The Department of Housing and Urban Development will sell an estimated 5,000 nonperforming mortgages on the brink of foreclosure in September under an expanded FHA loan-sale program aimed at preventing further growth of the agency’s massive inventory of real estate owned properties. How the deals under the Distressed Asset Stabilization Program will be structured and priced is still not clear. The details are being worked out, said a HUD spokesman. The DASP is an expansion of an FHA pilot program, the Mortgage Acquisition and Disposition Initiative, which began in 2010 and has resulted in the purchase...
A continued outpouring of concerned industry commentary about the Consumer Financial Protection Bureau’s pending ability-to-repay rule has prompted the bureau to hit the reset button on the public comment period, giving the mortgage lending industry another opportunity to address some limited, specific issues before the rule becomes final. During a hearing in the Senate Banking, Housing and Urban Affairs Committee, Sen. Mike Crapo, R-ID, pressed his concerns about the rule with CFPB Director Richard Cordray and questioned him about the bureau’s intentions. “The housing credit market...
The Consumer Financial Protection Bureaufs recently proposed method of extending its supervisory powers to nonbank mortgage lenders it considers potentially risky seems fairly straightforward. But look closely and several potential sinkholes emerge for such lenders, one leading attorney serving the mortgage industry suggested. Despite its outward simplicity, the proposed process presents several potential pitfalls for nonbanks, according to Eric Mitzenmacher, an associate attorney in the Washington, DC, office of the K&L Gates law firm. To begin with, the bureau does not define griskh...
Data are one of the big drivers behind the Consumer Financial Protection Bureau’s decision to re-open the public comment period on its ability-to-repay rule before making the new regulation final. The Federal Register notice that announces the re-opening the comment period explains that the CFPB has received data from the Federal Housing Finance Agency tracking the performance of loans bought or backed by Fannie Mae and Freddie Mac from 1997 to 2011. The CFPB has also received data on other securitized mortgages. According to the bureau, the data can be tapped for a variety...
House Financial Services Financial Institutions Subcommittee Chairman Shelley Moore Capito, R]WV, and Rep. Brad Sherman, D]CA, have been circulating a gdear colleagueh letter in an effort to ratchet up political pressure on the Consumer Financial Protection Bureau to adopt a gsafe harborh for its pending qualified mortgage rule. gWe believe that the final rule must structure the QM as a strong legal safe harbor, not a rebuttable presumption. Both could still be challenged in court,h the lawmakers said. gHowever, as the Federal Reserve correctly stated in its preamble to the rule...
In the case of Brisbin v. Aurora Loan Services LLC, the U.S. Court of Appeals for the Eighth Circuit has ruled that a lender’s oral promise to postpone foreclosure is unenforceable; that is, that such a promise is a credit agreement that has to be in writing if it is to be enforceable. Borrower Alison Brisbin filed this lawsuit in Minnesota state court against Aurora Loan Services LLC, Mortgage Electronic Registration Systems Inc. and Freddie Mac, seeking legal and equitable relief from the foreclosure and sale of her home. She alleged three legal theories for invalidation of the...
Competition for non-agency jumbo originations is increasing, according to industry participants. The interest, largely from big banks looking to hold jumbos in portfolio and real estate investment trusts looking to securitize the assets, has led to a decline in interest rates.“All of a sudden it’s the asset of choice because big banks are uncomfortable with other assets, so they’re coming at jumbo home mortgages,” Jim Herbert, CEO of First Republic Bank, a lender that has long-focused on jumbos, said ... [Includes one data chart]
Non-agency mortgage-backed security investors and politicians on both sides of the aisle were critical this week of the recent $25.0 billion servicing settlement. The settlement requires principal reduction loan modifications on mortgages held in five banks’ portfolios and allows the servicers to receive credit for reducing principal on mortgages in non-agency MBS. Vincent Fiorillo, a trading/portfolio manager at Doubleline Capital, noted that the Association of Mortgage Investors is not opposed to principal reduction mods ...
Most major non-agency servicers met the June 1 deadline for the start of Tier 2 of the Home Affordable Modification Program, according to the Treasury Department. While overall HAMP performance has improved, some non-agency servicers have more improvements to make. HAMP Tier 2 was designed to help borrowers with debt-to-income ratios below 31 percent as well as those with rental properties. The Treasury this week revealed the HAMP Tier 2 progress for 18 servicers. Bank of America, Green Tree Servicing and ...
BDO Consulting wa selected this week to serve as the primary professional firm to help oversee the recent $25.0 billion servicing settlement. More than 30 BDO professionals will work with the settlement’s monitor to oversee the settlement. BDO is a professional services firm providing assurance, tax, financial advisory and consulting services. The company has worked with large retail mortgage lenders and financial institutions, and conducted related assessments and investigations ... [Includes four briefs]
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