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.

HUD Expansion of Sale of Troubled Mortgages

On June 8, HUD announced the establishment of the Distressed Asset Stabilization Program, an expansion of an FHA pilot program allowing private investors to purchase pools of mortgages headed for foreclosure, and charging investors with helping to bring the loans out of default. Servicers can place a mortgage loan into a pool if (i) the borrower is at least 6 months’ delinquent on its mortgage; (ii) the servicer has exhausted all steps in the FHA loss mitigation process; (iii) the servicer has initiated foreclosure proceedings; and (iv) the borrower is not in bankruptcy. Sales are scheduled to begin in September. HUD Release.

State AGs and Federal Regulators Settlement with Mortgage Servicers

On February 9, U.S. Attorney General Eric Holder, HUD Secretary Shaun Donovan and a coalition of forty-nine state attorneys general announced a $25 billion joint federal-state settlement with Bank of America Corporation, JPMorgan Chase & Co., Wells Fargo & Company, Citigroup, Inc., and Ally Financial, Inc. (formerly GMAC) (the nation’s five largest mortgage servicers, controlling approximately 60% of the mortgage servicing market), related to claims of alleged mortgage abuses and fraud, and an agreement related to standards for mortgage servicing in the future. Click here to read more.