The share of new home mortgage originations packaged into MBS drifted slightly lower in the first quarter of 2016, a new Inside MBS & ABS analysis reveals. Some $255.7 billion of newly originated mortgages were pooled in MBS in the first three months of the year, representing a paltry 67.3 percent of the estimated $380 billion of first-lien originations in the primary market. For the purposes of calculating securitization rates, loans aged more than three months and modified loans are excluded from agency MBS issuance figures. Fannie Mae and Freddie Mac securitized...[Includes one data table]
It was thought that with the Consumer Financial Protection Bureau working on a new regulation to clarify key portions of the TRID integrated-disclosure rule and assignee liability that the scratch-and-dent market in TRID-defective loans would grind to a halt. But that’s not how it’s turned out. According to investors in “S&D” TRID mortgages and traders who play in the space, auctions of mortgages with errors (of all sorts) have continued...
Investors who are suing the government over the terms of the conservatorships of Fannie Mae and Freddie Mac said the 53 documents recently made public solidify their claim that the government-sponsored enterprises had plenty of capital and a government bailout was unnecessary. The Treasury Department provided the documents to plaintiffs last week as part of a court case in Kentucky. “The newly de-designated documents also suggest...
A heated partisan debate broke out during a House subcommittee hearing late last week on whether multi-billion dollar settlements designed to resolve legacy MBS cases undermine Congress’ power to appropriate funds. Democrats and Republicans on the House Financial Services Subcommittee on Oversight and Investigations debated whether federal law allows banks to donate money to third-party charities to fulfill some of its settlement obligations. Ranking Minority member Al Green, D-TX, said...
The lender allegedly focused on profit and growth at the expense of loan quality and knew about the inefficiencies in 39 of its 125 branches, charges it denies.
Bank of America escaped having to pay $1.2 billion in penalties when a federal appeals court dismissed the Federal Housing Finance Agency’s allegations of fraud this week. The appeal stemmed from a 2013 verdict stating that Countrywide Home Loans, a subsidiary of BofA, was liable for damages caused by selling bad loans to Fannie Mae and Freddie Mac during the financial crisis. Whether or not a breach of contract can also support a claim for fraud was the argument and primary factor in the judge’s decision. It seems that even if a loan seller is guilty of an intentional breach of contract, it’s not considered fraud.
A recent closing survey of homebuyers, title agents, real estate attorneys and escrow agents by the American Land Title Association found that an increasing number of borrowers are reviewing their mortgage documents before they close on their new home under the integrated disclosure rule known as TRID. Among the findings, 92 percent of surveyed homebuyers are taking time to review their mortgage documents before the closing. “This compares to only 74 percent of ...
The rapid growth among nonbank mortgage servicers and its potentially adverse effect on consumer experience became a challenge in 2015, underscoring the importance of effective technology and the underlying systems that comprise a servicing platform, according to the latest state supervisory report on non-banks. The report by the Conference of State Bank Supervisors (CSBS) and the Multi-State Mortgage Committee (MMC) features the result of last year’s review of supervisory examinations and risk-assessment of nonbank mortgage servicers. The MMC is the oversight body responsible for the coordination and supervision of multi-state mortgage entities.
The Federal Housing Finance Agency Office of Inspector General reported that the compensation resulting from six months of probes into criminal and civil investigations amounted to $3.6 billion. The bulk of the monetary damages awarded, more than $3 billion, was in civil settlements, while more than $480 million was from criminal fines, restitutions, forfeitures, and settlements. There were a total of 53 indictments, five trials, 73 convictions and 75 sentencings. Laura Wertheimer, inspector general at the FHFA, said when there’s not sufficient evident to refer a case for criminal charges, the FHFA will work to bring civil claims. One of those recent civil settlements was with Morgan Stanley, which agreed to pay a $2.7 billion penalty to resolve claims related to its mortgage-backed securities.
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