The Federal Housing Finance Agency this week announced 2014 conforming loan limits for Fannie Mae and Freddie Mac that are unchanged from those currently in place, but it’s unclear whether the agency still intends to direct the government-sponsored enterprises to set lower limits. The agency cited statutory requirements of the Housing and Economic Recovery Act of 2008 that require changes in the baseline loan limit, $417,000, based on the movement of house prices. Al-though house prices have risen over the past year, the FHFA said, they still haven’t made up all the decline since the housing market tanked in 2007. In the third quarter of 2013, the FHFA house price index was...

After a few weeks of drought in the servicing auction market, a handful of new portfolios are hitting the circuit as sellers try to bolster earnings before year-end. “Buyers haven’t had much new to look at lately, but that’s changing,” said Tom Piercy, managing member of Interactive Mortgage Advisors, Denver. “I think sellers are a little concerned about the new origination forecast for next year from the [Mortgage Bankers Association] and they are thinking they should convert some of their assets to cash.” The MBA last month projected...

The Federal Housing Finance Agency needs to be more hands-on and engaged with additional resources to best oversee Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks, according to the agency’s inspector general. In its semi-annual report to Congress, the FHFA IG noted “recurring oversight issues that policymakers may want to consider as part of reforming the secondary mortgage market.” “The recent housing crisis has shown...

A closer look at the new integrated mortgage-disclosure rule issued last week by the Consumer Financial Protection Bureau reveals a handful of important changes made to the rule itself, while the forms have undergone only modest revisions. The first important change to the final rule is a mandatory three-business-day waiting period between the time the lender provides the closing disclosure and the closing itself. “By providing the closing disclosure three days before closing, consumers can review their final loan terms and costs in an unpressured environment rather than at the closing table,” the bureau said. “This allows consumers time to confirm they are getting what they expected.” It also will give...

Loan modification trends have diverged in recent quarters, with activity in the Home Affordable Modification Program remaining strong while the use of proprietary loan mods dropping significantly. A total of 181,242 loan modifications were completed in the third quarter of 2013, according to Hope Now, a 22.1 percent decline compared with the third quarter of 2012. The decline was driven by proprietary loan mods, with 136,106 completed in the third quarter of 2013, a 26.7 percent reduction from a year ago. Some 45,136 permanent HAMP mods were completed...

Tax forgiveness enacted by Congress in 2007 for mortgage-debt relief is scheduled to expire at the end of this year. In a similar scenario last year, Congress agreed to a one-year extension of the tax break, but analysts are less certain that Congress will pass another extension in the weeks ahead. The Mortgage Forgiveness Debt Relief Act of 2007 exempts borrowers from federal tax obligations for debt forgiven via principal-reduction loan modifications and short sales. Congress has twice extended the deadline for the expiration of the tax break. “Policymakers have expressed...

Two crucial legal events occurred in 2013 that might have signaled the extinction of the narrow window through which deficiency judgments were possible on residential property in California. Attorneys at Nossaman LLP said the recent passage of California Senate Bill 426 and the conforming decision by the California Court of Appeal, Fourth Appellate District, have made clear that the state’s anti-deficiency statutes not only protect home loan borrowers from judgments or collections but also trump any separate lender/borrower agreement regarding the payment of any deficiency following a foreclosure or a short sale. A deficiency judgment is...

Mortgage credit availability, loan quality and lenders’ ability to foreclose on distressed properties remain big issues as lenders try to adjust to a more difficult, more complex regulatory environment, according to industry participants in a symposium hosted last week by the Urban Institute. While private capital is available, potential investors are wary of investing in the new environment of qualified and non-qualified mortgages and on mortgage companies and ventures that have drawn much regulatory scrutiny, panelists said. The average credit scores on a conventional-conforming purchase loan has increased...

JPMorgan Chase announced two separate settlements recently totaling $17.5 billion regarding non-agency mortgage-backed securities issued before the financial crisis. A $13.0 billion settlement was reached with federal and state entities, while a tentative $4.5 billion settlement was reached with non-agency MBS investors. The Department of Justice said the $13.0 billion settlement involving the Residential MBS Working Group established by President Obama was the largest settlement with a single entity ...

Non-agency lenders that plan to originate qualified mortgages suggest that one of their top concerns is meeting the debt-to-income ratio requirements. Only non-agency mortgages will have to have a back-end DTI ratio of 43 percent or below to be classified as qualified mortgages under the Consumer Financial Protection Bureau rule taking effect Jan 10. Average DTI ratios on mortgages in jumbo mortgage-backed securities are well below that limit – 34.0 percent on the latest deal from Redwood Trust ...