Bank of New York Mellon has come under scrutiny for its actions in the proposed $8.5 billion settlement involving Bank of America and investors in 530 non-agency MBS issued by Countrywide Financial. A trial to approve the settlement regarding repurchase requests started in June and is on a break until early September. While the proposed settlement involves a payout from BofA, which acquired Countrywide, the settlement is an agreement between BNYM and 22 institutional investors represented by the law firm of Gibbs & Bruns. The agreement was reached under Article 77 which allowed BofA to have the settlement apply to all investors in the Countrywide securities in question. “I can honestly say...
More than a year after it was issued under court-ordered duress, the Federal Housing Finance Agency has withdrawn its proposed rule concerning Fannie Mae and Freddie Mac underwriting standards related to mortgages affected by Property Assessed Clean Energy programs. Local governments use the PACE Program, which is part of the American Recovery and Reinvestment Act of 2008, to provide financing secured by a priority lien on the property to homeowners for the purchase of energy-related home improvements. While 27 states and the District of Columbia have legislation in place to permit PACE financing for “green” homes, in July 2010 Fannie and Freddie stopped purchasing PACE-related mortgages that had automatic first-lien priority over previously recorded mortgages.
The Federal Housing Finance Agency announced last week it has reached a settlement with UBS Americas for nearly $900 million to cover claims of alleged violations of federal and state securities laws regarding non-agency residential mortgage-backed securities purchased by Fannie Mae and Freddie Mac. Under the terms of the agreement, the Swiss bank will pay some $885 million divided roughly in half between the two GSEs. UBS will pay Fannie approximately $415 million and $470 million to Freddie to settle claims related to residential MBS offerings between 2004 and 2007. “The satisfactory resolution of this matter provides greater clarity and certainty in the marketplace and is in line with our responsibility for preserving and conserving Fannie Mae’s and Freddie Mac’s assets on behalf of taxpayers,” said FHFA Acting Director Edward DeMarco.
A federal district court in Illinois did not err in dismissing a lawsuit by investors against a hedge fund over nearly $7 million lost in Freddie Mac stock before the GSE was forced into conservatorship, according to a recent ruling by the Seventh Circuit Court of Appeals. The appeals court agreed with the lower court that the plaintiffs failed to present any valid cause of action.
Certain provisions in the Consumer Financial Protection Bureau’s proposed changes to its mortgage servicing rule conflict with Fannie Mae’s and Freddie Mac’s own servicing guidelines and should be amended, according to the Federal Housing Finance Agency. In a comment letter, the Finance Agency cited the similar goals of the FHFA’s single, consistent set of servicing procedures established in 2011 to form the Servicing Alignment Initiative and the bureau’s 2013 Mortgage Servicing Final Rule. …
Of all the compliance problems uncovered during quality-control audits and reviews of mortgage loans, three are recurring with consistency during the origination phase and originators should pay close attention, said a quality-control specialist. Tommy Duncan, chief executive officer of Quality Mortgage Services and a certified mortgage technologist, said errors continue to happen even though lender compliance has improved from previous years. Overall, regulatory compliance on the ...
The complexities of the three percent points-and-fees calculation for the Consumer Financial Protection Bureau “qualified mortgage” standard under its ability-to-repay rule pretty much means that technology is going to be critical in order to be compliant. According to Michael Chan, vice president of ComplianceEase and an expert on compliance technology, the bureau’s QM standard will usher in a whole new paradigm. “Come Jan. 10, 2014, our industry again will be re-defined,” Chan told participants of a webinar ...
The Consumer Financial Protection Bureau’s new criteria for error notices and information requests present considerable challenges to mortgage servicers, according to a new PricewaterhouseCooper analysis. Implementing the changes will require careful review and updates to systems, processes and responsibilities to ensure servicers’ compliance with the new standards, said PwC. The new procedures for error notices and information requests are based on existing rules for responding to qualified written requests ...
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