The Securities and Exchange Commission gave a thumbs-up last week to some changes to the rules governing the to-be-announced market proposed by the Financial Industry Regulatory Authority to increase transparency in agency pass-through MBS transactions. The new changes will institute clear requirements for more timely reporting of two subsets of MBS TBA transactions those that are for good delivery (GD) and those that are not for good delivery (NGD) and include some information that has not been publicly disclosed before. The intent of the changes is to improve the ability of investors to...
Increases in mortgage insurance premiums and adjustments to loan programs will likely make FHA-insured mortgage loans more costly and difficult to obtain for future FHA borrowers, according to industry participants. Lenders estimate that about 40 percent of home purchases and even a larger share of first-time homebuyer purchases are insured by the FHA. They say the premium changes could have a detrimental impact on homebuyers in 2012. The FHA has increased its premiums in order to shore up its books in light of high delinquency and foreclosure rates and to strengthen its depleted capital reserves, which have ...
The Obama administrations Residential MBS Working Group, set up in January to probe misconduct that drove the financial crisis, is apparently trying to tap the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 to make such cases easier to bring. Although it hasnt been used that much, the appeal of pursuing criminal investigations under FIRREA is apparently the relatively lower burden of proof than bringing more traditional criminal charges. Also, FIRREA has a longer statute of limitations than do other finance-related laws, along with the potential for large fines...
Lack of procedures for resolving repurchase conflicts between non-agency MBS investors and providers of representations and warranties could negatively affect the rating for any newly issued residential MBS, according to a new analysis by Moodys Investors Service. The volume of unresolved repurchase conflicts between MBS investors and reps and warranties providers can be gauged by the number of lawsuits and the growing dollar value of settlements, said Moodys analyst Kathryn Kelbaugh. The issue was thrust into the spotlight recently because 82 percent of the loans backing the $746 million non-agency...
After months of hearing Congressional Democrats and White House allies suck up the public debate oxygen in favor of GSE principal reduction, mortgage writedown opponents are speaking up as the Federal Housing Finance Agency looks to be reconsidering its stand against loan forgiveness. Industry groups are expressing with greater volume their concern that principal forgiveness on loans guaranteed by Fannie Mae and Freddie Mac would ultimately hurt the housing market.
Four and a half years after it was placed on a form of probation, the Federal Home Loan Bank of Chicago was officially released from its consent cease-and-desist order by the Federal Housing Finance Agency this week. FHFA Acting Director Edward DeMarco said the Finance Agency terminated the order because of improvements in the Banks financial condition and capital position, resolution of the agencys risk management concerns and consideration of specific comments and assurances made by the FHLBanks board of directors to FHFA.
The Federal Housing Finance Agency has revised and consolidated its categories for safety and soundness and Affordable Housing Program examination findings pertaining to Fannie Mae, Freddie Mac and the Federal Home Loan Banks, the FHFA announced in a recent advisory bulletin. Examination findings are deficiencies related to risk management, risk exposure, or violations of laws, regulations or orders that affect the performance or condition of a regulated entity, according to the FHFA.
Fannie Mae and Freddie Macs mortgage servicers will soon be required to review and respond to short sale requests within 30 days of an offer on the property and to provide weekly status updates if the offer is still under review after that, under new standards issued this week by the Federal Housing Finance Agency. Under the new guidance, effective June 15, servicers will have to make a final decision within 60 days of receiving an offer on a short sale property. The FHFA said the change is an attempt to hasten the traditionally time-consuming and difficult primary alternative to foreclosure.
Almost half of lenders believe that strategic defaults will increase in 2012, a specter that continues to affect national housing policy. There are no reliable data regarding strategic defaults in the U.S., considering the secrecy inherent in the act. That has forced policymakers to make dollars-and-cents decisions based on conjecture about borrower behavior. A new FICO survey found that 46 percent of bank risk professionals expect the number of strategic defaults in 2012 to surpass those in 2011. Survey participants had a generally pessimistic view of homeowners regard for their mortgage...
The Consumer Financial Protection Bureau this week indicated it will be pulling out its disparate impact playbook as it launches an offensive against the providers of mortgage credit and other lenders it believes are engaging in discriminatory behavior towards consumers. We want consumers to avoid the marketplaces silent pickpocket discrimination, said CFPB Director Richard Cordray. We cannot afford to tolerate practices, intentional or not, that unlawfully price out or cut off segments of the population from the credit markets. In CFPB Bulletin 2012-04 (Fair Lending), the bureau asserted its...