Although Congress and the presidents just-in-time agreement to forestall the fiscal cliff crisis, at least for a while, provided some mortgage market-friendly results, MBS investors still face some challenges in 2013, analysts say. The American Taxpayer Relief Act, H.R. 8, includes a one-year extension through Dec. 31, 2013, of the Mortgage Debt Forgiveness Act that exempts loan amounts forgiven by lenders and foreclosures from taxable income. Deductions on mortgage insurance premiums for borrowers making below $110,000 were extended through 2013 and made retroactive to cover 2012, as well. The combination of tax relief on mortgage insurance premiums and debt forgiveness should have...
Proponents of creating a covered bond market in the U.S. say the prospects of such a move have never looked better in the wake of legislative momentum in Congress, the off-year election year and the adoption of a covered bond framework in Canada. Last month, Canadas national housing agency announced details of the legal framework for the issuance of Canadian covered bonds. Under the framework, registered covered bonds will be issued through a program that will be run by the Canada Mortgage and Housing Corp. The Canadian framework will operate...
The final rule issued by the Consumer Financial Protection Bureau this week to define ability-to-repay requirements and qualified mortgages puts non-agency and subprime mortgages at a significant disadvantage to prime and agency mortgages. The slant against non-agency loans goes beyond what was required by the Dodd-Frank Act, according to industry analysts. The rule is set to take effect Jan. 10, 2014. Under the final rule, qualified mortgages must meet...
Sales of delinquent mortgages to nonbank servicers are expected to continue throughout 2013, according to industry analysts. The sale of $306 billion in mortgage servicing rights announced this week by Bank of America could be the largest transfer this year, but there appears to be plenty of remaining volume for established special servicers and expected new nonbank servicers. We believe that other banks with large MSR assets may also begin to complete sales or pursue other strategies to limit their size on bank balance sheets, Fitch Ratings said. Analysts suggest...
Nationstar Mortgage announced this week that it agreed to purchase $113 billion in non-agency mortgage servicing rights, as measured by unpaid principal balance, from Bank of America. The sale will more than double Nationstars non-agency servicing portfolio. Some $102 billion in agency mortgages are included in the sale, which priced at $1.3 billion. Walter Investment Management concurrently announced the purchase of $93 billion of unpaid principal balance in Fannie Mae-backed servicing assets from BofA. Ocwen Financial also reportedly bid...
An $8.5 billion settlement this week between federal regulators and 10 servicers included a large portion of non-agency mortgages. Servicers with significant non-agency holdings were also left out of the settlement, though federal regulators said they are still working toward a deal with those companies. The settlement applies to foreclosures initiated in 2009 and 2010. Non-agency mortgages had much higher foreclosure rates than other mortgage types during that time. Aurora, Bank of America, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank and Wells Fargo agreed...
Servicers handling portfolio loans and non-agency mortgages continue to increase their use of principal reduction loan modifications, according to the Office of the Comptroller of the Currency. Some 23,335 principal reduction mods were completed in the third quarter, up from 11,178 in the third quarter of 2011 and from 14,944 in the second quarter of 2012. The mods accounted...[Includes four briefs]
Mortgage industry participants are confident that newly confirmed FHA Commissioner Carol Galante will deliver on reforms she committed to in an effort to reach out to Republican critics. Eighteen Senate Republicans veered away from their hardline party colleagues to help Carol Galante secure confirmation of her nomination as the Department of Housing and Urban Developments chief overseer of the FHA mortgage insurance program and overlord of housing policies. Galante broke through the GOP firewall Dec. 30 after the Senate voted 69 to 24 to approve her nomination. She needed at least 60 votes to ...
Although it is far from settled that the FHA will raise its downpayment threshold from the current 3.5 percent, there is a growing fear among some lenders that Republicans in Congress might push for a 10 percent downpayment. If that happens, said David Lykken, managing partner of Mortgage Banking Solutions, Austin, TX, it would bring HUD to its knees. Lykken and others fear that anything north of 5 percent would hammer the market, in particular first-time homebuyers who use the program heavily for purchases as opposed to refinancings. We need the FHA charter to help first-time buyers, he said. How much of a downpayment hike certain House GOP members might demand will be ...
A federal appeals court in Washington, DC, has overturned a lower courts dismissal of a lawsuit accusing the Department of Housing and Urban Development of denying protection for surviving spouses of deceased principal borrowers of reverse mortgages against ejection due to foreclosure. The case, Robert Bennett, et al. v. Shaun Donovan, revealed an apparent inconsistency between HUD regulations and the federal statute that created the FHAs Home Equity Conversion Mortgage Program. This inconsistency was at the root of the district courts previous decision to dismiss plaintiffs claim for lack of standing, which the ...