The FHA could lose 7 percent, or $2.8 billion, of its current business if loan limits are lowered this year, according to a government analysis of the impact of new lower loan limits going into effect in the fall. Barring congressional action, the temporary FHA loan limits will revert by statute to the lower loan limits determined by the Housing and Economic Recovery Act for loans insured by the FHA on or after Oct. 1. The FHA single-family loan limit, which is tied to the conforming loan limit, continues to start at $271,050 in low-cost areas and goes as high as $729,750 in high-cost areas of the country. On Oct. 1, however...

The Financial Industry Regulatory Authority last week fined Credit Suisse Securities and Merrill Lynch for alleged misrepresentation of delinquency data and inadequate supervision of subprime residential MBS that ended up misleading investors about the performance of pool assets. “FINRA found that in 2006, Credit Suisse misrepresented the historical delinquency rates for 21 subprime RMBS it underwrote and sold,” the independent regulator said in a statement. “Although Credit Suisse knew...

The Department of Justice has stepped up its fair lending enforcement initiatives and more cases are anticipated in the future, but with them comes a dilemma, according to industry sources. The DOJ currently has five lawsuits pending against lenders and several investigations, a DOJ insider said. The official said cases involve redlining, wholesale pricing, product steering and retail pricing. Wholesale issues and broker fee cases are likely to continue popping up, the source said. “The other big development for 2011 is going to be the...

Congressional Republicans have at least temporarily prevented the Obama administration from appointing Elizabeth Warren as the first director of the Consumer Financial Protection Bureau. There was speculation that the White House would use the recess scheduled for the Senate this week to appoint Warren to lead the CFPB, an agency she helped design. Last week, 20 Senate Republicans wrote House Speaker John Boehner, R-OH, urging him not to pass the Senate’s adjournment resolution, keeping the Senate at least nominally in session and preventing Pres. Obama from making any recess appointments. In 2007, Democrats in the Senate used...

While federal agencies gather comments on a proposed rule to establish margin and capital requirements for various swap entities, experts say it’s not altogether clear how the proposed rule would apply to the GSEs. Final comments are due June 24 on a rule proposed by five federal agencies that would require swap entities regulated by the agencies to collect minimum amounts of initial margin and variation margin from counterparties to non-cleared swaps and non-cleared security-based swaps. The five agencies that issued the proposed rule last month are the Federal Reserve, the Farm Credit Administration, the Federal Deposit Insurance Corp...

The Federal Housing Finance Agency has gone to court in order to deal itself into a wrongful termination suit filed last year by a former Fannie Mae executive against the GSE. According to papers filed in the U.S. District Court for the District of Columbia, the FHFA sought a temporary stay of the lawsuit, citing its authority as Fannie’s conservator under the Housing and Economic Recovery Act of 2008. “The conservator’s participation will aid the parties and the court in resolving the issues presented in this action, including the issue of Fannie Mae’s status vis-à-vis the federal government as it relates to the plaintiff’s claims,” said the Finance Agency in...

Testifying before the House Financial Services Subcommittee on Capital Markets and GSEs this week, the head of the Federal Housing Finance Agency took issue with some of the proposed bills in the legislative package intended to wind down Fannie Mae and Freddie Mac. “I appreciate the effort in these and other bills to begin moving towards a final resolution of the enterprises in conservatorship, but I also recognize the critical and contemporaneous need to provide market participants with greater clarity and assurance about the ultimate role of the government in housing finance beyond the issues surrounding the enterprises,” said...

The Government Accountability Office noted there is a little room for improvement in the Federal Housing Finance Agency’s internal controls and accounting procedures but the Finance Agency is otherwise operating well. Mandated by the Housing and Economic Recovery Act of 2008, the GAO said its audit of the FHFA’s fiscal years 2010 and 2009 financial statements revealed deficiencies in the way the Finance Agency disposed of its information technology property and equipment. The GAO also found that the FHFA did not always verify vendor invoice amounts prior to payment. Although the two issues do not represent “material weaknesses or significant deficiencies” on an order that...

The Federal Housing Finance Agency last week issued a final rule regarding the FHLBanks which limits the Banks’ mortgage-backed securities holdings, especially non-agency MBS. In its notice, published in the May 20 Federal Register, the FHFA said it is re-organizing and re-adopting existing investment regulations that were previously issued by the Federal Housing Finance Board. The final rule will retain the Finance Board’s Financial Management Policy provision limiting MBS holdings to 300 percent of a Bank’s capital. “Contrary to suggestions that the 300 percent of capital limit was inflexible and outdated, FHFA believes the limit reasonably serves to control Bank investment activity that does not...

Mortgage lenders that are anxious about complying with the call report requirements of the National Mortgage Licensing System might want to consider a new automated solution developed by LendingSpace, a Fulton, MD-based technology firm. “Lenders who find themselves using a patchwork of their existing technologies to meet these requirements will spend a great deal of time and resources to ensure impeccable compliance,” said Ravi Varma, CEO of LendingSpace. “With a click of a mouse, the Automated Mortgage Call Report function in our ComplianceOne suite gathers the information from the loan origination system, and formats it so that it’s ready for...