AARP has filed a class action lawsuit against Wells Fargo Bank and Fannie Mae in the U.S. District Court for the Northern District of California in San Francisco on behalf of reverse mortgage borrowers and their survivors in what it says is an attempt to head off illegal Home Equity Conversion Mortgage foreclosures and evictions.

One of the most important issues for mortgage lenders and homebuyers alike in the whole qualified mortgage/risk-retention/ability-to-repay debate is how much legal liability lenders will have over the mortgages they originate in the Dodd-Frank era. For policymakers, one of the biggest decisions they will have to make to bring certainty to that question is which legal standard to impose, a “rebuttable presumption” or a “safe harbor.” …

The Department of Housing and Urban Development has launched a new web-based mapping tool displaying the location of all foreclosed properties being held by Fannie Mae, Freddie Mac and the FHA, which is almost half of all real estate-owned or REO properties in the U.S. HUD said its REO Portal is intended to help local communities, homebuyers and responsible investors to acquire these properties and accelerate efforts to stabilize local housing markets. …

Standard & Poor’s and Fitch Ratings have raised concerns about the proposed risk-retention rule that has sparked an outcry among MBS issuers, but the rating services appear to be taking a more measured view – in fact, S&P says it may be good for the market’s long-term health. In a recent report, S&P agreed with the industry consensus that the proposed rule won’t help the housing market and non-agency MBS sector right now. But the new standard for securitization, which sets a high bar for qualified residential mortgages that would be exempt from a ...

The recent rancorous debate over raising the debt ceiling brings little hope of relief from the overwhelming amount of regulation coming down the pike. Analysts say the uncertainty has made it more difficult to quantify risks for MBS and other securitized products. Analysts at Bank of America/Merrill Lynch said the outcome of the debate was far worse than expected, forcing them to temper their optimism for securitized products. Instead, they are calling for a more neutral exposure. “The pragmatism we thought we would see never really emerged,” said Chris Flanagan, an analyst with the firm. “Instead ...

Rules proposed by federal regulators to establish “qualified mortgage” and ability-to-repay standards would severely limit the originations of alternative mortgages, including certain ARMs, according to lenders. Consumer advocates, meanwhile, are calling for even more restrictive underwriting standards than those proposed by the Federal Reserve. In April, the Fed proposed strong ability-to-repay requirements that expand upon existing rules for higher-priced mortgages, include stringent penalties for violations, and would apply to ...

Small FHA-approved lenders no longer have to submit audited financial statements to the Department of Housing and Urban Development in order to be approved or renewed for FHA programs, according to new guidelines issued July 28. Under Mortgagee Letter 2011-25, small supervised lenders regulated by the Federal Deposit Insurance Corp., National Credit Union Administration or the Office of the Comptroller of the Currency are exempt from current regulation requiring all FHA lenders to submit annual audited financial statements as a condition for their approval or continued participation in FHA programs. Currently, the regulation applies to...