The Department of Veterans Affairs is seeking volunteers to test its redesigned servicing platform, the first phase of the agency’s ambitious plan to convert the platform into a fully automated end-to-end, integrated mortgage origination and servicing system. The VA has reached out to servicers connected to its VA Loan Electronic Reporting Interface (VALERI) to participate in the testing and transition process. The plan is to convert VALERI, which allows servicers to upload servicing data, ultimately into a complete automated underwriting and loan origination system. The system conversion effort aims to integrate all business lines, including loan origination, property valuations and mortgage servicing to improve performance of the VA loan program to increase usage by veterans and provide better customer service. It also aims to bring more transparency to the VA loan process and holding underwriters, originators and ...

California continued to lead all states in FHA and VA mortgage securitization in the first three months of 2018. The Golden State accounted for 15.3 percent of the $50.6 billion of FHA loans delivered into Ginnie Mae mortgage-backed securities in the first quarter. FHA loans comprised 18.2 percent of loans securitized by Fannie Mae, Freddie Mac and Ginnie Mae, and 34.6 percent of agency-securitized loans with primary mortgage insurance. About 66.6 percent of FHA loans securitized during the period were for purchase mortgages while refinance loans accounted for 27.5 percent. The average loan-to-value ratio of FHA loans in Ginnie pools was 93.0 percent. The average credit score of 668.2 reflected FHA’s traditional base of lower-income and first-time homebuyers, with an average debt-to-income ratio of 42.4 percent. The other states among the top five in terms of FHA deliveries into Ginnie pools were ... [Chart]

New York has enacted legislation redefining a reverse mortgage as a “home loan.” With the new law, statutory 90-day pre-foreclosure notices and certificates of merit would be required for all reverse-mortgage foreclosures in the Empire State. New York’s foreclosure settlement conference law has incorporated the new definition by reference, removing any doubt that such meetings are required in most reverse-mortgage cases, said industry attorneys. Gov. Andrew Cuomo, D, signed the amendment into law on April 12, 2018, though it is deemed to have been in full force and effect as of April 20, 2017. However, the pre-foreclosure notice requirement for reverse mortgages has an effective date of May 12, 2018. For actions commenced after May 12, the new state law requires lenders, servicers or assignees to provide a pre-foreclosure notice at least 90 days before initiating legal action against the borrower at the ...

A Washington state appeals court recently upheld a lower court decision to dismiss non-agency MBS claims filed by the Federal Home Loan Bank of Seattle against RBS Securities, Inc.

GSE shareholder litigation activity continues into mid-year with two new cases being filed in the past week. Joshua Angel, a corporate restructuring lawyer and owner of junior preferred stock, filed a lawsuit this week to sue Fannie Mae, Freddie Mac and their respective board of director members who were serving on Aug. 17, 2012, when the Treasury sweep was formalized. Angel seeks to recover damages from the defendants for his pro-rated share of the $10 billion dividend entitlement loss he and other junior preferred shareholders have incurred to date.

Democratic state attorneys general urged the CFPB not to back away from its investigative powers but promised to fill the gap if the federal agency does so. A group of 16 Democratic state AGs led by California’s Xavier Becerra recently sent a letter in response to the CFPB’s request for information on civil investigative demands. In the letter, they opposed any efforts to curtail the CFPB’s civil investigative demand authority. “As our state’s chief law enforcement officers ...

The CFPB made significant changes to its rulemaking agenda in 2018, signaling a weakening role for the bureau in the financial services market. The agency released its spring 2018 rulemaking agenda last week. Noting that it’s under interim leadership pending the appointment and confirmation of a permanent director, the bureau said it is prioritizing meeting specific statutory responsibilities, continuing “selected rulemakings that were already underway,” and reconsidering ...

Investors arguing that the net worth sweep was unjust hit a roadblock late last week when the Seventh Circuit Court ruled that they can’t claim GSE profits post-conservatorship.This latest ruling also led the Federal Housing Finance Agency to try to influence the outcome in similar cases against the agency. The shareholders sought to overturn a 2017 ruling in which a federal judge went against them and granted the government’s motion to dismiss the complaint.In this case, Christopher Roberts, et al., vs. the Federal Housing Finance Agency et al., similar to other shareholder complaints, investors argued that the...

Non-agency MBS traders defeated charges brought by the federal government in two separate cases late last week. In one case, a judge ruled that a lower court erred by admitting evidence against the trader; in the other, a jury determined that bluffing by a trader didn’t warrant a conviction.

The Seventh Circuit Court shot down the chances of Fannie Mae and Freddie Mac shareholders reviving their Treasury sweep claims last week. Investors Christopher Roberts and Thomas Fischer argued that the preferred stock purchase agreement was illegal and robbed shareholders of their profits.