SIFMA Sends Comment Letters to FHFA on Credit Risk Transfer


SIFMA, along with the Association of Mortgage Investors and the National Association of Real Estate Investment Trusts, and separately along with the ABA, AMI, HPC, MBA, and SFIG, submitted comment letters to the FHFA in response to the FHFA request for comments on the GSEs credit risk transfer programs, particularly with respect to exploration of more “front end” risk transfer options that share risk with the private sector before, or concurrently with, the purchase of loans by the GSEs. SIFMA, AMI, NAREIT Comment Letter Joint Trades Comment Letter.

FHFA Further Adjusts Multifamily Lending Caps for Fannie Mae and Freddie Mac


On August 18, 2016, the Federal Housing Finance Agency (“FHFA”) announced an additional increase to the 2016 multifamily lending caps for both Fannie Mae and Freddie Mac. The caps for both Fannie Mae and Freddie Mac were raised from $35 billion to $36.5 billion, effective immediately. Press release.

Attorneys General Complaint on Mortgage Practices

On March 12, a complaint was filed in the U.S. district court for the District of Columbia by the DOJ and the attorneys general of 49 states and the District of Columbia against Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, and Ally.  The complaint, which was filed as part of the $25 billion mortgage servicing and foreclosure settlement entered into on February 9, contains allegations of: (i) unfair and deceptive loan servicing consumer practices; (ii) unfair and deceptive foreclosure processing consumer practices; (iii) unfair and deceptive loan origination consumer practices; (iv) violations of the False Claims Act; (v) violation of FIRREA; (vi) violation of the Servicemembers Civil Relief Act; and (vii) bankruptcy misconduct.  Consent judgments implementing the terms of the February 9 settlement agreement were also filed in the U.S. district court in Washington, D.C.  Complaints and Settlements.  Orrick Alert on the February 9 Settlement.

FHA Price Cuts to the Streamline Refinance Program

On March 6, the FHA announced price cuts to the Streamline Refinance Program.  Beginning June 11, the FHA will lower its Upfront Mortgage Insurance Premium to 0.01% and reduce its annual premium to 0.55% for certain FHA borrowers.  To qualify, borrowers must be current on their existing FHA-insured mortgages which were endorsed on or before May 31, 2009.  FHA Release.

Administration Support for Homeowners

On March 6, President Obama announced two steps to support homeowners: (i) the nation’s five largest servicers have agreed to provide relief for servicemembers and veterans, including those wrongfully foreclosed upon or denied a lower interest rate on their mortgages and (ii) a reduction of fees for FHA borrowers looking to refinance under the Streamline Refinance Program.  Fact Sheet.

Rating Agency Developments

On March 1, S&P requested comments by March 30 on rating methodology and assumptions for derivative product companiesS&P Request for Comment.

On February 28, Fitch updated its U.S. municipal structured finance criteria.  Fitch Report.

On February 27, S&P released FAQs on its revised principal stability fund / money market fund criteria.  S&P FAQs.

On February 27, Fitch published criteria on U.S. mortgage REITs and similar finance companies.  Fitch Report.

On February 27, Fitch published criteria on U.S. equity REITs and REOCs (real estate operating companies). 
Fitch Report.

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Action Plans for Residential Mortgage Servicing and Foreclosure Deficiencies

On February 27, the Fed released action plans from Bank of America, Citigroup, EverBank, JPMorgan Chase, MetLife, PNC, SunTrust, US Bancorp, and Wells Fargo to correct deficiencies in residential mortgage loan servicing and foreclosure processing.  The action plans are required by prior Fed enforcement actions that direct regulated mortgage loan servicers to submit acceptable plans that, among other things: (i) describe how communications with borrowers will be strengthened; (ii) establish limits on foreclosures where loan modifications have been approved; (iii) establish third-party vendor controls; and (iv) strengthen compliance programs.  The enforcement actions also require the parent holding companies of servicers to submit plans to describe how the companies will improve servicing and foreclosure oversight.  The Fed also released engagement letters between supervised financial institutions and independent consultants retained to review foreclosures in 2009 and 2010.  Fed Release.  Action Plans and Engagement Letters.

Extension of Deadline for Independent Foreclosure Review

On February 15, the Fed and OCC announced that the deadline for submitting requests for Independent Foreclosure Review has been extended to July 31. Borrowers are eligible to request an Independent Foreclosure Review if: (i) the mortgage loan was serviced by one of the participating mortgage servicers, which include the 14 large servicers subject to the April 2011 enforcement actions; (ii) the mortgage loan was active in the foreclosure process during 2009 or 2010; and (iii) the property securing the mortgage loan is the borrower’s primary residence. Fed Release.

Syncora Sues JP Morgan For Losses From Insuring RMBS

On February 14, 2012, Syncora Guarantee filed a complaint in New York state court against JP Morgan, Bear Stearns, and EMC Mortgage alleging $52 million in losses incurred by the insurance company as a result of its insuring RMBS issued by the defendants. Syncora alleges that the defendants misrepresented not only the quality of the home-equity line of credit residential mortgages underlying the RMBS, but also the quality of their due diligence processes during the securitization. Syncora brings claims for breach of contract and common-law fraudulent inducement. Complaint.