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 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...
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 challenges confronting the recovery of the non-agency MBS market are many, but legacy issues, such as representations and warranties, are the cause of huge frustration in the industry, according to panelists at the American Securitization Forum this week. “Some of these legacy issues have very far-reaching tentacles,” observed Mani Sabapathi, principal at Prudential Fixed Income. The housing finance world has been bracing for the coming risk-retention rule with great apprehension, he said, raising the possibility that reps and warrants could be included as a part of it. “I think it can be an important aspect to the extent that if you have these loans that don’t meet...
Lawmakers on the House Financial Services Committee this week approved by a wide bipartisan margin a bill that would create the legislative framework for a covered bond market in the U.S., but not before some haggling regarding the role of the federal regulators. The committee voted 44-7 in favor of H.R. 940, the U.S. Covered Bond Act of 2011, clearing the way for the bill’s consideration by the full House of Representatives. Rep. Scott Garrett, R-NJ, chairman of the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, said H.R. 940 sets up “legal certainty” that is a core element of...
The Federal Housing Finance Agency’s failure to recognize and quickly provide law enforcement authorities with information about allegations of fraud and other potential criminal conduct presents a “significant risk” for the agency and the government-sponsored enterprises it regulates, concluded the FHFA’s watchdog. The Office of the Inspector General of the FHFA this week issued...
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...
In an apparent victory for the mortgage industry, the Senate has set aside amendments to an economic development bill that would have established national standards for mortgage servicers and changed the way the FHA collects interest payments on prepaid FHA-insured mortgage loans. The Mortgage Bankers Association and the American Bankers Association warned legislators that adoption of the amendments would be...
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...
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