Capital rules proposed by federal regulators last week for banks could have a significant impact on originations and holdings of non-agency mortgages and mortgage-backed securities. The changes are part of Basel III reforms. Non-bank special servicers have already started to increase their portfolios due to sales by banks getting a head start on complying with Basel III rules. Industry analysts warn that originations of “non-vanilla” mortgages will also be curtailed. “Following the qualified mortgage rules and ...

Attorneys representing non-agency mortgage-backed security issuers suggest fighting repurchase-request lawsuits to narrow the claims and eventually settling such lawsuits. Jason Halper and Martin Seidel, partners at the law firm of Cadwalader, Wickersham & Taft, said reducing the claims can help lead to a better settlement for issuers. “You can very often narrow the case substantially,” Seidel suggested this week during a presentation by the State Attorneys General Enforcement Network. Among other issues ...

Berkshire Hathaway became the lead bidder for Residential Capital’s loan portfolio this week while Nationstar Mortgage remained the stalking horse bidder for ResCap’s mortgage servicing rights and origination platform. ResCap’s parent company Ally Financial was previously the top bidder for ResCap’s loan portfolio. Auctions for the MSRs, origination platform and loan portfolio are expected in October. An investigation by the Consumer Financial Protection Bureau helped a borrower receive a ... [Includes two briefs]

Widespread objection by stakeholders has forced the Department of Housing and Urban Development to rescind a new lending policy regarding borrowers with disputed debt and unresolved collection issues and to consider clarifying the issue in future guidance. The policy, announced along with other FHA underwriting changes in February, was initially to take effect on April 1. However, industry concern about fewer borrowers qualifying for an FHA-insured loan caused HUD to extend the policy’s effective date to July 1 to reexamine and gather more information from stakeholders. HUD announced its decision to ...

Advocates for FHA condominium rule changes may have to wait a bit longer for a proposed rule currently in development, according to Acting FHA Commissioner Carol Galante. Galante said the Department of Housing and Urban Development is reviewing the current FHA condo rules for future revisions that would remove the roadblock to buyers, sellers and lenders. A proposed rule is in the works but it could take considerably more time to finish and finalize it, she said without providing a timetable. In the meantime, new guidance is on the way to ...

The real estate industry called on the Department of Veterans Affairs to offer an existing pilot program on property rehabilitation similar to the FHA’s 203(k) program in all markets, especially those with a high veteran population. In a letter, the National Association of Realtors asked that the Veterans Renovation Pilot Program be administered through the VA Loan Guaranty Program, allowing veterans to purchase distressed property for repair, alteration, renovation and improvement. The VA pilot resembles the FHA’s “fixer-upper” program for buyers interested in purchasing ...

FHA lenders and servicers commencing foreclosure on FHA-insured mortgage loans in the Commonwealth of Virginia must first meet with the borrower personally before proceeding or risk voidance of the foreclosure sale, the state supreme court ruled recently. Because of the decision by the Supreme Court of Virginia, the state has joined a growing list of states that require a face-to-face meeting between a mortgage lender and a borrower before initiating foreclosure proceedings on an FHA-insured mortgage loan. In Mathews v. PHH Mortgage Corp., the court upheld ...

The Consumer Financial Protection Bureau has been able to identify a number of improvements it can make in a rulemaking that will merge the consumer mortgage disclosures required under the Truth in Lending Act and the Real Estate Settlement Procedures Act, thanks to input from a small business review panel it convened earlier this year. “During the small business review panel [process] and our other outreach, industry identified several areas in which the current rules create uncertainty about how to comply,” CFPB Deputy Director Raj Date said during a hearing of the House Financial Services Subcommittee on...

A number of mortgage lending and small business interest groups want the Consumer Financial Protection Bureau to use the extra time provided by re-opening the public comment process on the controversial ability-to-repay rulemaking to conduct a Small Business Advocacy Review panel and publish its recommendations when the agency issues the final rule. “We recognize that the CFPB was not legally required to conduct an SBAR panel since the rulemaking was transferred to the CFPB after the proposed rule stage,” the groups said in a letter to the bureau last week. However, given the potentially significant...

As New York announced a $60 million program to help struggling homeowners, winning accolades from the Department of Housing and Urban Development for its use of the foreclosure settlement money, other states continue to plug budget holes with their settlement gains. The Empire State’s Homeowner Protection Program will fund housing counseling and legal services using some of the $107.6 million allotted the state through the multistate servicing and foreclosure settlement. HUD Secretary Shaun Donovan called it a “national model” for how states should use their settlement money. NY Attorney...