head of the Federal Housing Finance Agency, market observers expect Mel Watt to speak only when he is good and ready. The former 11-term North Carolina Democrat Congressman has been silent since he was sworn in to his position as FHFA director in early January. Watt has made almost no public statements nor granted any media interviews but he has spent the past weeks “doing his homework” and quietly meeting with industry trade groups seeking input.