The Securities and Exchange Commission gave a thumbs-up last week to some changes to the rules governing the to-be-announced market proposed by the Financial Industry Regulatory Authority to increase transparency in agency pass-through MBS transactions. The new changes will institute clear requirements for more timely reporting of two subsets of MBS TBA transactions – those that are “for good delivery” (GD) and those that are “not for good delivery” (NGD) – and include some information that has not been publicly disclosed before. The intent of the changes is to improve the ability of investors to...

Increases in mortgage insurance premiums and adjustments to loan programs will likely make FHA-insured mortgage loans more costly and difficult to obtain for future FHA borrowers, according to industry participants. Lenders estimate that about 40 percent of home purchases and even a larger share of first-time homebuyer purchases are insured by the FHA. They say the premium changes could have a detrimental impact on homebuyers in 2012. The FHA has increased its premiums in order to shore up its books in light of high delinquency and foreclosure rates and to strengthen its depleted capital reserves, which have ...

The Department of Housing and Urban Development said it would review and update as necessary its requirements for servicers of FHA-insured loans in conjunction with the establishment of new standards by the Consumer Financial Protection Bureau. HUD wants to ensure coordination between the FHA and CFPB standards and that each set of standards provides effective solutions for borrowers, said an FHA spokesman. On April 9, the CFPB previewed some of the mortgage servicing rules, which the agency plans to propose this summer and adopt in January 2013. It is unclear whether ...

Implementing proposed legislation aimed at improving the safety and soundness of the FHA single-family program would cost taxpayers $11 million over a four-year period if the bill is enacted in late 2012 and the necessary amounts are appropriated each year, according to the Congressional Budget Office. In an analysis of H.R. 4264, the FHA Emergency Fiscal Solvency Act of 2012, the CBO estimated that $9 million would be spent on mandatory actuarial studies on the health of the FHA Mutual Mortgage Insurance Fund and $2 million for other costs over the 2013-2017 period. The legislation would not affect direct spending or revenues and, therefore ...

MetLife, Inc. has announced that it is leaving the reverse mortgage business as part of a broader business plan to exit the mortgage market and focus strategically on global insurance and employee benefits. Nationstar Mortgage will purchase MetLife’s reverse mortgage servicing portfolio. MetLife Bank will no longer accept new reverse mortgage loan applications and registrations. MetLife’s entire retail banking business, including mortgages, accounted for less than 2.0 percent of the company’s 2011 operating earnings. Last year, the company decided to ...

With the second-generation refinance program for underwater Fannie Mae and Freddie Mac borrowers gaining momentum in the market, Senate Democrats are drawing up new legislation designed to knock down lender reluctance about the Home Affordable Refinance Program. Legislation being drafted by Sens. Robert Menendez (NJ) and Barbara Boxer (CA) would force the government-sponsored enterprises to waive representations and warranties on new HARP loans regardless of whether the refi lender serviced the previous mortgage. Lingering concerns about reps and warranties exposure have caused many top lenders to...

An ad hoc coalition of trade associations, housing and consumer advocates, and community groups urged the Consumer Financial Protection Bureau last week to craft a “qualified mortgage” rule that encompasses a wide range of mortgage products and underwriting practices to protect credit availability. The varied group, which included the Mortgage Bankers Association, the American Securitization Forum, Consumer Mortgage Coalition and American Bankers Association, acknowledged that its members hold different views about whether the QM should be designed as a safe harbor or a rebuttable presumption...

Fannie Mae and Freddie Mac have reluctantly directed their servicers to begin making payments next month in compliance with Chicago’s vacant property ordinance “under protest” as the GSEs’ conservator continues to fight the local legislation in court. Starting May 1, Fannie servicers will be required to include a written protest along with the ordinance’s $500 registration fee, according to a letter to servicers issued earlier this month. “All payments made to the city of Chicago, including vacant property registration payments, must be made ‘under protest’ by sending a written communication to the city with the registration fee,” explained Fannie. “This written communication must note that the Federal Housing Finance Agency determined that the registration fee does not apply to Fannie Mae, and that the registration fee is therefore paid under protest.”

Lawmakers in California this week pulled from their agenda a series of bills designed to help borrowers in a significant, if temporary, victory for the mortgage industry in the long drawn-out legal battles spawned by the mortgage collapse in 2008. The proposed California Homeowner Bill of Rights featured many of the requirements that have been incorporated in evolving national servicing standards. One new provision would require servicers to pay a $25 “fine” each time a borrower defaults; the money would go to a fund to investigate fraud. But two of the six bills in the package were suddenly pulled from...

The Department of Housing and Urban Development has announced discrimination settlements with two mortgage lenders accused of denying FHA mortgage loans to expectant mothers. Two women filed separate complaints against Magna Bank in Nashville, TN, and Home Loan Center in Irvine, CA, alleging a violation of the Fair Housing Act. According to the complaints, the women’s loan applications were rejected because they were pregnant and temporarily on leave. The settlement agreement with Magna Bank requires the bank to pay the complainant $14,085 for allegedly ...