The legal settlement between Goldman Sachs and the Federal Housing Finance Agency over soured non-agency MBS sold to Fannie Mae and Freddie Mac featured an unusual buyback of the securities by the investment bank. It leaves just three big defendants left to settle or go to trial, legal observers note. Under the terms of the settlement announced Aug. 22, Goldman is required to pay $3.15 billion to repurchase securities that were the subject of the claims in the FHFA’s lawsuit. The economic value of the settlement is estimated...
Commercial banks held $1.386 trillion of residential MBS at the end of June, marking their second consecutive quarterly gain in MBS investment, according to a new Inside MBS & ABS analysis. The 0.7 percent increase in bank MBS holdings was enough to offset a 3.5 percent drop in thrift investment in the sector. On a combined basis, banks and thrifts saw an 0.3 percent increase in residential MBS during the second quarter, though the industry remained 0.2 percent below the level set at the midway point in 2013. All of the increase came...[Includes two data charts]
The rating services are set for increased oversight after the Securities and Exchange Commission approved a final rule addressing internal controls, conflicts of interest and procedures in an attempt to protect the integrity of rating methods. The SEC approved the final rule on a 3-2 vote last week, with the two Republican commissioners voicing strong opposition to provisions required by the Dodd-Frank Act. Among other issues, the final rule aims at preventing sales and marketing considerations from influencing the issuance of credit ratings on structured finance products. Under the rule, rating services are prohibited from issuing or maintaining a credit rating when a person within the rating service that participates in determining or monitoring the rating also participates in sales or marketing of a product or service of the rating service or an affiliate. The rule also targets...
“The CFPB’s plan will feature only one side of the story, and such one-sided accounts will not advance the CFPB’s mission of better informing and helping consumers,” said FSR chief Tim Pawlenty.
The FHA will no longer allow lenders to charge interest payments previously owed beyond the date the FHA mortgage was paid in full – a policy change that could help borrowers save some money. Currently, lenders can charge interest on FHA loans through the end of the month when they are paid off. The new rule is effective for loans paid off on or after Jan. 21, 2015. The policy change responds...
The Federal Housing Finance Agency last week proposed increasing some of the benchmark levels for Fannie Mae’s and Freddie Mac’s affordable housing goals through 2017, while also establishing new housing subgoals for low-income multifamily properties. The proposed rule – which requests public comment – presents three alternatives for determining whether a government-sponsored enterprise has met the congressionally mandated single-family housing goals for 2015-2017. The first option would keep...
The Consumer Financial Protection Bureau provided fresh guidance on mortgage servicing transfers last month, but lenders say there are still plenty of unresolved issues. In August, the CFPB put out an updated compliance bulletin on mortgage servicing transfers that augments existing guidance from last year to reflect the agency’s complex mortgage servicing regulation, as well as its supervisory and enforcement activities during the last year and a half. Bob Davis, head of mortgage markets, financial management and public policy at the American Bankers Association, said...
Mortgage lenders are worried that a recent proposal by the Consumer Financial Protection Bureau to expand its consumer complaint database with “narratives” from borrowers will leave companies vulnerable to being smeared by unproven rumors and false accusations. They also fear that a few legitimate complaints will be blown out of proportion. Others are apprehensive about maintaining the privacy of consumer personal data – and about expanding their legal liability. The Financial Services Roundtable has initiated...
Banks’ mortgage banking efforts through two quarters in 2014 pale in comparison to the first half of last year, though income and other metrics improved in the second quarter, according to an analysis of call report data by Inside Mortgage Trends, an affiliated newsletter. Banks had a total of $4.91 billion in mortgage banking income in the second quarter, up 45.5 percent from the first three months of the year. However, mortgage banking income was well below levels seen in the first half of 2013, before the most recent refinance boom ground to a halt. Banks had...
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