On January 3, Fannie Mae announced that it will start to disclose loan-level data for its newly-issued Single-Family MBS in the first quarter of 2012. The initial release will provide at issuance loan-level data and subsequent releases will aim to include additional data elements and monthly updates to loan-level data. Fannie Mae Release.
Fannie Mae
FHFA Retains Maximum Conforming Loan Limits
On November 22, the FHFA announced that the maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac in 2012 will remain at existing levels (which were decreased in October) except in Fairfield County, Connecticut, where the loan limit will increase. FHFA Release.
FHFA Response to Senators’ Letter on Executive Compensation
On November 10, the FHFA responded to a letter from numerous Senators on executive compensation at Fannie Mae and Freddie Mac. FHFA Letter.
Freddie and Fannie Foreclosure Attorney Networks
On October 18, the FHFA directed Fannie Mae and Freddie Mac to adopt a system for foreclosure attorneys where mortgage servicers select qualified law firms that meet certain minimum, uniform criteria. The changes will be implemented after a transition period during which input will be taken by the FHFA from servicers, regulators, lawyers, and other market participants. FHFA Release.
House Committee Investigates Cost of Federal Housing Finance Agency RMBS Lawsuits
The House Committee on Oversight and Government Reform, as part of its ongoing monitoring of the Federal Housing Finance Agency (“FHFA”), is investigating the cost to the government of numerous lawsuits against financial institutions brought on behalf of Fannie Mae and Freddie Mac by Quinn Emanuel and Kasowitz Benson. In a September 29, 2011 letter to the Acting Director of the FHFA, Rep. Darrell Issa (R-Cal.), Chairman of the committee, requested detailed information about the FHFA’s decision-making process in selecting counsel, the terms of the representation agreements with each firm, the expected value of the lawsuits, and the expected cost of the representations. Rep. Issa requested an explanation of the FHFA’s decision to use private law firms instead of government lawyers and also requested copies of all RMBS-related communications between the FHFA and the Department of Justice or other government agencies. Rep. Issa asked the FHFA to respond by October 13. Letter.
FHFA Sues 17 Banks For More Than $200 Billion In MBS Losses
On September 2, 2011, the Federal Housing Finance Agency (“FHFA”) – the federal agency overseeing Fannie Mae and Freddie Mac – filed suit against 17 major banking institutions in New York and Connecticut courts. The suits claim that the banks misrepresented the quality of the mortgage loans backing securitizations purchased by Fannie Mae and Freddie Mac, and bring claims under Sections 11, 12, and 15 of the Securities Act of 1933. Complaints.
More Entities Intervene and Demand Information Regarding Bank of America’s Proposed $8.5 Billion Settlement
Two additional entities have formally objected to the proposed Bank of America settlement. The Federal Deposit Insurance Corp. (“FDIC”) filed an objection on August 29, 2011. The Federal Housing Finance Agency (“FHFA”), in its capacity as conservator of Fannie Mae and Freddie Mac, filed an objection on August 30, 2011. Both seek further information regarding the proposed settlement in order to determine whether or not the settlement is fair. Additional objections are unlikely as August 30, 2011 was the deadline to intervene in the action. FHFA Objection. FDIC Objection.
FHFA, Treasury, and HUD Request for Input on Disposition of REO Properties
FHFA Sues UBS For Misrepresenting RMBS Risk
On July 27, 2011, Fannie Mae and Freddie Mac’s regulator, the Federal Housing Finance Agency, sued UBS and several of its executives in New York federal court under Sections 11, 12(a)(2), and 15 of the Securities Act of 1933. The complaint alleges that between September 2005 and August 2007, Fannie Mae and Freddie Mac purchased over $4.5 billion in RMBS from UBS in connection with 16 different securitizations. Plaintiff claims that the RMBS registration statements, which contained loan and origination information, contained materially false statements regarding the quality of the mortgages in the securitizations, and the complaint focuses specifically on alleged borrower fraud and faulty underwriting practices. Complaint.
New Fannie Mae Servicing Standards
On June 6, Fannie Mae issued new standards for mortgage servicers under the FHFA’s Servicing Alignment Initiative relating to: (i) management of delinquent loans; (ii) default prevention; and (iii) foreclosure time frames. These standards are reinforced by new incentives and compensatory fees. Fannie Mae Release. Delinquency Management and Default Prevention Announcement. Foreclosure Time Frames and Compensatory Fee Announcement.