Many mortgage originators and aggregators say they would use some form of recording, either audio or audio/video, to help with QM compliance and fighting potential lawsuits.
In its successful civil suit against Bank of America, DOJ estimated that the two GSEs lost $850 million from thousands of loans acquired through Countrywide's “Hustle” program.
According to Alice Alvey of Indecomm Mortgage U, “many shops are reassessing originator comp plans for January 2014 to adjust to the changing margins and seize the opportunity to blame it on the change in the law."
The non-agency mortgage market is expected to take the brunt of the changes prompted by the Consumer Financial Protection Bureau’s new ability-to-repay rule and requirements for qualified mortgages. However, two months before the rule takes effect, the rating services haven’t released guidelines for how non-QMs will be rated, prompting issuers to be cautious with plans for non-QMs. Kroll Bond Rating Agency was the only rating service to offer details to Inside MBS & ABS in response to questions about ratings for non-agency MBS once the QM requirements take effect. Glenn Costello, a senior managing director at KBRA, said the securitization of non-QM loans will require additional credit enhancement relative to QMs. DBRS and Standard & Poor’s declined...
The Federal Housing Finance Agency has picked two “final” candidates to be CEO of the joint venture developing a common securitization platform for Fannie Mae, Freddie Mac and, potentially, some non-agency MBS issuers. According to industry officials close to the matter, Peter Carroll is one of the candidates to head Common Securitization Solutions, the name of the entity developing the platform. Carroll is currently the assistant director for mortgage markets at the Consumer Financial Protection Bureau. The identity of the other candidate could not be confirmed...
U.S. Bank, as trustee for a mortgage loan trust, has sued Citigroup in New York state court to force the financial giant to cure or repurchase defective loans from a securitized pool. In a separate case, a federal court in New York dismissed a shareholder action against Citigroup in connection with certain residential MBS. At issue in the first case is a pool of 4,792 mortgage loans that Citigroup Global Markets Realty Corp. purchased and securitized in May 2007. Citigroup sold the loans to Citigroup Mortgage Loan Trust, which, in turn, deposited the loans into the trust and assigned its rights to U.S. Bank. The trust then issued the MBS. According to the court summons and notice, Citigroup conducted...
The risk-retention rule re-proposed by federal regulators in September needs significant adjustments, according to issuers of collateralized loan obligations and asset-backed commercial paper. Investors are largely happy with the re-proposed rule, and issuers concede that the re-proposed rule significantly improved on the rule initially proposed by federal regulators in 2011. The Dodd-Frank Act requires federal regulators to establish risk-retention requirements for certain securities that don’t meet qualifying standards. Issuers of such securities will generally be required to retain at least 5.0 percent of the risk from such issuance. “We remain concerned...
There was no surprise about why. Fannie Mae, Freddie Mac and Ginnie Mae securitized a total of $41.71 billion of refinance loans in October, down 22 percent from the previous month.
Glenn Costello, a senior managing director at KBRA, said the securitization of non-QM loans will require additional credit enhancement relative to QMs.
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