The securitization industry is largely supportive of fails-charge recommendations by the Treasury Markets Practice Group to help reduce fails in the agency debt securities and agency MBS markets, but did offer a number of “constructive considerations” for the group to review. The Securities Industry and Financial Markets Association told the TMPG, an advisory group of market representatives sponsored by the Federal Reserve Bank of New York, that its members share concerns about elevated levels of settlement fails in MBS markets, which the TMPG is trying to address in the recommendations it released in late April. “SIFMA members agree that...

The government’s top securities industry regulator rejected some of the pushback against the huge volume of new regulations for the MBS and ABS market, while reporting that officials are working to address some major concerns as they finalize the rules. “Efforts to implement the reforms that would bring investors back to the markets are being met with strong and what I believe to be short-sighted resistance,” said Mary Schapiro, chairman of the Securities and Exchange Commission, during a speech at this week’s American Securitization Forum annual meeting. “In the aftermath of the crisis, would-be investors are waiting for needed reforms in...

Mortgage servicers are being squeezed by inadequate compensation, intense scrutiny and a surge of new regulation, but Fannie Mae and the Treasury Department say they are trying to even the score. Servicers no longer see their job as financially rewarding and have been leaving their positions accordingly, claimed Diane Pendley, managing director of Fitch Ratings, during a panel session at this week’s annual meeting of the American Securitization Forum. “We’re seeing them fighting – they’re coming out swinging, just really to get some balance,” echoed Gwen Muse-Evans, vice president and chief risk officer at Fannie Mae. “There’s definitely a perception that...

The Federal Housing Finance Agency is working on the double to come up with written policies and procedures for its consumer complaints process, as well as a thorough assessment of the staff and resources needed to implement the new functions by the end of the year following a very public rebuke by the Finance Agency’s watchdog.In a report released this week, the Office of the Inspector General of the FHFA said its audit of Freddie Mac and Fannie Mae’s regulator found the Finance Agency’s oversight of the receipt, processing and disposition of consumer complaints to be a “significant deficiency” in its internal controls.

While overall governance of the 12 Federal Home Loan Banks passed muster in 2010, the Federal Housing Finance Agency’s annual examination identified a number of “shortcomings” that should be addressed during the coming year.“In 2010, FHFA has a concern about the level of experience and expertise of certain executives and executive turnover at some FHLBanks,” said the FHFA’s annual report to Congress. “While board and management oversight generally improved during 2010 at most FHLBanks, there remains room for improvement at some FHLBanks.”

Non-agency mortgage-backed securities continue to affect the financial performance of several Federal Home Loan Banks, according to the Federal Housing Finance Agency’s annual report to Congress.In aggregate, the FHLBanks hold 1,622 non-agency MBS with a par value of $46.9 billion. Although all of the non-agency MBS had triple-A ratings when purchased, the portfolios are generally of poor quality credit, said the FHFA.

Fannie Mae and Freddie Mac shareholders would fall to the very back of the line of creditors under the terms of a new rule submitted to the Federal Register by the Federal Housing Finance Agency.The FHFA’s final rule follows up on its proposed rule released last year to codify the Finance Agency’s terms of conservatorship and receivership operations for Fannie, Freddie and the Federal Home Loan Banks.

The “very conservative terms” of the “qualified residential mortgage” definition proposed by federal regulators, taken together with the risk-retention requirements, the premium capture rule and other provisions, will provide a “significant and undue competitive advantage” to the GSEs over private-market mortgage-backed securities participants, according to the American Securitization Forum.In comments submitted to regulators on the proposed rule earlier this month, the ASF said that securities guaranteed by the GSEs will be able to be securitized free from the risk-retention requirements. This would result in the non-QRM loans that back such securities having lower costs to borrowers and more attractive terms than similar loans offered by private-market participants.

The controversial Consumer Financial Protection Bureau plans to hit the ground running when it officially opens its doors for business July 21, whether or not the agency has a director in place. Steve Antonakes, assistant director for large bank supervision at the CFPB, told industry executives last week that the agency is ready to begin conducting “point-in-time” examinations of banks with more than $10 billion in assets, exams that will last anywhere from four to 12 weeks, based on the size and complexity of the institution. A clean exam means...

A broad coalition of industry trade groups, consumer advocates and community groups urged federal regulators to open the door to qualified residential mortgage status for loans with low downpayments, but offered only the mildest support for private mortgage insurance. The Coalition for Sensible Housing Policy reiterated criticism of the QRM standard drafted by federal regulators as part of the securitization risk-retention proposed rule earlier this year that has been made...