Contributing Treasury’s warrants for common stock of Fannie Mae and Freddie Mac to the affordable housing funds is one of the ways that the Leadership Conference on Civil and Human Rights says the GSEs can help earmark financial resources toward affordable housing. In a June report published by the Leadership Conference, the organization offered a few of its housing finance recommendations to support affordable housing goals. The report noted that often lost in public discussion of the GSE conservatorships is the fact that the Treasury owns warrants for 79.9 percent of the common stock of both Fannie and Freddie. “The value of the warrants could easily exceed $100 billion,” the group said in its recommendation.

The Federal Housing Finance Agency settled $10.3 billion in legal claims in 2014 stemming from 11 non-agency MBS issues that go as far back as 10 years ago, noted the FHFA’s annual report to Congress released this week. These lawsuits were filed in 2011 against financial institutions along with some of their executive management including officers and directors. The suits alleged violations of federal securities laws and state laws in the sale of the non-agency MBS to Fannie Mae and Freddie Mac that took place in a two-year period during the housing downturn between 2005 and 2007. A number of issues contributed...[Includes one data table]

Most participants on the Federal Open Market Committee anticipate an increase in interest rates sometime later this year, and not delaying until 2016, the FOMC indicated after its two-day meeting concluded Wednesday afternoon. Meanwhile, the Fed’s support of the housing market through reinvesting in MBS continues as it has, with no change in the U.S. central bank’s thinking when it comes to the management of its balance sheet. “The committee reaffirmed...

A ruling late last week by the New York Court of Appeals will likely help provide certainty to non-agency MBS issuers regarding liability from breaches of representations and warranties while limiting claims from investors. The appeals court confirmed a lower court’s ruling in ACE Securities v. DB Structured Products, determining that the statute of limitations for claims of breaches of representations and warranties starts when a deal is closed – not when a potential breach is discovered. “Representations and warranties concern...

There was widespread expectation that the latest round of seller-friendly changes to the government-sponsored enterprises’ representation-and-warranty framework would encourage lenders to liberalize their credit overlays. So far in 2015, the data aren’t showing it. In fact, the case could be made that credit trends are going the other way. The average credit score for purchase mortgages securitized by Fannie Mae and Freddie Mac was...[Includes one data table]

There is a surprising number of smaller mortgage lenders who think they can comply with the Consumer Financial Protection Bureau’s pending integrated-disclosure rule with a substantial amount of manual practices and processes – as opposed to technological automation – and they may well be in for a rude awakening when the new rule kicks in. According to Rod Alba, senior regulatory counsel at the American Bankers Association, approximately one quarter of ...

The guidance explains how the FHA intends to categorize defects found in endorsed single-family mortgages.

If you are advertising or marketing mortgage products in Spanish, compliance experts suggest you should provide all requisite disclosures and servicing in Spanish.

A California superior court last week ruled that Gov. Jerry Brown, D, illegally diverted more than $331 million from a landmark mortgage settlement fund to resolve a state budget deficit. The funds represented California’s share in the historic 2012 national mortgage settlement between federal enforcement agencies and 49 state attorneys general and the nation’s five largest mortgage servicers – Wells Fargo Bank, Bank of America, JPMorgan Chase, Citigroup and Ally Financial. The banks paid...

Federal financial institution regulators have approved a long-anticipated final rule that revises mandatory flood-insurance and escrow requirements as well as force-placed provisions. The Federal Deposit Insurance Corp. board of directors adopted the final rule unanimously. It combines two proposed rules issued in 2013 and 2014 that would implement certain provisions in the Biggert-Waters Flood Insurance Reform Act of 2012 and subsequent changes made by the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA). Biggert-Waters exempts...