On February 14, Judge Denise Cote of the United States District Court for the Southern District of New York denied Bank of America’s request to reconsider the court’s earlier order disallowing use of documents produced by plaintiff Federal Housing Finance Agency in a case against Countrywide pending in California. The court found that the parties had obtained sufficient documents to litigate the claims and defenses at issue and that allowing a party to use documents from other litigation in motion practice or at trial would undermine the discovery procedures established by the Court. Order.
FHFA
Delay of Fannie and Freddie Guarantee Fee Changes
On January 8, the FHFA announced that it has directed Fannie Mae and Freddie Mac to delay the implementation of the increases to the guarantee fees that were originally to be effective in March and April 2014. FHFA Release.
FHFA and Deutsche Bank Reach RMBS Settlement
On December 20, the Federal Housing Finance Agency announced it had reached a settlement for $1.925 billion with Deutsche Bank AG to resolve claims pending in the United States District Court for the Southern District of New York related to the sale of private-label RMBS between 2005 and 2007. The FHFA asserted claims for violations of federal and state securities laws on the basis of allegedly false and misleading statements and omissions in the registration statements and prospectuses of securities sold to Freddie Mac and Fannie Mae. Press Release.
FHFA Releases 2013 Performance and Accountability Report
FHFA Increase of Guarantee Fees
On December 9, the FHFA, in connection with its fulfillment of the ‘Strategic Plan for Enterprise Conservatorships,’ directed Fannie Mae and Freddie Mac to raise their guarantee fees in three separate components: (i) increase the base (or ongoing) fee by 10 basis points; (ii) update the upfront grid to better align pricing with the credit risk characteristics of the borrower; and (iii) eliminate the upfront 25 basis point adverse market fee except in the four states where foreclosure carrying costs are more than two standard deviations greater than the national average. For loans exchanged for MBS, the price changes will be effective starting April 1, 2014. For loans sold for cash, the price changes will be effective starting March 1, 2014. FHFA Release.
Final Rules on Appraisal Exemptions for Higher-Priced Mortgages
On December 12, the Fed, FDIC, CFPB, FHFA, NCUA and OCC issued a final rule that creates exemptions from certain appraisal requirements for certain higher-priced mortgage loans. The final rule provides that loans of $25,000 or less and certain “streamlined” refinancings are exempt from the Dodd-Frank Act appraisal requirements, which go into effect on January 18, 2014. Joint Release. Joint Final Rule.
FHFA Announces Fannie Mae and Freddie Mac Conforming Loan Limits for 2014
On November 26, the FHFA announced that the 2014 maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac will remain at the existing levels in most areas. Press Release.
FHFA Announces Changes to Fannie Mae and Freddie Mac Mortgage Insurance Master Policy Requirements
On December 2, the FHFA announced that Fannie Mae and Freddie Mac have completed the first major overhaul of mortgage insurance master policy requirements. Fannie Mae and Freddie Mac, with FHFA oversight, addressed gaps in the existing master policy framework, focusing on loss migration, establishing timeframes for claim processing, setting standards for determining when coverage must be maintained or could be revoked, and promoting information sharing. Press Release.
FHFA Notice on Lender-Placed Insurance Practices
On November 5, the FHFA directed Fannie Mae and Freddie Mac to prohibit servicers from being reimbursed for expenses associated with captive reinsurance arrangements. FHFA Release.
JPMorgan Settles FHFA’s $33 Billion RMBS Suit
On October 25, the FHFA announced that JPMorgan had agreed to pay it $5.1 billion to settle a number of RMBS-related claims asserted by the FHFA, including in a lawsuit relating to Fannie Mae’s and Freddie Mac’s alleged purchase of $33 billion of RMBS. Under the settlement agreement, JPMorgan will pay a total of $2.74 billion to Freddie Mac and $1.26 billion to Fannie Mae to resolve the claims asserted in the lawsuit that JPMorgan made misrepresentations in the offering documents for the RMBS it sold to those mortgage companies. JPMorgan also will pay $670 million to Fannie Mae and $480 million to Freddie Mac to resolve separate claims related to single-family mortgages purchased by those entities. The FHFA alleged that JPMorgan breached representations and warranties in the contracts concerning those loan sales. Settlement Agreement and attachments.