The Federal Deposit Insurance Corp. would be prohibited from repudiating covered bonds when resolving a failed banking institution under the provisions of a controversial housing reform bill put together by the Republican leadership of the House Financial Services Committee and passed out of committee last week. That prohibition would go a long way toward resolving the long-standing hurdles that have thwarted development of a covered bond market in the United States. But it also amps up the level of controversy associated with H.R. 2767, the Protecting American Taxpayers and Homeowners Act of 2013, introduced by Committee Chairman Jeb Hensarling, R-TX, and Rep. Scott Garrett, R-NJ, the architect of a covered bonds bill introduced in the 112th Congress. The relevant provisions in the PATH Act are...
Agency issuance of single-family MBS declined modestly in July, according to a new analysis by Inside MBS & ABS, with most of the decline coming in Freddie Mac’s business. The three government MBS agencies issued a total of $144.26 billion in single-family MBS last month, down 2.5 percent from June’s level. It was the lowest monthly production level so far in 2013, and issuance has generally drifted lower since peaking in January. July did push the year-to-date total for 2013 over the $1 trillion mark, up 17.9 percent from the first seven months of last year. The biggest shift was...[Includes one data chart]
The Department of Justice and the Securities and Exchange Commission filed similar lawsuits this week against Bank of America regarding an $855.67 million non-agency jumbo MBS issued in January 2008. The lawsuits claim that BofA failed to disclose key facts regarding one of the last jumbo deals to be issued before the securitization market essentially closed in 2008. BofA counters that the securities were sold to sophisticated investors that had “ample access” to the underlying data. BofA was the issuer of the security in question – Banc of America Mortgage 2008-A Trust – as well as the originator, servicer, sponsor and depositor, and affiliated entities managed the transaction. The regulators allege...
Fannie Mae, Freddie Mac and mortgage-backed securities trustees representing investors in non-agency MBS sued the city of Richmond, CA, this week to stop it from further implementing a plan to use eminent domain authority to seize and purchase performing underwater mortgages. Wells Fargo and Deutsche Bank, acting as trustees for a group of investors that includes BlackRock, Inc., Pacific Investment Management and the government-sponsored enterprises, filed the lawsuit in federal court in San Francisco at the behest of certificate holders. The plaintiffs are asking the court to declare the “Richmond Seizure Program” unconstitutional and in violation of California laws, and to order city officials to end the program. Securitizers and investors are...
Given the complexity of the 3 percent points-and-fees cap for qualified mortgages under the ability-to-repay rule and the imperative of getting it right, mortgage lenders could still find themselves outside the compliance box if they ignore the fair lending implications of their business practices. “Fair lending is definitely something we have to take into consideration in every decision we make and every rule we come across,” said Ginger Moore, the compliance officer at PrimeLending, during a webinar last week sponsored by Inside Mortgage Finance. One example is...
Ocwen Financial expects to reach a settlement with state attorneys general regarding servicing practices “very soon,” according to Ronald Faris, the servicer’s president and CEO. State AGs have been working for more than a year to get other servicers to agree to terms similar to the $25 billion settlement reached with five large bank servicers in February 2012. A person with knowledge of the negotiations said terms with Ocwen have yet to be finalized or sent to the 50 state AGs, suggesting that it could be weeks before the settlement is completed. The source added that future settlements with servicers are likely to be reached on an individual basis, not bundled as they were with the settlement that involved Ally Financial, Bank of America, Citi, JPMorgan Chase and Wells Fargo. Ocwen’s Faris said...
In the wake of EverBank’s recent exit from the wholesale/broker channel, there appear to be signs of expansion in the sector with nonbanks leading the charge. But mortgage brokers shouldn’t get their hopes up too much: Many of those expanding are nonbanks and none are likely to fill the void created by the megabanks – Bank of America, Chase and Wells Fargo – which began pulling out three years ago. “I truly believe...
Specifically, Sen. Warren says she wants information on seller/servicers that were granted price breaks and the “basis” for “granting more favorable terms.”
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