Legislation gaining momentum in Congress to create a covered bond framework still lacks the endorsement of the Federal Deposit Insurance Corp. Analysts note that the FDIC’s concerns need to be addressed for there to be any hope of establishing a non-agency market via covered bonds. Last week, the House Financial Services Committee approved H.R. 940, the U.S. Covered Bond Act of 2011, by a 44-7 bipartisan vote. However, the committee rejected...

If you make your living originating residential mortgages, you’re going to have to be licensed either by the state or by the Nationwide Mortgage Licensing System and Registry under the federal Secure and Fair Enforcement for Mortgage Licensing Act, otherwise known as the SAFE Act, under a new final rule from the Department of Housing and Urban Development. …

The Department of Housing and Urban Development is conducting an in-depth review of mortgage lenders, including those that pose the highest risk, in anticipation of a drastic reduction in the number of FHA lenders because of recent FHA reform measures. Responding to a recent report by the HUD Office of the Inspector General on the FHA lender recertification process, HUD said its Lender Approval and Recertification Division has begun manual reviews of 200 FHA-approved lenders that could potentially spell trouble for the agency. The more detailed reviews are part of HUD’s implementation of a final lender-related rule issued in June last year. The rule increased...

Two U.S. senators and their staffs are working with the Department of Housing and Urban Development to ensure that FHA policies regarding interest charges protect borrowers. Sens. Ben Cardin, D-MD, and Johnny Isakson, R-GA, and HUD are trying to resolve an existing FHA policy that allows lenders to charge interest on a mortgage loan through the end of the month, even if the borrower pays the loan off earlier in the month. The policy apparently aligns with Ginnie Mae’s guarantee to securities holders of a full month’s interest on a securitized FHA loan even if that loan is paid in full at the beginning of the month. Only the FHA has this sort of...

The FHA has clarified its approval and recertification process and policies for condominium projects in newly revised guidelines. Guidance in Mortgagee Letter 2011-22 formalizes and expands policies Ginnie Mae put in place in 2009 and lays the groundwork for a formal rulemaking later this year. The mortgagee letter includes a condominium policy guide and implementation schedule laying out timelines for compliance. The revised guidelines “preserve FHA’s role in the condo market during these difficult times while making certain we manage risks in a responsible way,’ said FHA Acting Commissioner Robert Ryan. Overall, the mortgagee letter and guide spell out...

The FHA’s mortgage insurance portfolio continues to improve despite lingering uncertainty in housing prices, according to the Department of Housing and Urban Development’s latest quarterly report to Congress. HUD gave the FHA Single-Family Mutual Mortgage Insurance Fund a cautious thumbs up in its FY 2011 second-quarter report as the fund surpassed earlier actuarial forecasts halfway through the fiscal year. There was mostly encouraging news from several fronts. HECM endorsements were up 12 percent during the quarter and 2 percent on a year-over-year basis. Forward mortgage loans endorsements, which totaled 285,725, were down 23 percent from...

Any reform proposal determining the future of the secondary mortgage market must retain, in some reduced but meaningful form, key features and principles that give all lenders equal access to the secondary mortgage market, according to industry representatives and policy advocates. Testifying before the Senate Committee on Banking, Housing and Urban Affairs this week, community bankers and credit union industry representatives expressed their concern about a proposal to have some of the largest mortgage lenders replace Fannie Mae and Freddie Mac if the government-sponsored enterprises were ...

Lawmakers on the House Financial Services Committee this week approved by a wide bipartisan margin a bill that would create the legislative framework for a covered bond market in the U.S., but not before some haggling regarding the role of the federal regulators. The committee voted 44-7 in favor of H.R. 940, the U.S. Covered Bond Act of 2011, clearing the way for the bill’s consideration by the full House of Representatives. Rep. Scott Garrett, R-NJ, chairman of the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, said H.R. 940 sets up “legal certainty” that is a core element of...

A bill that would create a legislative framework for a covered bond market in the U.S., as well as a potential competitor for the Federal Home Loan Bank system, cleared committee this week following some fine-tuning by its sponsors and is headed to the full House for consideration.The House Financial Services Committee voted 44-7 in favor of H.R. 940, the U.S. Covered Bond Act of 2011.

There is a huge disconnect between some members of Congress and the reality of the private market, that broad investor appetite for non-agency mortgage-backed securities is unlikely to rebound anytime soon, according to panelists at the American Securitization Forum annual conference. “Once you figure out how to get the government sector out of the market, [the belief is that] the private sector will step in and pick up all of that slack, and therefore they will do...