Real estate industry groups are urging the FHA to align a forthcoming proposed rule for private transfer fees with a final rule recently adopted by the Federal Housing Finance Agency. In a joint letter to Acting FHA Commissioner Carol Galante, the National Association of Realtors and the Institute of Real Estate Management expressed support for the FHFA rule on transfer-fee covenants and asked that a mortgagee’s compliance with the FHFA rule be deemed as compliance with the FHA’s own rule regarding such covenants. The two groups urged the FHA to ...

The Residential Mortgage-Backed Securities Working Group announced a new website this week for whistleblowers to submit tips regarding potential fraud involving non-agency mortgage-backed securities. “There are scores of people who worked in the residential MBS market who acted responsibly but who also may have witnessed greed and misconduct that crossed the legal line and created havoc for investors, homeowners and our economy,” said Acting Associate Attorney General Tony West. “We want to hear from them ... [Includes seven briefs]

Wall Street is trying to cope with the considerable ambiguity that officials see in emerging rules on conflicts of interest in securitization and a potentially troublesome federal program that changes how issuers arrange credit ratings for their deals. The conflict-of-interest rule was included in the Dodd-Frank Act as an attempt to prevent participants in the securitization process from structuring deals that allow them to profit at the expense of investors. “When this rule first came out, it was not bad; you could probably live with this in most cases,” said Kenneth Morrison, a...

Uncertainty lingers in the wake of last week’s announced $8.7 billion settlement between non-agency MBS investors and Ally Financial’s subsidiary Residential Capital as the details and implications of the deal resonate throughout the market. The agreement with 17 residential MBS investors was struck in a photo finish shortly before ResCap’s bankruptcy filing, and it represents the second major settlement between non-agency MBS investors and the sponsors of non-agency securitizations. Bank of America’s controversial $8.5 billion proposed settlement with investors that purchased Countrywide non-agency MBS...

The Federal Deposit Insurance Corp. late last week filed separate lawsuits against a number of companies that issued or underwrote non-agency MBS purchased by Citizens National Bank and Strategic Capital Bank, two Illinois banks that failed in May 2009. The two banks purchased some $140.5 million of non-agency MBS issued by Bear Stearns, Citicorp, Credit Suisse and Merrill Lynch. The lawsuits also name JPMorgan Securities, Citigroup, Credit Suisse, Deutsche Bank, Ally Securities, HSBC Securities, RBS Securities and UBS Securities as underwriters of these transactions. The FDIC is seeking $77.0...

A costly difference of interpretation between the Mortgage Guaranty Insurance Corp. and Freddie Mac over a pool insurance dispute has prompted the mortgage insurer to file suit against the government-sponsored enterprise and its regulator, the Federal Housing Finance Agency. Filed earlier this month in the U.S. District Court of Milwaukee, where the company is based, the legal dispute concerns differing readings of the “aggregate loss limit” for insurance policies MGIC provides on 11 pools of Freddie loans. The aggregate loss limit is about $535 million higher under Freddie’s...

Even as the Federal Housing Finance Agency deliberates writedowns of Fannie Mae and Freddie Mac mortgages, the agency has agreed to allow the government-sponsored enterprises to participate in a California program that applies principal reduction in modifying distressed loans. The FHFA has confirmed Fannie and Freddie’s participation in the California Housing Finance Agency’s Keep Your Home California Program, a $2 billion foreclosure prevention effort established under the U.S. Treasury’s Hardest Hit Fund. Earlier this month, state officials announced they are dropping the requirement from the...

One of the trickiest challenges presented to the Consumer Financial Protection Bureau as part of its project to harmonize the mortgage disclosures consumers receive will be the settlement disclosure, a top official at the CFPB indicated recently. The settlement disclosure “is where we’re in a bit of a difficult situation, because Congress, al-though they directed us to combine the Truth in Lending Act and Real Estate Settlement Procedures Act disclosures, did not amend the underlying statutes,” said Benjamin Olson, managing counsel in the office of regulations at the CFPB, during a webinar sponsored last...

Because the mortgage industry is so focused on staying on top of regulatory changes, adopting new technology has taken a back seat, according to a vendor of a cloud-based management tool. “When you’re up to your ankles in alligators, it’s easy to forget your goal is to drain the swamp,” said Brian Coester, CEO of Coester Appraisal Group. This year, the company launched Cloud Control, a web-based management technology that integrates different aspects of the appraisal process – from compliance to social media to real-time data – in a cloud-based system. “There’s a huge backlog in terms of what people...

Seven months after launching as a new wholesale and retail mortgage firm with national ambitions, Bexil American Mortgage originated its first loan, highlighting the current barriers to entry in the mortgage industry. The company, founded by industry veteran John Robbins, has obtained 18 state licenses with others pending, as well as approval from the Department of Housing and Urban Development, the FHA, Veteran’s Administration and the Department of Agriculture. Although he has started and sold two previous mortgage companies, he said “it’s a significantly different environment. It’s been more challenging...