More Needed to Reduce REO Inventory. The National Association of Realtors has called upon HUD, the FHFA and Treasury to create an advisory board to help them explore possible options for unloading real estate owned (REO) properties held by Fannie Mae, Freddie Mac and the FHA. “We believe the government has an opportunity to minimize the impact of distressed properties on local markets by expanding financing opportunities, bolstering loan modifications and short sales efforts, and enhancing the efficient disposition of REO properties,” said NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, RI. “This will help stabilize home prices and neighborhoods and help support the broader economic recovery.” The Realtors also recommended the agencies be more aggressive in having loans modified and, when a family is absolutely unable keep their home, to quickly approve reasonable short sale offers that allow families to avoid foreclosure.

Bank of America, in an effort to cut its losses from its 2008 acquisition of Countrywide Financial Corp., is looking to unload its correspondent mortgage business, and is said to be in talks with Nationstar Mortgage Holdings Inc., a unit of private-equity firm Fortress Investment Group. BofA has taken a deep look at its operations in the context of today's marketplace and decided to make some major strategic adjustments, including dumping the correspondent business…

The Securities and Exchange Commission this week approved a proposed conflict-of-interest rule that attempts to walk a tightrope between preventing abusive securitization practices and not interfering with legitimate competitive activity in the market. The agency got a lot of feedback on how to implement the Dodd-Frank Act conflict-of-interest provisions, including from the chief sponsors of the provisions in Congress. Senate Democrats Jeffrey Merkley (OR) and Carl Levin (MI) were largely inspired by dealings in which Goldman Sachs allegedly allowed a hedge fund to choose assets for a collateralized debt obligation and then...

Recent proposals by the Securities and Exchange Commission could eliminate or impose more regulatory burden on mortgage real estate investment trusts and complicate securitizations, experts warned. The SEC earlier this month launched a preliminary effort to reconsider the exemption that REITs currently have from the Investment Company Act. Although the agency did not propose any specific changes, the REIT industry and its supporters see the initiative as a potential game-changer for how they do business. The SEC concept release, at first blush, appears to “signal impending regulatory burdens for mortgage REITs and to...

Guarantee fees up, loan limits down. Reform of the government-sponsored enterprises is set to begin with subtle adjustments to Fannie Mae and Freddie Mac pricing, not with sweeping legislation from Congress. Federal Housing Finance Agency Acting Director Edward DeMarco noted that the guaranty fees charged by the GSEs have already started to increase, and further gradual increases will be implemented next year. ...

“Sept. 2 was the most significant day for mortgage crisis litigation since the onset of the crisis in 2007,” Isaac Gradman, managing member of IMG Enterprises, said in reference to the non-agency mortgage-backed securities lawsuits filed by the Federal Housing Finance Agency. He predicted that the involvement of the U.S. government in mortgage litigation will encourage more private litigants to file lawsuits seeking securities law claims and buybacks. Gradman, whose MBS consulting firm specializes in analyzing contractual rights, potential liabilities and MBS regulation, said the FHFA lawsuits could provide plaintiffs with a roadmap to recoveries. ...

“Unwarranted and false public allegations” have prompted Michael Perry, the former chairman and CEO of IndyMac, to mount a defense via a new website. His “Not Too Big to Fail” site offers “the facts about Mike Perry and IndyMac.” On the site, Perry takes aim at lawsuits against him by the Securities and Exchange Commission and Federal Deposit Insurance Corp. as well as private litigation and audits by the Office of the Inspector General of the Department of Treasury. ...

The FHA is urging Congress to restore the authority of community banks to close FHA loans in their own names without having to maintain an FHA lender approval to do so. While it took a regulation by the Department of Housing and Urban Development to take away small banks’ FHA correspondent status, federal law requires lenders to have FHA approval before they can close an FHA-insured loan. Only Congress can make the changes necessary for non-direct endorsement lenders to return to the business of originating and closing FHA loans in their name, according to a former HUD official. Assistant Secretary for Housing and...

FHA lenders that fail to report mortgage record changes for mortgage sales, transfers and termination of mortgage insurance will be referred to the Mortgage Review Board for disciplinary action, including civil fines, the agency warned. In Mortgagee Letter 2011-33, the FHA reminded lenders of their responsibility to reconcile their portfolios and ensure all accounts are properly identified. When the FHA’s records do not match lenders’ records, the latter are required to take corrective action. The Department of Housing and Urban Development will not pay any claims if the name and identification number of the holder or the...

The Department of Housing and Urban Development is seeking public comment on a plan to eliminate an outdated appeals process, which HUD used to collect data to set FHA mortgage loan limits. Since the early 1980s, HUD has allowed interested parties to submit appeals for a higher FHA loan limit in any area of the country at any time in lieu of the limits set by the department for FHA loans. The process, however, is no longer in use – a victim of advances in data-collection technology. Previous guidance issued by HUD outlined the appeal process and later added requirements for data used in non-disclosure states as well as...