Law enforcement and regulatory officials may be undermining their odds of reaching a foreclosure-practices settlement with the mortgage industry because they’re grasping for too much, too soon, letting the perfect become the enemy of the good, according to some political and legal observers. Attorneys general in all 50 states and the Department of Justice and other federal agencies continue to investigate alleged irregularities in the foreclosure practices of top servicers, including Bank of America, which is...

To promote openness and transparency, the Consumer Financial Protection Bureau has adopted a new policy governing ex parte (one party only) presentations, generally requiring public disclosure of such presentations made to CFPB staff concerning a pending rulemaking. The rule essentially requires anyone who communicates with the CFPB about a pending rulemaking to submit a written copy of the presentation (or a summary of an oral presentation) on the public rulemaking record within three days after the communication to the CFPB. The stated purpose of the rule is to “promote openness and transparency” and to give the public “access to the input that CFPB is receiving.” However, the CFPB’s policy has two significant exceptions that call into question how transparent the CFPB’s rulemaking process will really be, according to Ballard Spahr attorney Christopher Willis.

Senate Banking Committee. Richard Cordray nomination. The Senate Banking, Housing and Urban Affairs Committee has planned a Sept. 6, 2011, hearing to consider the nomination of Richard Cordray to be director of the Consumer Financial Protection Bureau. Political observers will look for signs from Republican members of the committee, particularly Alabama Sen. Richard Shelby, of any potential easing of opposition to the appointment. Thus far, GOP members of the Senate have uniformly remained adamant to the naming of any director to the CFPB until some significant changes are made to its structure, the most notable of which would be the replacement of a single director with a board leadership structure.

The Department of Housing and Urban Development has spelled out the conditions under which borrowers must successfully complete a trial payment plan before they can get a permanent standard loan modification under the FHA’s loss mitigation program. A HUD mortgagee letter (ML 2011-28) also specifies the time requirements for completing loan modification and partial claim documents for a servicer to receive an incentive fee. The FHA reported 13,368 loan modifications and 3,082 partial claims paid in June. A total of 119,703 FHA loan modifications were reported from October 2010 through June 2011, and 21,035 foreclosure claims were paid over the same period. Their workout ratios were ...

A group of House Democrats wants the Obama administration to extend the forbearance period up to a year for unemployed homeowners with mortgages owned by Fannie Mae or Freddie Mac.

A report issued late last week by the Federal Housing Finance Agency Office of Inspector General has concluded that the FHFA did nothing to subvert its role as Fannie Mae and Freddie Mac’s regulator when the agency negotiated the GSEs’ administrative responsibilities under the Treasury Department’s Home Affordable Modification Program.However, the FHFA-OIG noted there was ample room for improvement in the Finance Agency’s oversight of the GSEs’ financial agency agreement (FAA) with Treasury, which resulted in poor communication and differing expectations as to the payment and scope of the HAMP-related work that the GSEs performed.

One of the most important issues for mortgage lenders and homebuyers alike in the whole qualified mortgage/risk-retention/ability-to-repay debate is how much legal liability lenders will have over the mortgages they originate in the Dodd-Frank era. For policymakers, one of the biggest decisions they will have to make to bring certainty to that question is which legal standard to impose, a “rebuttable presumption” or a “safe harbor.” …

Standard & Poor’s and Fitch Ratings have raised concerns about the proposed risk-retention rule that has sparked an outcry among MBS issuers, but the rating services appear to be taking a more measured view – in fact, S&P says it may be good for the market’s long-term health. In a recent report, S&P agreed with the industry consensus that the proposed rule won’t help the housing market and non-agency MBS sector right now. But the new standard for securitization, which sets a high bar for qualified residential mortgages that would be exempt from a ...