Industry observers doubt the White House’s commitment to replace the current interim head of the Federal Housing Finance Agency, despite louder recent lip service, following an embarrassing, if not unexpected, rejection last week by the Senate of the Congressman who would be the new FHFA director. On Oct. 31, Senators voted 56 to 42 to limit floor debate on the nomination of Rep. Mel Watt, D-NC. The final tally was well below the 60-member supermajority required to invoke cloture and shutter any potential filibuster under current Senate rules.
The Federal Housing Finance Agency spent the last two weeks racking up several legal settlements in its massive litigation action against some of the nation’s financial institutions. Look for more to come predict industry analysts. On Oct. 25, JPMorgan Chase agreed to pay $4.0 billon to settle claims on $33.8 billion of non-agency mortgage-backed securities purchased by Fannie Mae and Freddie Mac.
Depending on how the Senate’s housing finance reform legislation comes out in the end, the Federal Home Loan Banks could play an even larger role in helping smaller lenders successfully access the secondary market, Richard Swanson, president and CEO of the Des Moines Bank, said this week. Testifying before the Senate Banking, Housing and Urban Affairs Committee, Swanson said that the secondary mortgage market, as envisioned by S. 1217 by Sens. Bob Corker, R-TN, and Mark Warner, D-VA, would allow the 12 FHLBanks to serve in an expanded role as mortgage aggregators.
Freddie Mac’s “account balance” with the U.S. Treasury will go into the black by yearend – thanks to stellar third-quarter earnings – and Fannie Mae likely will accomplish the same by the end of March 2014. But mortgage bankers shouldn’t pop any champagne. That’s the view of Dave Stevens, president of the Mortgage Bankers Association who worked at Freddie once and also served as FHA commissioner. Stevens believes that despite their strong performance in the third quarter and beyond, both are just “insurance brokers” that have benefitted from the Federal Reserve buying their mortgage-backed securities. [Includes one data chart.]
More players are entering the mortgage servicing market even with all the challenges besetting the sector, from the new national servicing standards to Basel III capital requirements, according to industry experts. With megabanks shrinking their mortgage businesses and servicing portfolios, small to medium-sized firms are stepping in to fill the gap, panelists observed during the recent Mortgage Bankers Association annual convention. Purchasers of mortgage servicing rights are mostly nonbanks with no ...
A number of lenders report that they will record their interactions with borrowers – even face-to-face meetings – in an effort to avoid liability under qualified mortgage requirements, according to Standard & Poor’s. Lenders suggest that they are largely in compliance with the Consumer Financial Protection Bureau’s ability-to-repay rule, which establishes QM requirements on Jan. 10, but documentation is key. Borrowers that go into default can seek to prove that lenders didn’t meet the ATR requirements, even if ...
How many loans per month should a loan officer be closing when times are lean? According to Dave Lykken of Mortgage Banking Solutions, if an LO isn’t closing at least six loans per month, they might want to consider employment elsewhere.
SunTrust Mortgage – like many large banks before it – is pulling the ripcord on the wholesale-broker channel, though it will remain as a correspondent buyer of closed mortgages. The company ranked 12th in wholesale-broker lending during the first half of 2013, according to Inside Mortgage Finance. A company spokesman confirmed the bank’s exit from the sector, but declined to provide any explanation. “Clients with applications currently pending in this channel are not affected by this announcement,” he said. “We will continue to work to close their loans.” Brokers were...
A little-known case about disparate impact in housing and lending discrimination now before the U.S. District Court for the District of Columbia will likely be the stage for the next legal debate on the question whether disparate-impact claims are permissible under the Fair Housing Act. It could also decide whether the Consumer Financial Protection Bureau can apply disparate impact in its examinations and investigations. With the Mount Holly, NJ, town council reportedly poised to vote on a proposed settlement, the U.S. Supreme Court, for the second time in two years, would be deprived of the opportunity to decide the fate of disparate impact. Reports indicate the town council may have a decision by Nov. 7 and a settlement could end the case, Mount Holly v. Mount Holly Garden Citizens in Action, Inc., before scheduled oral arguments on Dec. 4. The Supreme Court was poised...
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