Federal financial regulators are still sifting through stacks of criticism about their controversial risk-retention proposal for the MBS and ABS market and have not yet decided whether to start over again with a new proposed rule, as most industry groups have urged them to do. The agencies are also getting a lot of push from Capitol Hill to re-think the original proposal, which was released in late March. “I am very concerned that if the qualified residential mortgage definition being worked out by regulators isn’t broad enough, it could hurt the housing market, especially...

The Federal Housing Finance Agency issued a final rule last week which clears the way for the Federal Home Loan Banks to voluntarily merge, but it remains to be seen whether any of the 12 FHLBanks desire consolidation.The final rule, published in the Nov. 28 Federal Register, is largely similar to the proposal the FHFA issued one year ago following “a number of minor revisions” to address concerns raised by commenters.

The Federal Housing Finance Agency needs to be much more hands-on and engaged in its oversight of Fannie Mae and Freddie Mac, according to the Finance Agency’s official watchdog.The FHFA Office of Inspector General’s conclusion is not new, but the OIG doubled down on its criticism of the agency last week both in its Semiannual Report to Congress and in written testimony submitted to the House Financial Services Subcommittee on Oversight and Investigations.

The Federal Housing Finance Agency last week announced two new outside hires to fill the slots of chief operating officer and the agency’s deputy director of division enterprise regulation.As the FHFA’s COO, Richard Hornsby will be responsible for the strategic management of the agency’s operations and will oversee the FHFA’s administrative and support services, including budget and finance, human resources and information technology.

The Department of Housing and Urban Development is weighing a number of options, including raising insurance premiums for the FHA Mutual Mortgage Insurance Fund as political concerns grow that the program may need a taxpayer bailout. Testifying before the House Financial Services Committee last week, HUD Secretary Shaun Donovan said he plans to include premium increases and other proposals in the department’s fiscal 2013 budget proposal to bring the FHA’s excess capital reserves back to the required level. Donovan said the FHA continues to evaluate policy options to...

President Barack Obama and his Democrat allies on Capitol Hill initiated a multi-prong attack against their Republican opponents this week in an effort to put them on the hook in the 2012 election over their refusal to allow an up-or-down vote on Richard Cordray, the president’s nominee to head the controversial Consumer Financial Protection Bureau. The initiative started this weekend, when the White House released a report and began an accompanying media blitz, warning of the dangers American consumers face in the financial marketplace without a director at the...

Massachusetts Attorney General Martha Coakley sued five major lenders late last week for allegedly illegal foreclosure practices. One of the firms, GMAC Mortgage, responded by pulling out of Massachusetts lending, prompting Coakley to request a Congressional investigation of GMAC. This week, the AGs of California and Nevada followed suit with a joint announcement of a dual mortgage fraud probe. “We have two clear goals with this lawsuit,” Coakley said. “One is to provide for real accountability for the roles the banks have played in unlawful and illegal foreclosures and second...

The proposal drafted by a senior House Republican that aims to lure private capital into the secondary mortgage market received the general support of industry witnesses at a hearing this week, but Democratic lawmakers say repealing key features of the Dodd-Frank Act would be a non-starter. The Private Mortgage Market Investment Act, drafted but not yet filed by Rep. Scott Garrett, R-NJ., would create a heavily regulated mortgage-backed securities market made up solely of private entities that would function with no federal guarantee at all. Under the bill, the Federal Housing...

Patton Boggs, a large Washington DC-based law and lobbying firm, has seen an en masse exodus of its mortgage banking lawyers. Ballard Spahr created a Mortgage Banking Group for the three Patton Boggs partners and an associate, while Dykema welcomed two senior attorneys to its growing Financial Services Regulatory and Compliance practice. Patton Boggs did not return calls for comment regarding the future of its own mortgage practice, and the departed lawyers would not speculate as to the future of their former firm. Partners Richard Andreano, John Socknat and Michael Waldron...

In a move that further complicates the 50-state settlement discussions between the mortgage servicing industry and state attorneys generals, Massachusetts Attorney General Martha Coakley, D, has sued a handful of top mortgage lending banks for allegedly pursuing illegal foreclosures and “deceptive loan servicing.”The targets of Coakley’s actions are Bank of America, Wells Fargo, JP Morgan Chase, Citi and GMAC, as well as Mortgage Electronic Registration System, Inc.“The single most important thing we can do to return to a healthy economy is to address this foreclosure crisis,” Coakley said. “Our suit alleges that the banks have charted a destructive path by cutting corners and rushing to foreclose on homeowners without following the rule of law. Our action today seeks real accountability for the banks’ illegal behavior and real relief for homeowners.”