In just a matter of days, JPMorgan Chase agreed to two separate settlements totaling $17.5 billion to resolve federal and state civil claims as well as representation and warranty and servicing claims involving residential MBS. On Nov. 19, the Department of Justice, along with other federal and state agencies, announced a $13 billion settlement with JPMorgan, which acknowledged making misrepresentations about billions of dollars in MBS sold to investors prior to Jan. 1, 2009. The settlement is said to be the largest combination of damages and civil fines for a single entity in U.S. history. Most of the damage was inflicted...

The Securities and Exchange Commission is preparing to take more cases to trial in lieu of settling, according to Mary Jo White, chair of the SEC, who prompted a change in the agency’s protocol for settling cases with no admission or denial of guilt. “In this age of diminishing trials, we at the SEC may be about to reverse the trend a bit,” White said in a speech late last week. Shortly after White took over as chair of the SEC, she said...

Members of the Federal Open Market Committee kicked around various approaches to winding down the central bank’s third installment of quantitative easing during their policy meeting last month, but ultimately didn’t budge the ship off its bearings. Recently released minutes of the Oct. 29-30 FMOC policy meeting revealed that participants “generally expected that the data would prove consistent with the committee’s outlook for ongoing improvement in labor-market conditions and would thus warrant trimming the pace of purchases in coming months.” However, committee members also considered...

Mortgage lenders will have until Aug. 1, 2015, to implement the new integrated mortgage-disclosure forms and related rule issued by the Consumer Financial Protection Bureau this week. The new forms will replace the existing federal disclosures under the Real Estate Settlement Procedures Act and the Truth in Lending Act. Bureau officials hope they will help consumers better understand their options, choose the deal that’s best for them, and avoid costly surprises at closing. The new, three-page loan estimate form will be provided...

Private-equity firms such as Pershing Square Capital Management and Fairholme Funds are gobbling up the common and preferred shares of Fannie Mae and Freddie Mac, a trend that may continue as long as the two stay profitable and Congress dithers with how to end their conservatorships. “There’s some value there,” said Brian Harris, a senior analyst with Moody’s Investors Service. “The hedge funds believe the two will continue to earn money.” Industry observers who closely follow the government-sponsored enterprises predict...

Increasing Fannie Mae and Freddie Mac guaranty fees, as well as “incrementally” reducing the government-sponsored enterprises’ loan limits throughout the next decade, would save the government approximately $20 billion, according to the Congressional Budget Office. In a report published last week, the CBO projected the budgetary savings that would occur under two proposals. “By CBO’s projections under current law, the mortgage guaranties that the GSEs issue from 2015 through 2023 will cost the federal government $22 billion,” noted the report. “That estimate reflects the subsidies inherent in the guaranties at the time they are made.” Under one scenario, the average GSE guaranty fee would increase...

The CFPB’s much-anticipated integrated mortgage disclosure final rule and related forms could be issued as early as Wednesday, Nov. 20, when the bureau plans to conduct a public field hearing in Boston on the mortgage aspect of its broader “know before you owe” initiative. The event will feature remarks by CFPB Director Richard Cordray and testimony from consumer groups, industry representatives and members of the public. The purpose of the forthcoming rule and forms is to integrate and harmonize the mortgage disclosures consumers receive...

Although non-agency MBS issuance has been a dicey proposition since rates spiked in late spring, residential lenders continue to eye the sector, liking the long-term outlook for jumbo securities. Two nonbanks taking a close look at the jumbo MBS market include Freedom Mortgage and W.J. Bradley Mortgage Capital, both established names in the agency MBS arena. In an interview with Inside MBS & ABS, Freedom Mortgage CEO and founder Stanley Middleman said...

Federal Reserve Vice Chair Janet Yellen, President Obama’s nominee to replace Fed Chairman Ben Bernanke, did not deviate in the slightest from Bernanke’s support for a policy that has resulted in the Fed buying two thirds of new agency MBS production, during her nomination hearing before the Senate Banking, Housing and Urban Affairs Committee this week. “The Federal Reserve is using its monetary policy tools to promote a more robust recovery,” Yellen said. “A strong recovery will ultimately enable the Fed to reduce its monetary accommodation and reliance on unconventional policy tools such as asset purchases. I believe that supporting the recovery today is the surest path to returning to a more normal approach to monetary policy.” Sen. Mike Crapo, R-ID, ranking member of the committee, took issue...

A report released this week by analysts at the Federal Reserve Bank of Richmond suggests that real estate investment trusts that invest in agency MBS don’t necessarily pose systemic risks. “While mortgage REITs clearly present risks to investors, it is not yet clear where mortgage REITs fall relative to other financial institutions in terms of their systemic risk,” according to an economic brief from the Richmond Fed. REITs held...