The Department of Housing and Urban Development has reportedly offered to release major servicers from some liability related to FHA mortgages as part of a pending settlement related to foreclosure problems. While the offer may sweeten the deal for banks to settle with state attorneys general and federal regulators, observers say its not a total game changer. The complex negotiations have lasted more than a year, stemming from servicing practices that include robo-signing of foreclosure documents and poor communication with borrowers. A key sticking point has been...
The Federal Reserve Bank of New York will ask its primary dealers, as part of best practices, to raise their upfront cash collateral for MBS trades. A NY Fed spokesman denied that the change in collateral requirements was a reaction to the recent collapse of MF Global, a primary dealer. Since its last foray into the agency MBS business in 2010, the agency has been considering raising the margin for MBS deals, he said. The spokesman said a best practices guidance issued by the NY Feds Treasury Market Practices Group in September 2010 requires trading desks to consider...
The Federal Housing Finance Agency earlier this month issued a proposed rule to require the Federal Home Loan Banks to monitor and assess the eligibility of each Bank member for access to long-term advances through compliance with the Community Reinvestment Act and the members first-time homebuyer standards.To maintain access to FHLBank long-term credit and community investment products, Bank members are required to submit a community support statement to the FHFA every two years to document their CRA performance and record of lending to first-time homebuyers.
ABS issuers are scrambling to get a handle on complex new rules to mitigate conflicts of interest in the structured finance market that are being developed by the Securities and Exchange Commission and federal banking regulators. At the end of the day, well spend lots of time figuring out how to comply, said Bianca Russo, managing director and associate general counsel at JPMorgan Chase, during a seminar sponsored last week by the American Securitization Forum. Its going to be a challenge to comply, however the rules turn out. Complexity and consistency are...
A reduction to the Federal Home Loan Bank systems advance business and investment portfolio would diminish Bank profitability, resulting in a credit negative for U.S. commercial banks, according to a recent report by Moodys Investors Service. Limiting access to FHLBank funding would reduce alternative liquidity for U.S. banks, noted the Moodys report A Diminished Federal Home Loan Bank System Would Weaken U.S. Banks.
For an all too brief moment last week there was bipartisanship on Capitol Hill as exasperated Democrats and Republicans took turns questioning and berating the CEOs of Fannie Mae and Freddie Mac and their regulator surrounding the issue of executive compensation at the two GSEs.Federal Housing Finance Agency Acting Director Edward DeMarco was called before the Senate Banking, Housing and Urban Affairs Committee and the House Committee on Oversight and Government Reform to explain some $13 million in performance bonuses to Fannie CEO Michael Williams and Freddie CEO Charles Haldeman and eight other senior executives at the taxpayer-subsidized firms.
Both Fannie Mae and Freddie Mac retained their hefty shares of mortgage-backed securities with something of a bump during the third quarter of 2011, according to a new Inside The GSEs analysis.The GSEs issued a combined $174.8 billion in MBS in the third quarter, a 12.8 percent increase from the second quarter. Compared to the third quarter of 2010, Fannie and Freddie saw an 11.2 percent decrease in MBS issuance during the first nine months of the year.
Mortgage banking earnings improved significantly during the third quarter of 2011 on both the production and servicing sides of the business, according to a new analysis by Inside Mortgage Trends. A sample of nine mortgage banking firms showed a combined $2.26 billion in production-related income during the third quarter. That reversed a disastrous $11.97 billion combined loss on production during the second quarter of 2011. The groups second-quarter results were skewed by Bank of Americas stunning $13.21 billion net loss on production income during...(Includes one data chart)
With the severe housing recession having created a more than abundant supply of poorly performing mortgages that will likely linger for years, step servicing, or varying compensation based on the amount of servicing work performed, may well be the wave of the future. Currently, many in the industry are proposing step servicing fees for transactions including newly originated prime jumbo product, said Kathleen Tillwitz, senior vice president of U.S. and European structured finance for DBRS, in a recent analysis. As a result, the servicing fees we are seeing for prime jumbo loans are currently ranging anywhere from...
Despite low mortgage rates, the outlook for the purchase-mortgage market remains gloomy. And you can blame it mostly on current housing market conditions. One of the biggest problems plaguing the housing market, according to the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey, is the large share of distressed properties that make up home sales in most areas of the country. Nationally, foreclosed properties and short sales accounted for a whopping 48.4 percent of home purchase transactions tracked in the HousingPulse Distressed Property Index during...