Our estimate of legal and rep and warrant reserves for the largest banks is a total of roughly $60 billion, S&P writes in a new report. We estimate that the largest banks may need to pay out an additional $55 billion to $105 billion to settle mortgage-related issues, some of which is already accounted for in these reserves.
Ed DeMarco might possibly name a chairman for the CSP platform and let Mel Watt have the final say on the CEO slot. Two mortgage executives interviewed for the CEO job include Peter Carroll and Luke Hayden.
The Federal Housing Finance Agency is still weighing final risk-to-capital rules for mortgage insurance firms that conduct business with Fannie Mae and Freddie Mac, with a target release date of mid-December, MI executives told Inside The GSEs. MI sources with knowledge of the situation said the FHFA will likely issue a risk-to-capital minimum of 18:1 compared to the current standard of 25:1. Also, there is talk of a phase-in period and bi-furcation for legacy versus new companies.
The once deadlocked but now all-but-certain confirmation of Rep. Mel Watt, D-NC, to be the new director of the Federal Housing Finance Agency has left industry observers uncertain as to the continued policy direction of the FHFA. Based on client conversations, Compass Point Research & Trading Analyst Isaac Boltansky speculated in an analysis that the FHFAs announcement last week to retain its baseline maximum conforming loan limit was influenced by Watts widely expected, pending confirmation.
The Federal Housing Finance Agency may be close to picking a chairman to head the common securitization platform project, which still does not have a chief executive officer, according to one source briefed on the matter. This official, who requested his name not be used, said there are two prospects for the chairman slot, but FHFA still hasnt decided on one. The CSP, formally known as Common Securitization Solutions LLC, is a joint venture equally owned by Fannie Mae and Freddie Mac. CSS recently signed a lease on office space in Bethesda, MD, just outside the District of Columbia.
Legislation that would allow privately-insured credit unions access to the Federal Home Loan Bank system has been introduced in the House.Introduced last week by Rep. Steve Stivers, R-OH, and Rep. Joyce Beatty, D-OH, H.R. 3584, the Capital Access for Small Community Financial Institutions Act of 2013, would amend the Federal Home Loan Bank Act to allow privately insured credit unions to be eligible for FHLBank membership.
Freddie Mac this week racked up another settlement in the GSEs recent ongoing series of mortgage buyback deals when Bank of America announced it will pay $404 million to settle repurchase obligations tied to loans sold between 2000 and 2009. The payment also compensates Freddie for certain past losses and potential future losses relating to denials, rescissions and cancellations of mortgage insurance, the GSE said. The amount is less $13 million of repurchases already made.
A group of four senators has asked the Obama administration and regulators to reject plans by municipalities to use eminent domain to acquire underwater performing mortgages, warning of a dire impact upon the entire mortgage lending space if such a proposal takes root. In a letter dispatched last week to Treasury Secretary Jack Lew and Housing and Urban Development Secretary Shaun Donovan, the bipartisan quartet of senators expressed their dismay that the administration has been largely silent on Richmond, CAs proposal to seize performing mortgages, then refinance them into an FHA product.
The Federal Home Loan Bank of Seattle announced that its regulator, the Federal Housing Finance Agency, has amended the Banks consent order in keeping with its improved financial performance. In October 2010, the FHFA directed the Seattle Bank to implement steps to stabilize its business, improve its capital classification and return to normal operations.
Reform-minded lawmakers should move with all deliberate speed to restructure, recapitalize and remove Fannie Mae and Freddie Mac from the governments hands or risk the taxpayers stake in the mortgage market, experts told members of the Senate Banking, Housing and Urban Affairs Committee. The committees hearing prior to the Thanksgiving break focused on when and how to terminate the charters of the two government-sponsored enterprises, as well as whether current revenue held by Fannie and Freddie should be used to offset the cost of the new system.