The Consumer Financial Protection Bureau this week proposed changes to a final rule issued in January to remove an inadvertent gap in protections for borrowers receiving higher-priced mortgages and tweak the definitions of “rural” and “underserved” areas. The proposed changes relate to a final rule on escrow requirements for higher-priced mortgage loans. Lenders are currently required to establish escrow accounts for certain HPMLs for a minimum of one year. The CFPB’s final rule generally ...

The Obama administration’s 2014 budget proposal calls for a Home Affordable Refinance Program for non-agency borrowers, although prospects for getting legislation through Congress remain slim. The proposed budget included a small section entitled “finish the task on universal refinancing for responsible homeowners.” The section noted that the Obama administration worked with the government-sponsored enterprises in 2012 to double the number of HARP refinances for GSE borrowers with negative equity ...

Bank of America agreed this week to pay $500 million to settle lawsuits from investors in non-agency mortgage-backed securities issued by Countrywide Financial in 2005 through 2007. If it receives judicial approval, the settlement on about $15.0 billion in non-agency MBS will be the largest-ever non-agency MBS class-action recovery. “After five years of hard-fought litigation, this record-breaking recovery is a tremendous result for MBS investors misled by Countrywide and ...

Just how healthy is the residential mortgage business these days? Answer: Fannie Mae and Freddie Mac are swamped with seller/servicer applications.

Banking regulators acknowledged problems with the foreclosure reviews conducted by the nation's megabanks and have agreed to evaluate the use of independent consultants in regulatory actions.

Expect quality control to be the single most critical component at the top of a long list of requirements for prospective lenders seeking to do business with Fannie Mae and Freddie Mac, according to agency officials and experts during an Inside Mortgage Finance webinar this week. The two government-sponsored enterprises are ready, willing and able to do business with new seller/servicer partners, if they are prepared to demonstrate, in a transparent and painstaking way, they are an opportunity to Fannie or Freddie and not a risk, National Union Mortgage President and CEO Bill Cosgrove told webinar attendees. “It’s really all about quality control. Every area of your organization has to be...

The non-agency MBS market produced $8.33 billion in new transactions during the first quarter of 2013, its strongest issuance in nearly two years, and did so the old-fashioned way by relying heavily on “new” prime jumbo mortgages. The first three months of 2013 saw nearly a threefold increase in non-agency MBS issuance compared to the previous quarter and was 65.1 percent ahead of the pace set in 2012, according to a new analysis and ranking by Inside MBS & ABS. Although over half the issuance volume was in re-securitizations and deals backed by servicer advances, the most encouraging sign was the continued rebound in prime jumbo MBS production. Redwood Trust made good...[Includes three data charts]

Issuers of non-agency MBS won two key court battles against federal agencies because the regulators’ suits to recover losses suffered by failed institutions came too late. Last week, the U.S. District Court for the Central District of California rejected all claims the Federal Deposit Insurance Corp. brought against Countrywide Financial related to 10 MBS certificates sold to the failed Colonial Bank. “All of the FDIC’s claims are time-barred,” the court said. In FDIC v. Countrywide, the court said...

Officials at the Securities and Exchange Commission and the Financial Industry Regulatory Authority met this week to consider increasing pricing transparency on fixed-income products, including publishing transaction information on private-placement ABS. Investors have called for greater pricing transparency on ABS issuance – private placements and SEC-registered deals – while issuers warn that such disclosures could increase costs or reduce their willingness to issue securities. In addition to meeting with the SEC, FINRA’s board of directors met...

The Federal Housing Finance Agency is moving forward with its search to find a CEO to run the new common mortgage securitization platform that will one day be shared by Fannie Mae, Freddie Mac and, potentially, other issuers. But it’s anybody’s guess how much the regulator is willing to pay to get a top-flight candidate, according to industry observers. At least two individuals recently were approached about the job, according to these observers. Funding for the project will presumably come...