GSEs, Private MIs Agree to Drop Pre-Approval Requirements. Fannie Mae and Freddie Mac and the private mortgage insurance industry have agreed to eliminate pre-approval requirements for foreclosure alternatives, such as short sales and deeds-in-lieu of foreclosure. The separate agreements with MIs should help distressed homeowners avoid foreclosure by doing away with costly, time-consuming MI reviews that delay foreclosure-prevention transactions, according to the government-sponsored enterprises. WIMC Fully Acquires Reverse Mortgage Solutions. Walter Investment Management Corp. has completed its $120 million acquisition of ...

Fannie Mae and Freddie Mac this week reported a combined $4.74 billion in net income during the third quarter, as the two government-sponsored enterprises avoided taking further draws from the Treasury Department by staying in positive earnings territory. The GSEs’ combined third-quarter income was down 41.7 percent from the previous three-month period, mostly because Fannie’s net income fell 64.6 percent from second-quarter earnings that were pumped up by a $3.04 billion recorded benefit on credit losses. Fannie’s $1.81 billion in third-quarter net income was much more in line with the $2.72 billion it earned in the first three months of the year, as well as Freddie’s recent performance. Freddie reported...

Mortgage market watchers should expect “business as usual” from a second Obama administration as the White House and Congressional Democrats are poised to preserve gains under the Dodd-Frank Act, including the Consumer Financial Protection Bureau. Both parties say they want to resolve the conservatorships of the government-sponsored enterprises, but experts say the necessity of addressing budget and tax issues will trump all other considerations next year. “Clearly a second term for the Obama administration would be business as usual as best they can,” explained Timothy McTaggart, partner at the Pepper Hamilton law firm during a pre-election webinar. “I don’t think Dodd-Frank will remain sacrosanct for all time. I think during a second term the [regulatory] agencies will get past the point of having to put the rules out, they will get some feedback and they will start making it known where they see gaps or deficiencies.” Karen Shaw Petrou, managing partner of Federal Financial Analytics, said...

The Consumer Financial Protection Bureau has found “significant non-compliance” during its examinations of mortgage lenders, compelling them to take a variety of steps deemed necessary to be brought into compliance, according to the CFPB’s first report on its examination findings. Violations under the Real Estate Settlement Procedures Act included failures to make proper and complete disclosures to consumers of costs and other terms because of errors in the good faith estimate and HUD-1 settlement statement, the CFPB stated. Truth in Lending Act violations included...

Basel III capital requirements proposed by federal regulators will have a significant negative impact on U.S. bank holdings of agency and non-agency MBS, according to industry participants. The capital requirements have yet to be finalized and are currently scheduled to begin being phased in Jan. 1 with full implementation in 2018. In June, the Federal Deposit Insurance Corp., the Federal Reserve and the Office of the Comptroller of the Currency proposed rules to implement Basel III capital standards – the most comprehensive overhaul of the U.S. bank capital framework since Basel I was implemented in 1989. Comments were due last week, and strong warnings were submitted by trade groups representing MBS market participants, banks and mortgage lenders. “If the Basel III [proposed rule] were implemented...

Look for quality control at both Fannie Mae and Freddie Mac to be a “critical” component of the recently unveiled GSE representation and warranty framework as the first, best method to curb prospective putbacks, a Federal Housing Finance Agency official advises. Maria Fernandez, the FHFA’s associate director of housing and regulatory policy, told attendees of an Inside Mortgage Finance webinar last week that the Finance Agency has heeded the pleas from the industry that QC needed to be done sooner to allow for a clearer understanding of the process.

The Federal Housing Finance Agency and the Consumer Financial Protection Bureau announced this week they will partner to create a national mortgage database to provide detailed information about mortgage loans. “The database will primarily be used to support the agencies’ policymaking and research efforts and to help regulators better understand emerging mortgage and housing market trends,” said the FHFA and CFPB.

Independent mortgage companies could lose access to warehouse funding or at least face significantly higher costs if Basel III capital requirements are implemented as proposed, according to the Mortgage Bankers Association. The capital requirements proposed by federal regulators would change the definition of “financial collateral” included in proposed standardized approach rules by excluding conforming residential mortgages. “This change would significantly reduce the amount of funding available to non-depository mortgage bankers since the warehouse lines ...

Valuations of mortgage servicing rights could take a severe beating if scores of banks dump MSRs to avoid costly new capital requirements under rules to implement controversial international guidelines that have been proposed by U.S. banking regulators. Proposals to implement the Basel III capital rules for U.S. banks would be a game-changer for the mortgage industry, said David Motley, president of Colonial National Mortgage, during a panel session at the Mortgage Bankers Association annual convention last week. As proposed, the Basel III rules “would restrict our ability to grow and may cause us to shrink,” he said. The complex set of Basel III proposals would affect...

Officials at National Mortgage Insurance say a state-of-the-art business platform and a somewhat old-school approach to writing private MI will help the company establish a beachhead in an industry that’s seen three long-time players washed out to sea by the housing market collapse. National MI hopes to have its Fannie Mae and Freddie Mac approvals within the next few months, and it’s made significant headway in lining up state approvals, officials say. In June, the new private MI was approved for an accelerated licensing process that allows it to seek multiple state licenses on a streamlined basis. The private MI industry has seen...