Social Finance, the fledgling “marketplace” lender, is funding enough home mortgages on a monthly basis that it’s now scouting for opportunities in the secondary market, according to lending officials who have met with the firm’s management team. Among the options being considered is raising money to form a real estate investment trust, a vehicle that would provide a balance sheet where whole loans could reside. However, it’s unclear at this point if Social Finance, or “SoFi” as it is known, has any plans for securitizing residential product. Company officials including Michael Tannenbaum, who serves as vice president of mortgages for the startup, and William Jarve, in the firm’s capital markets group, declined...
Issuers of publicly-registered ABS are adjusting to so-called Regulation AB2 requirements established by the Securities and Exchange Commission, but observers say the pro-investor rules have increased issuer costs and slowed issuance. One of the biggest challenges for issuers from Reg AB2 has been the requirement for an asset-representations reviewer. The rule requires publicly-registered MBS and ABS to include an asset-representation reviewer whose work can be triggered by a certain level of delinquent assets in a pool or by an investor vote. Susan Thomas, the associate general counsel of Ford Motor Credit Company, said...
The Federal Reserve’s Open Market Committee decided this week, as expected, to delay its next rate increase, citing concerns about global economic and financial developments, leaving the federal funds target range at 0.25 percent to 0.50 percent until June at the earliest, according to a consensus of market participants and observers. “Our decision to keep this accommodative policy stance reflects both our assessment of the economic outlook and the risks associated with that outlook,” said Fed chair Janet Yellen after the committee’s two-day meeting concluded Wednesday afternoon. Looking ahead, then, with appropriate monetary policy, the FOMC continues...
The development of the “deal agent” concept and the recommendations to standardize documentation are crucial to the revival of the non-agency MBS market, according to the Urban Institute. However, more work needs to be done to refine and implement the principles underlying the deal-agent concept and document standardization, said Laurie Goodman, director of the Housing Finance Policy Center at UI, in a new report. Many investors remain...
Increases in demand on the FHA single-family program are having collateral implications for the integrity of Ginnie Mae’s MBS programs, including the potential for more fraud, warned the Department of Housing and Urban Development inspector general. Testifying during a recent Senate budget hearing, HUD Inspector General David Montoya said Ginnie issuer defaults historically have been infrequent, involving small to moderate-size issuers. “However, major unanticipated issuer defaults beginning in 2009 have led...
After his request was rejected by the Federal Housing Finance Agency, Tim Pagliara, director of Investors Unite, filed a lawsuit in state courts this week seeking to gain access, as an individual stockholder, to the corporate records of Fannie Mae and Freddie Mac. With Fannie chartered under Delaware’s law and Freddie under Virginia’s jurisdiction, Pagliara, along with several other shareholder plaintiffs, argue that the U.S. Treasury Department’s sweep of the GSEs’ profits is illegal under state law. His suit, in particular, focuses on allowing him to inspect the books and records of Fannie and Freddie to get a better idea of the circumstances surrounding the sweep. Under the terms of the net worth sweep, the GSEs...
The Federal Housing Finance Agency is looking to consolidate four outstanding Fannie Mae and Freddie Mac shareholder cases into one location and said it expects more cases will be filed soon. This week, the agency filed a request to transfer cases pending in four district courts to the U.S. District Court in Washington to discourage “copycat” claims and ensure consistent outcomes. “The claims and relief sought in each of the four related cases are substantially similar,” the FHFA said in court documents. “As a practical matter, plaintiffs are relitigating the same legal issues over and over in hopes of finding a court that will rule in their favor.” So far, there have been 15 complaints challenging the Treasury sweep and...
“The mortgage industry is in big trouble if companies shut their doors based on a missing signature. Yes, TRID does that,” said Paul Hindman, managing director of Grid Origination Services.
RSS