Candidate Clinton Wants to Defend the CFPB. Former Secretary of State Hillary Clinton, in a neck-and-neck race for the Democratic Party’s nomination for the White House with independent Vermont Sen. Bernie Sanders, vowed recently to defend the CFPB. In a package of proposals dubbed “Breaking Every Barrier Agenda: Revitalizing the Economy in Communities Left Behind,” the candidate said she believes “we must never again allow borrowers to be taken advantage of in the rush for corporate profits.” Clinton also pointed out that prior to the financial crisis, she pledged to create a Financial Product Safety Commission, as a counterpart to the CFPB, to crack down on abusive and predatory lenders and to protect consumers. ...
The False Claims Act could potentially apply to Fannie Mae and Freddie Mac loans in the future, thanks to increased GSE cases and a broadened claim definition. The risk of the Department of Justice applying the FCA to GSE loans may seem remote, said Andrew Schilling, partner with BuckleySander LLP, but he isn’t counting it out. …
Mortgage originators selling loans into MBS last week likely were hit with “pair-off” fees from secondary-market investors who were expecting delivery of higher-yielding mortgages, a proposition complicated by the sudden downdraft in rates. As one secondary market executive noted: “A forward sale into an MBS is not a perfect hedge. Then again, nothing is a perfect hedge.” Originators that fund billions of dollars each quarter use...
Secondary market participants are once again urging government regulators to revise pending margin requirements for the to-be-announced MBS market, lest they negatively disrupt the space and possibly raise the cost of providing mortgage credit. At issue is SR-FINRA-2015-036, a proposal from the Financial Industry Regulatory Authority to establish margin requirements for the TBA market under FINRA Rule 4210. Previously, the Securities Industry and Financial Markets Association urged...
Issuers and investors involved in the securitization market are pushing the Basel Committee on Banking Supervision to revise its proposed capital standards for “simple, transparent and comparable” securitization. The BCBS issued a proposal in November and the comment period closed this month. The Structured Finance Industry Group reiterated concerns about international regulatory efforts that will create a “patchwork” of standards and limit securitization, while others pushed back on the exclusion of synthetic transactions from the proposed criteria for STC transactions. “We continue...
The Bank of New York Mellon, acting as trustee, has petitioned the New York State Supreme Court for instructions for paying out Bank of America’s $8.5 billion cash settlement with Countrywide MBS investors, which could potentially alter the order of payment, according to an analysis by Moody’s Investors Service. The governing MBS documents and the settlement agreement are complicated, nuanced and ambiguous, the rating service noted. Without guidance from the state court, BNYM, as trustee for 530 RMBS trusts, could decide on a payout that could favor certain bondholders unexpectedly. The massive payout has been delayed...
Although lenders like to complain about the new integrated disclosure rule known as TRID, there has been one major benefit for people looking for employment in the mortgage industry: the controversial rule has created jobs at many lending shops. According to managers interviewed by Inside Mortgage Trends the past two weeks, almost across the board, originators have hired new staff to deal with compliance paperwork, the processes and the technology ...
The Obama administration released its budget proposal for 2017 last week and it illustrates a key challenge to managing reform. How can you phase out the GSEs while at the same time planning to use profits from them? The budget emphasized that the housing finance system must be reformed, and the GSEs should be wound down in order to finish addressing the weaknesses exposed by the financial crisis. The administration’s fiscal 2017 budget proposal estimates that Fannie Mae and Freddie Mac will pay $151.5 billion in dividends to the government over the next 10 years, on top of the $241.2 billion in dividends they already paid as of the end of 2015.
Fannie Mae’s Latest CAS Sells First-Loss Position. Fannie priced its latest credit risk sharing transaction under its Connecticut Avenue Securities series last week. For the first time, it is selling a portion of the first-loss position, further reducing taxpayer exposure to credit losses. To promote additional liquidity, Fannie for the first time sought a credit rating for the M2 notes in a CAS transaction. Servicer Expense Reimbursement Notification. Fannie Mae Expense Reimbursement will be consolidating the available expense reimbursement claim line item categories and subcategories in the Black Knight Financial Services LoanSphere Invoicing Application on March 21, 2016. This update will streamline the claim line item choices in the application for improved consistency in submitting and processing expense reimbursement requests. Freddie Prices...
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