Analysts and legislative history suggest that Congress could still act to keep the “temporary” high-cost conforming loan limit at elevated levels. Advocates of the non-agency market have long-anticipated the drop in the loan limit, currently set to occur in October without further action from Congress. An extension of the $729,750 loan limit this year seems unlikely with the Obama administration supporting a decline to at least $625,500. Many Republicans also support a decrease in the role ...

Lenders and even consumer advocates are pushing for expansions to proposed streamlined refinance standards for “qualified mortgages.” Federal regulators proposed an exception to the QM ability-to-repay requirements for refis of “non-standard mortgages” into standard mortgages. “MBA urges the CFPB to revisit these criteria so more borrowers qualify for streamlined products and such products are treated as QMs,” the Mortgage Bankers Association said in a comment letter sent to the Federal Reserve. The comment period on the proposed rule ...

The Federal Reserve last week fined Wells Fargo & Co. $85.0 million, alleging that a non-bank subsidiary of Wells steered prime borrowers to subprime mortgages. The consent order is the first formal enforcement action taken by a federal bank regulatory agency to address alleged steering of borrowers into high-cost subprime mortgages. The civil money penalty is also the largest the Fed has assessed in a consumer-protection enforcement action. In addition to the civil money penalty, the order requires that Wells compensate more than ...

The Federal Housing Finance Agency this week filed a lawsuit against UBS Americas alleging misstatements and omissions on non-agency mortgage-backed securities purchased by Fannie Mae and Freddie Mac. FHFA Acting Director Edward DeMarco warned that further action against other non-agency MBS issuers is likely. “From the issuance of 64 subpoenas last year to the filing of this lawsuit and further actions to come, we continue to seek redress for the losses suffered by ...

An increasing number of non-agency mortgage-backed security investors have opposed Bank of America’s proposed $8.5 billion settlement related to buybacks and servicing. The proposed settlement announced last month was seen as a precedent for the sector, though final approval remains far from certain. MBS investors have raised concerns about the settlement price, conflicts of interest and second liens, among other issues. If approved, the settlement would apply to all investors in the 530 Countrywide Financial securities in question, not just to the 22 large firms represented by ...

Ocwen Financial has posted impressive results with a shared appreciation modification program that recently received broad regulatory approval. The servicer noted that the mods, which include principal reduction, benefit borrowers and mortgage investors.Ocwen launched a SAM pilot program in August and announced this week that it hopes to expand the program nationwide. Ocwen CEO Ronald Faris said 79.0 percent of borrowers that have been offered the mods have accepted and the pilot program had a ...

Funds participating in the Public-Private Investment Program suffered large decreases in their net returns due to the significant decrease in non-agency mortgage-backed security prices in the second quarter of 2011. Pricing during the quarter was negatively impacted by the Federal Reserve’s sales of non-agency MBS from the Maiden Lane II portfolio. All eight of the Public-Private Investment Funds experienced a decrease in their net internal rates of return in the second quarter of 2011 compared with the previous quarter, according to the Treasury Department. And seven of the PPIPs experienced a ... [includes one data chart]

Bank of America agreed this week to fully participate in a principal reduction modification program in California, according to the California Housing Finance Agency. BofA had participated in the program on a pilot basis since February. Qualifying borrowers are eligible for up to $100,000 in principal reduction via the “Keep Your Home California” program. Mortgage holders are required to match dollar-for-dollar the amount of ...

The Federal Reserve fined Wells Fargo $85 million last week over high-pressure compensation policies in the firm’s finance company that allegedly led to steering of prime borrowers to more lucrative non-prime mortgages. The $85 million fine is the largest ever levied by the Federal Reserve in a consumer enforcement case. Wells has since shut down Wells Fargo Financial, its subprime subsidiary that was the focus of the Fed’s charges. CEO John Stump said in a statement the “alleged actions” were “committed by a relatively small group of team members.” The Fed said Wells Fargo Financial’s incentive compensation and sales quota programs fostered ... [includes one data chart]

Equipment and automotive ABS issuance may flirt with new record highs this year or next as the 2008 market collapse fallout dissipates and the benefits of solid underwriting continue to accrue, some leading industry executives said this week. Equipment ABS has rebounded substantially, according to Julie Schlueter, who is responsible for issuance of structured products and unsecured bonds at Case New Holland Global, a major manufac-turer of agricultural and construction equipment, and its captive finance subsidiary, CNH Capital. In 2007, new issuance in the sector exceeded ...