As the guard prepares to change in a week, Treasury Secretary Jacob Lew said in an exit memo released last week that only legislation can comprehensively address “the ongoing shortcomings of the housing finance system.” In the memo, Lew documents the Treasury’s progress over the last eight years and outlines his goals for the future of the department. He said that fixing the housing finance system remains the major unfinished piece of work of post-financial crisis reform. While he said the housing market has improved, Lew acknowledged that many homeowners and neighborhoods continue to struggle. “A starting point for such legislation should be the principles President Obama laid out in 2013, which stressed a clearly-defined role for the...
Moody’s says HAMP Replacement Program Credit Neutral for CRTs. The GSEs’ new Flex Modification foreclosure prevention program that will replace the expired Home Affordable Modification Program has a neutral credit impact on GSE risk-risk transfer deals. Moody’s said that the volume of modifications and the re-default performance under the Flex program will be comparable to modification levels and performance under the current programs. The firm also noted that the new program will not result in increased modification volume. Servicers have until Oct. 1, 2017, to implement the new program.Freddie’s Recent ACIS Transaction. Last week, Freddie Mac announced its last Agency Credit Insurance Structure of 2016 in the form of a $285 million offering. The GSE said it...
It’s been no secret in Washington financial circles that shortly after Donald Trump was elected president, the decision was made by his “team” to fire CFPB director Richard Cordray...
Judge William Pauley of the U.S. District Court for the Southern District of New York has approved a $335 million settlement by Bank of America with three pension funds and other investors to resolve a securities class-action against the bank. The settlement is one of the largest class-action settlements of securities-purchase claims arising from the financial crisis, according to the Pennsylvania Public School Employees’ Retirement System (PSERS), the court appointed lead plaintiff in the six-year old case. Other investors include...
Change in the political balance in Washington that put the GOP in control of both houses of Congress and the executive branch has fueled speculation that something will finally be done to resolve the conservatorships of Fannie Mae and Freddie Mac. As in the past, there is no shortage of competing proposals. At an Urban Institute seminar this week, Rick Lazio, former Republican congressman from New York, said...
Capital requirements regarding bank holdings of non-agency MBS increased significantly after federal regulators implemented Basel III reforms in 2014. And while banks have largely been reluctant to re-enter the market for non-agency MBS issuance, a recent report by the Government Accountability Office suggests that the impact of bank involvement in the non-agency MBS market is unclear. The GAO was asked to explain how capital requirements for a mortgage depend on how the loan is financed and how the requirements have changed since the financial crisis. The report was requested by Sen. Richard Shelby, R-AL, who until recently was the chairman of the Senate Committee on Banking, Housing and Urban Affairs. The GAO noted...
With financial markets awaiting, with some uncertainty, the public policy positions of the incoming Trump administration and the new Congress, industry analysts say ABS investors can expect most sectors to turn in stable performances in 2017. “As we look back on 2016 and consider the 2017 global structured finance outlook, most markets and their credit conditions seem favorable, and in some cases, even ideal. However, 2017 has many unknowns, especially the specific policies and priorities that will be adopted by the new U.S. administration,” said analysts with S&P Global Ratings in a recent outlook report. “Some would suggest government-sponsored enterprise privatization is possible, risk retention could be revised, and an appropriate/globally consistent capital treatment for structured finance products could be approved.” Further, “For the most part, we expect...
The New York Department of Financial Services made some concessions to industry participants by revising proposed cybersecurity standards. Some mortgage-industry officials were happy with the revisions while reiterating concerns about the proposed standards. The NYDFS first proposed cybersecurity standards in September. The proposal was the first of its kind from a state regulator and more prescriptive than guidance from the Federal Financial Institutions Examination ...
Mortgage compliance experts say there’s still a strong need for the Consumer Financial Protection Bureau to provide more guidance about acceptable business relations under Section 8 of the Real Estate Settlement Procedures Act. One of the issues that came to the fore in the bureau’s enforcement action against PHH Mortgage was lenders’ relationships under marketing services agreements. Even though banks these days may be using MSAs to a lesser extent than nonbanks, there is still a need for the CFPB to more clearly delineate do’s and don’ts. “On the lender side of the mortgage industry, there is...
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