Despite the renewed focus on the FHA in the wake of the recent actuarial report, analysts do not expect any meaningful action in 2013 given the important role that FHA plays in supporting the housing market. But that does not mean that the Department of Housing and Urban Development will be sitting idly by next year. It has a lot of additional measures to implement to protect and preserve the FHA Mutual Mortgage Insurance Fund, HUD Secretary Shaun Donovan told Senate lawmakers recently during a hearing on the condition of the fund. The changes are both ...
The federal judge in charge of overseeing the multiple lawsuits filed by the Federal Housing Finance Agency against non-agency mortgage-backed securities issuers for allegedly misrepresenting deals that were sold to Fannie Mae and Freddie Mac rebuffed yet another motion by the banks to curtail the suits. Last week, Judge Denise Cote of the U.S. District Court for the Southern District of Manhattan rejected a motion to exclude an expert report describing the Finance Agency’s proposed…
Mortgage lenders saw a welcome decline in the volume of repurchases and indemnifications they had to make during the third quarter, but a new analysis of two major databases by Inside Mortgage Trends reveals that the industry made little progress in resolving the massive overhang of disputes involving loans from the depth of the housing crisis. According to bank call reports, repurchases and indemnifications declined by 21.6 percent from the second to the third quarter ... [Includes 3 data charts]
As anxious as mortgage lenders are about the apparent delay in the CFPB’s issuance of an ability-to-repay/qualified-mortgage final rule, industry attorneys, trade group experts and consumer advocates unanimously believe that bureau is taking so much time so it can put out the best, most balanced rule as possible. Carrie Hunt, general counsel and vice president of regulatory affairs for the National Association of Federal Credit Unions, said she isn’t as concerned about when the rule comes as she is about the quality of it...
In a concession to concerns expressed by industry representatives, the CFPB recently announced it plans to issue a proposal sometime this month to make certain limited changes to its rule on international money transfers, as well as to extend the rule’s effective date until 90 days after the proposal is finalized.“Some regulated entities identified issues that pose practical challenges in implementing the new law,” the bureau said in announcing its intention to propose a narrow set of changes to the remittance rule. “The proposed changes would improve implementation of the new law while keeping the important new protections for consumers intended by the Dodd‐Frank Act,” the CFPB said.
A federal appeals court has agreed to hear Credit Suisse’s appeal of a lower court ruling which gave the go-ahead for a group of investors in an IndyMac Bank MBS to proceed as a class in its suit against the lender. The U.S. Court of Appeals for the Second Circuit said last week it would hear Credit Suisse’s appeal of a Manhattan federal judge’s ruling in June which granted a December 2010 request for class certification to investors as they allege Credit Suisse misled them about the quality of toxic loans underlying a $642 million MBS offering in 2006. The plaintiffs claim...
A federal court in California recently dismissed claims by the Federal Deposit Insurance Corp. related to non-agency mortgage-backed securities purchased by a bank in 2007 and 2008. According to the ruling, the FDIC should have filed the lawsuit long ago and tolling did not render the claims as timely. FDIC v Countrywide Financial relates to $62.6 million in AAA-rated Countrywide MBS purchased by Strategic Capital Bank in 2007 and 2008. The FDIC was appointed as receiver of the bank on May 22, 2009 ...
Wells Fargo announced that the Securities and Exchange Commission recently completed an investigation of the company’s disclosures from mortgage-backed security offering documents and no enforcement action will be taken. Arcus Lending, a mortgage broker and a direct lender in California, recently started offering an 80/10/10 mortgage in an effort to allow borrowers to avoid private mortgage insurance. “There is a huge need for such a program and very few lenders ... [Includes two briefs]
Expressing concern about a potential FHA bailout, Sen. Tim Johnson, D-SD, chairman of the Senate Committee on Banking, Housing and Urban Affairs, said that he is prepared to work with Republicans on a bipartisan solution to keep the FHA solvent should government measures fail. This week, Johnson called a hearing to know more about the administrative and legislative action plan the Department of Housing and Urban Development has put together to restore the financial health of the FHA’s Mutual Mortgage Insurance Fund. A recent independent actuarial audit revealed that ...
The mortgage banking industry is urging Congress to reject the FHA’s call to eliminate the existing “knew or should have known” standard in the National Housing Act in connection with an agency proposal to extend indemnification authority to all direct-endorsement lenders. Both proposals are part of legislative and administrative measures sought by the FHA to strengthen its capability to manage risk and protect its Mutual Mortgage Insurance Fund. A recent independent actuarial review of the fund found that in FY 2012 the economic value of the FHA’s single-family portfolio had dropped to negative $13.5 billion (excluding Home Equity Conversion Mortgage loans) and that ...
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