Joint Federal Regulators Approve Final Risk Retention Rules

On October 21 and 22, the Fed, HUD, FDIC, FHFA, OCC, and SEC jointly approved final risk retention rules.  The final rules, which implement Section 941 of Dodd Frank, generally follow the re-proposed rules issued in August 2013, mandating that sponsors retain at least 5% of the credit risk in asset-backed securities transactions.  Generally, risk may be retained by holding either a horizontal or avertical slice of issued securities, while additional options are available for specific types of securitizations.  The rules will apply toresidential mortgage-backed securities one year after publication in the Federal Register, and will apply to all other asset classes two years after publication.  Final Rules.  Joint Release.

Housing Survey Takes Deep Dive into U.S. Housing Stock

On October 16, HUD released the American Housing Survey (AHS), which takes a deep look at the U.S. housing stock including detailed information on housing costs and quality. The 2013 AHS includes new information about neighborhood social life, use of public transportation, and the extent to which American families are prepared for disaster. Release. Survey.

HUD Proposal on QM Definition

On September 30, HUD issued a proposed rule that would define a Qualified Mortgage (QM) that would be insured, guaranteed or administered by HUD, including single-family forward mortgages insured by FHA.  In order to meet HUD’s QM definition, mortgage loans must: (i) require periodic payments; (ii) have terms not to exceed 30 years; (iii) except in certain circumstances, limit upfront points and fees to no more than 3% with adjustments to facilitate smaller loans; and (iv) be insured or guaranteed by FHA or HUD.  Comments on the proposed rule must be submitted by October 30.  HUD ReleaseHUD Proposed Rule.

Joint Proposal on Risk Retention

On August 28, the FDIC, Fed, FHFA, OCC, SEC and HUD issued a notice of revised proposed rulemaking relating to required risk retention by sponsors in securitization transactions.  The proposed rule would define “qualified residential mortgage” (QRM) in the same way that the CFPB has defined qualified mortgages (QMs) and would exempt securitizations of QRMs from the risk retention requirements.  Comments on the revised proposed rule must be submitted by October 30.  Joint ReleaseProposed Rule.

Extension of Loan Modification Programs

On May 30, Treasury and HUD announced an extension of the Making Home Affordable Modification Program (HAMP) through December 31, 2015.  In addition, on May 30, the FHFA announced that it has directed Fannie Mae and Freddie Mac to extend the HAMP modification program and the streamlined modification initiative through year-end 2015.  HAMP eligibility was originally scheduled to sunset in December 2013, and the streamlined modification initiative was originally expected to end in August 2015.  Treasury ReleaseFHFA Release.

Preliminary Results for HUD’s Notes Sales Under Distressed Asset Stabilization Program

On December 3, HUD announced preliminary results from the first loan sale under its expanded Distressed Asset Stabilization Program (DASP)The next sale, in the first quarter of 2013, will include approximately 10,000-15,000 loans, and will have targeted Neighborhood Stabilization Outcome pools located in certain metropolitan areas in Georgia, California, Florida, and Ohio.  HUD Release.

HUD Publishes Final Rule on Rental Assistance Demonstration

On July 26, the HUD’s final rule on Rental Assistance Demonstration (“RAD”) was published in the Federal Register. RAD allows public housing agencies and owners of certain federally-assisted housing properties to convert current levels of government assistance into long-term contracts. Release. Final Rule.