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Inside Mortgage Finance

January 29, 2009

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2008 Limps to a Close as Mortgage Production Slumps to Eight-Year Low in Fourth Quarter

New mortgage origination activity in the fourth quarter of 2008 shrank to its slowest pace since the beginning of the decade as a severe housing downturn came under increased pressure from a deepening economic recession. Mortgage lenders produced an estimated $250 billion of new home loans during the final three months of last year... [Includes tow charts and two graphs] Read More

With Some Industry Backing, House Panel Approves Mortgage Cramdown Legislation on Partisan Vote

The House Judiciary Committee this week approved legislation that would allow bankruptcy courts to reduce mortgage debt on principal residences in response to growing frustration over the industry’s efforts to address rising foreclosure rates. On a 21-15 party line vote, the panel approved a modified version of H.R. 200, the “Helping Families Save Their Homes in Bankruptcy Act of... Read More

Industry Waits for TARP II Specifications As Obama Administration Weighs Options

The Obama administration is widely expected to divert a significant portion of the next $350 billion in funding for the Troubled Asset Relief Program to mortgage foreclosure relief, but it’s far from clear how the program will be structured – or whether the next phase of the controversial program will pull the financial markets out of disarray. Industry observers saw Monday’s Senate... Read More

Adjusted Loan Limits Among Few Mortgage Provisions in Massive Stimulus Legislation

The massive $825 billion second economic stimulus package being debated on Capitol Hill this week offers little direct support to the beleaguered housing and mortgage industry beyond a restoration of last year’s higher conforming limits. Conspicuously absent is any proposal to create a subsidized, below-market rate mortgage program that advocates say is needed to jumpstart the housing market... Read More

GSE Regulator Eyes Future Portfolio Management As Capital Crisis Accelerates at Fannie, Freddie

With Fannie Mae and Freddie Mac acknowledging this week that they will need new capital infusions to restore their solvency, federal regulators are looking down the road at how their massive investment portfolios should be managed in the future. The Federal Housing Finance Agency this week issued an interim final rule that adopts the terms under which the two government-sponsored... Read More

Freddie, Chase Reach an Understanding

Freddie Mac revealed last week that it has reached a settlement agreement with JPMorgan Chase, under which Chase will become the servicer of mortgages previously serviced by Washington Mutual. “Under the terms of the agreement, JPMorgan Chase will assume Washington Mutual’s recourse obligations to repurchase any of such mortgages that were sold to Freddie Mac with recourse,” the... Read More

MBA Outlines 2009 Lobbying Agenda With Goal Of Winning Back Public Faith in Mortgage Markets

The Mortgage Bankers Association this week outlined a new “Restore the Faith” lobbying initiative for 2009 that ambitiously seeks to restore liquidity to the capital markets, help distressed homeowners and renters and prevent future catastrophes. The MBA said it will work to shape the new economic stimulus package, said Steve O’Connor, the trade group’s senior vice president for government... Read More

SCOTUS Surprises Industry by Agreeing to Review NY AG’s Case on Federal Preemption

The U.S. Supreme Court has agreed to review a decision by a New York federal appeals court to uphold federal preemption of state regulators’ authority to enforce state fair lending laws against national banks. The SCOTUS’ Jan. 16 decision to hear the case, Cuomo v. Clearing House Corp., surprised industry lawyers. Given the same broad preemption principles that the court upheld in 2007 in... Read More

Fed Announces Loan Mod Policy

The Federal Reserve this week announced a loan modification policy that closely tracks the program initiated by the Federal Deposit Insurance Corp. after it became the receiver for IndyMac. The Fed policy applies to loans or MBS that any Federal Reserve Bank may gain control over – but it specifically excludes any mortgage assets provided as collateral for open market operations... Read More

Appraisal Groups Say Use of Alternative Valuations Could Compromise Lenders’ Safety and Soundness

Professional appraisal organizations are strongly objecting to proposed federal guidelines that would allow the use of automated valuation models, broker price opinions, and property tax assessment valuations as substitutes for opinions of certified and licensed appraisers. In comments to proposed interagency appraisal and evaluation guidelines, the American Society of... Read More

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