The mortgage market is just one month into the world of qualified mortgage lending under the Consumer Financial Protection Bureau’s ability-to-repay rule. But behind the scenes, investors, legal advisors and technology vendors are working to get ready to enter the non-QM space. “I can tell you, at least from the investor side, from the number of investors that I talk to – and some of these are cradle-to-grave guys that have originating arms in their organizations, or maybe correspondent networks for which they’re buying – they are building infrastructure and capability to process and buy these non-QM type loans,” said Dave Hurt, vice president at CoreLogic. “So there is genuine interest and significant enough confidence that there will be a market that they’re making investments both in technology and infrastructure to do that.” And it’s not...
Despite new public pronouncements by lawmakers and administration officials that housing finance reform remains a “top priority,” industry observers warn there is little chance of legislation clearing Congress, ensuring a status quo that leaves the uber-profitable Fannie Mae and Freddie Mac in place and pumping money into the Treasury. Senate Banking, Housing and Urban Affairs Committee Chairman Tim Johnson, D-SD, and Ranking Member Mike Crapo, R-ID, broke a long public silence by reiterating their intention to push bipartisan housing finance reform in a statement on Wednesday.
Fannie Mae and Freddie Mac – during two different periods last year – spent nearly $20 billion buying roughly 85,000 loans despite clear warnings or questions about the appraisals, according to a new audit from the Inspector General of the Federal Housing Finance Agency. As part of its report, the FHFA-OIG has made 14 recommendations to FHFA regarding the matter, calling on the regulator to ensure the GSEs make better use of appraisal information generated by a uniform collateral data portal the agency told the two to develop in 2010.
Morgan Stanley & Co. this week disclosed in a filing with the Securities and Exchange Commission that it likely will pay $1.25 billion to settle charges that it sold faulty non-agency mortgage-backed securities to Fannie Mae and Freddie Mac in the years leading up to the financial crisis. The settlement, however, is not final “and there’s one more stop to it,” said one observer close to matter.
Government lawyers have run the numbers again and have now concluded that Bank of America should pay a lot more than the initially-sought $864 million penalty over mortgage fraud related to Countrywide Financial’s “Hustle” program. The Justice Department filed papers with Manhattan Federal Judge Jed Rakoff Wednesday requesting the Charlotte-based BofA be fined $2.1 billion for Countrywide’s fraudulent sale of toxic mortgages to Fannie Mae and Freddie Mac in the years leading up to the financial crisis.
A Manhattan federal bankruptcy court last week approved Lehman Brother’s proposed $2 billion-plus settlement that would end an $18.9 billion claim filed against the defunct investment bank by Fannie Mae over soured mortgage securities. Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York signed off on the settlement agreement between Lehman Brothers Holdings Inc. and the government-sponsored enterprise, as well as Lehman’s wholly owned subsidiaries Aurora Commercial Group and Aurora Loan Services. ALS was a large Alt A lender/servicer.
Also, the CFPB is considering requiring more underwriting and pricing information, such as the interest rate, total origination charges, and discount points.
Among other issues, the GAO found that for three of the servicers, their denial rates were significantly higher for Hispanics than for the comparison population of non-Hispanic whites.
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