The SEC is Seeking Comment on a Joint Agency Proposed Rule Relating to Incentive-based Compensation Arrangements

On May 6, 2016, the Office of the Comptroller of the Currency, Treasury (OCC), the Board of Governors of the Federal Reserve System (Board), the Federal Deposit Insurance Corporation (FDIC), Federal Housing Finance Agency (FHFA), the National Credit Union Administration (NCUA), and the U.S. Securities and Exchange Commission (SEC) issued and sought comment on a joint proposed rule to implement section 956 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) relating to the prohibition on and the disclosure of information of incentive-based compensation arrangements.  The deadline for comments is July 22, 2016.  Notice of Proposed Rulemaking and Request for Comment.

FHFA Increases 2016 Multifamily Lending Caps

On May 4, 2016, the Federal Housing Finance Agency announced that it increased its 2016 multifamily lending caps for Fannie Mae and Freddie Mac from $31 billion to $35 billion.  The increase is based on growing estimates of the overall size of the multifamily finance market. Release.

Justice Friedman of the New York Supreme Court Dismisses Two FHFA Repurchase Actions

On April 12, 2016, Justice Marcy Friedman of the New York Supreme Court granted motions to dismiss in two RMBS breach of contract actions filed by FHFA against Morgan Stanley ABS Capital I Inc. (“MSAC”) and Morgan Stanley Mortgage Capital Holdings LLC (“Morgan Stanley”).  In the decisions, he Court dismissed the actions on similar grounds and granted the parties the opportunity to brief claims for failure to notify, in light of the October 13, 2015 First Department’s decision in Nomura Home Equity Loan Inc. Series 2006-FM2 et al. v. Nomura Credit & Capital Inc.

Like Justice Friedman’s ruling last month in ACE Securities v. DB Structured Products, Inc., which we previously covered, the Court held that both actions were not rendered untimely by the Plaintiff’s failure to file repurchase demand condition precedent prior to the filing of the summons with notice.  However, the FHFA, as certificate holder, lacked standing to commence the action and thus the Trustee’s cause of action was untimely because it did not relate back to the FHFA’s summons with notice.  In so holding, the Court rejected the Trustee’s arguments in both cases that the action was timely commenced, and also that the accrual clause in the RMBS extended the statute of limitations, and that the federal Housing and Economic Recovery Act of 2008, applicable to certain actions brought by FHFA, extended the limitations period.  Finally, the Court also held that no tolling agreements saved Trustee’s claims, and also dismissed the causes of action for breach of the implied covenant of good faith and fair dealing, breach of repurchase obligations, and anticipatory breach. Decision 116. Decision 134.

FHFA, Fannie Mae and Freddie Mac Announce Independent Dispute Resolution Program

On February 2, the Federal Housing Finance Agency (the “FHFA”) announced that Fannie Mae and Freddie Mac have implemented an independent dispute resolution process for resolving repurchase disputes.  The process would allow lenders to submit their unresolved loan level disputes to an arbitrator after certain other processes have been exhausted.  Press Release.

Fannie Mae and Freddie Mac to Issue New Seller/Servicer Eligibility Requirements

On May 20, the FHFA announced that Fannie Mae and Freddie Mac are issuing new finalized operational and financial eligibility requirements for mortgage seller/servicers.  The updated requirements will be communicated through guides, bulletins and announcements and through best practices documents provided by Fannie and Freddie.  The operational requirements become effective no later than September 1, 2015 and the financial requirements become effective December 31, 2015.  ReleaseFannie Mae and Freddie Mac FAQs.

FHFA Releases Update on the Single Security Project

On May 15, the FHFA released an update on the structure of the Single Security, a project involving the development of a single mortgage-backed security that would be issued by Fannie Mae or Freddie Mac.  The update contains FHFA’s decisions made in response to input previously provided by industry stakeholders.  ReleaseUpdate.

Court Enters $806 Million Judgment in FHFA v. Nomura

On May 16, 2015, Judge Denise Cote of the United States District Court for the Southern District of New York entered a judgment requiring Nomura and RBS to buy back, at a total cost of $806 million, seven RMBS certificates sold to Fannie Mae and Freddie Mac from 2005 to 2007.  The judgment stemmed from Judge Cote’s May 11, 2015 Opinion finding Nomura and RBS liable for violations of the Securities Act of 1933, the D.C. Securities Act, and the Virginia Securities Act.  For those certificates for which FHFA prevailed under multiple statutes, FHFA was permitted to, and did, elect the maximum available remedies.  Judge Cote also ordered that FHFA is entitled to post-judgment interest, reasonable attorneys’ fees, and costs.  Judgment.

FHFA Report Details Progress on the 2014 Strategic Plan for Fannie Mae and Freddie Mac Conservatorships

On March 16, the  FHFA issued a Progress Report on the initiatives outlined in the 2014 Strategic Plan for the Conservatorships of Fannie Mae and Freddie Mac and the 2014 Conservatorship Scorecard.  The Progress Report describes activities Fannie Mae and Freddie Mac undertook in 2014 to further FHFA’s conservatorship goals: Maintain, Reduce, and BuildReleaseReport.

FHFA Updates Requirements for Freddie and Fannie Sales of Non-Performing Loans

On March 2, FHFA announced changes to requirements for sales of non-performing loans (NPLs) by Freddie and Fannie to reduce the number of severely delinquent loans held in their inventories and to transfer risk to the private sector.  The requirements are expected to encourage broad participation by potential investors and provide for future publication of aggregate data about borrower outcomes.  ReleaseFact Sheet.