The supervision of examiners in the Division of Federal Home Loan Bank Regulation has been lax when it comes to making sure deficiencies within the FHLBanks are corrected, according to a recent Federal Housing Finance Agency Office of the Inspector General report. The IG reviewed a sample of nine matters requiring attention (MRA) that the division issued from January 2014 through December 2015. When it comes to correcting serious supervisory matters, the IG said that the bank regulator has been inconsistent in following FHFA requirements. For two of the MRAs, examiners determined that the affected FHLBank made no progress in remediating the deficiencies and reissued MRAs with the same exact terms.

The Federal Housing Finance Agency has included more details regarding how it will monitor the examinations of Fannie Mae and Freddie Mac in its annual performance plan for fiscal year 2017, released last week. Over the past year, the FHFA’s Office of Inspector General has blasted the regulator for not completing targeted examinations on time and inadequate follow-up on what were deemed matters requiring attention (MRAs). The new plan noted that the GSEs will continue to address MRAs by submitting remediation plans to FHFA for review. Each non-objected remediation plan will include a timeframe for completion within the fiscal year the MRA was issued or beyond. FHFA added that Fannie and Freddie management are responsible for...

A judge ruled that the city of Chicago cannot impose a real estate transfer tax on buyers who purchased homes sold by the GSEs. Even though federal law does not allow local governments to collect taxes to property held by federal lenders, the GSE accused the city of circumventing the law by waiting for properties to be sold then sending the buyers a tax bill. This ruling stems from a federal court case last October in which Fannie Mae and the Federal Housing Finance Agency sued the city for trying to collect taxes from buyers who purchased foreclosed homes from the GSE.

Further empirical confirmation of a recovering mortgage market continued to accumulate at the CFPB during the third quarter, as related consumer complaints dropped 19.8 percent ...

The Structured Finance Industry Group is preparing to publish standards that aim to increase transparency for representations and warranties on new non-agency MBS, according to officials at the trade group. Eric Kaplan, a managing partner at Ranieri Strategies, said SFIG will release one or two “green papers” this year as part of the group’s RMBS 3.0 effort to revive issuance of non-agency MBS. Kaplan detailed the plans along with Daniel Goodwin, director of mortgage policy at SFIG, at the recent ABS East conference produced by Information Management Network. SFIG has released...

Financial institutions that are under scrutiny for questionable practices involving residential MBS can avoid a lot of grief and legal expenses if they cooperate early in the investigation, according to the Department of Justice’s chief overseer of civil litigation. In recent remarks at the Society of Corporate Compliance and Ethics’ annual conference in Chicago, Principal Deputy Associate Attorney General Bill Baer underscored the wisdom and benefits of early cooperation in a government RMBS inquiry. There would have been...

U.S. Court of Federal Claims Judge Margaret Sweeney’s ruling, released last week, raises new questions about the validity of government efforts to keep thousands of other documents secret in a Fannie Mae and Freddie Mac shareholder case over the net worth sweep imposed by the Treasury Department and the Federal Housing Finance Agency, according to shareholder advocates. In Fairholme Funds Inc. v. United States, et al, shareholders argue that the net worth sweep of the government-sponsored enterprises’ profits is unfair, and they have scored significant victories in getting access to various written communications to prove their claim. The recent batch of documents Sweeney released to the plaintiff’s attorneys show...

Since the repurchase and indemnification phenomenon is unlikely to disappear anytime soon, many correspondent lenders, credit unions and other recipients of a repurchase/indemnification demand want to know how best to respond in order to mitigate potential damages. During a recent webinar sponsored by American Mortgage Law Group, AMLG Senior Managing Member James Brody said there are many different factors to consider. “One of the things that really helps in getting any resolution is...

RBS Securities has agreed to pay $120 million to the state of Connecticut to resolve an investigation into its underwriting of residential MBS shortly before the 2008 collapse of the financial markets. CT Attorney General George Jepsen and Department of Banking Commissioner Jorge Perez announced the agreement, which, they said, is the largest single settlement in Connecticut’s history. It also ends a four-year state investigation into RBS’s securities underwriting and due diligence practices. At issue were...

PHH Corp. this week scored a key legal victory in its battle with the Consumer Financial Protection Bureau over captive reinsurance and the Real Estate Settlement Procedures Act. But despite this good news, there are still clouds over the nonbank. The “worst” of the recent spate of bad news for the company surrounds the early October disclosure that Merrill Lynch is breaking all ties to PHH when it comes to private-label originations and servicing. The effective date for the end of the contract is...