Residential mortgage loan servicers, trade associations and various members of Congress have been urging the Department of Treasury and the Federal Reserve Board to provide a dedicated servicing advance facility. On April 10, 2020, Ginnie Mae did just that, announcing the terms of its much-anticipated Pass-Through Assist Program for Issuers of mortgage-backed securities that are
Federal Reserve’s Updated TALF Program Excludes Support for Mortgage Servicing Advance Financing
As the residential mortgage community is aware, loan servicers are facing significant financial burdens from the servicing advance obligations associated with the loan forbearance mandates of the CARES Act. Over the past few days, there has been considerable reporting and reaction to the statements by the Director of the Federal Housing Finance Agency that Fannie Mae and Freddie Mac will not provide financial assistance to servicers facing these burdens. On the heels of those statements, the Federal Reserve has unfortunately eliminated another potential source of support for those servicers.
Continue Reading Federal Reserve’s Updated TALF Program Excludes Support for Mortgage Servicing Advance Financing
Conference Call on COVID-19 Guidance from the GSEs and Federal Agencies
On Monday, March 30, 2020, from 4:00 p.m. – 4:30 p.m. EDT, Mayer Brown partners Holly Spencer Bunting and Krista Cooley will discuss actions taken in response to the COVID-19 pandemic by the Federal Housing Administration, the Federal Housing Finance Agency, Fannie Mae and Freddie Mac. This call is a part of Mayer Brown’s Global
Conference Call on COVID-19 Federal Legislation and Impact on Home Loan Forbearance and Loss Mitigation
On Thursday, March 26, 2020, from 3:00 p.m. – 3:30 p.m. EDT, Larry Platt will discuss the provisions of recent federal legislation that impact residential mortgage loans. This call is a part of Mayer Brown’s Global Financial Markets Teleconference Series.
Congress’s response to the COVID-19 pandemic is expansive legislation that provides support to federal agencies,
Mayer Brown’s Bunting and Kully Leaders in Women in Housing and Finance
Holly Spencer Bunting, a partner in Mayer Brown’s Financial Services Regulatory and Enforcement (FSRE) group will be honored tonight by the Women in Housing and Finance (WHF) as a 40 Under 40 honoree.
WHF is a Washington, DC-based premier, nonpartisan association that focuses on promoting women professionals in the fields of housing and financial
Mayer Brown Partners Speaking at IMN’s Residential MSR forum
Mayer Brown Partners Paul Jorissen and Lauren Pryor will speak at the 6th Annual Residential Mortgage Servicing Rights Forum being held April 15-16, 2019 in New York City. This conference explores the key industry issues, including the origination trends, views from the regulators, and more.
Paul Jorissen will moderate the panel on “Financing in the
Freddie Mac’s Investor Reporting Changes
Freddie Mac is an outlier among the three primary secondary market investors with its mid-month investor reporting cycle. In an effort to standardize the marketplace, Freddie Mac is joining Fannie Mae and Ginnie Mae by shifting its investor reporting cycle to the beginning of each month. In this regard, Freddie Mac is implementing the following changes: (i) the investor reporting cycle will run from the first day of each calendar month to the last day of such month; (ii) Freddie Mac is encouraging daily loan-level reporting, with reporting of at least one loan level-transaction detailing activity submitted no later than the 15th calendar day of each month (or next business day) (the “P&I Determination Date”); (iii) servicers will report the actual principal received and the forecasted scheduled interest based on unpaid principal balance reported at the end of the current one-month period; (iv) Freddie Mac will draft principal and interest from the servicer’s custodial account two business days after the P&I Determination Date; (v) on the fifth business day following a payoff, Freddie Mac will draft payoff proceeds, provided such payoff was reported within two business days of the payoff date, subject to certain requirements; and (vi) Freddie Mac will process and settle loan modifications on a daily basis.
Freddie Mac has released several bulletins outlining the transition (2016-15, 2017-4, 2017-15, and 2018-14), summarized in the following timeline:Continue Reading Freddie Mac’s Investor Reporting Changes
MBA Issues Proposal on GSE Reform
On the theory that Fannie Mae and Freddie Mac cannot remain in conservatorship forever, on April 20, 2017, the Mortgage Bankers Association (MBA) issued a proposal for reform of Fannie Mae and Freddie Mac, titled “GSE Reform: Creating a Sustainable, More Vibrant, Secondary Mortgage Market” (accessible at the MBA’s GSE Reform web page). While the ultimate fate of any GSE reform effort in the current political environment is uncertain, there is at least a consensus that the Congress and the Trump administration should undertake such an effort, and each has promised to do so. The MBA’s proposal is intended to provide a voice for the mortgage banking industry in that process.
The proposal includes a mixture of changes to the GSE system as it exists today, and maintenance of existing processes and structures the MBA believes work well. It proposes a replacement or conversion of the GSEs with “Guarantors,” which would guaranty mortgage backed securities (MBS). The Guarantors would be structured as “private utilities”, meaning that they would be privately owned, but established through a government charter for the primary or exclusive purpose of providing the MBS guaranty, and heavily regulated. Think of a privately owned electric company, that is granted the right to participate in the electricity market, on the condition that it complies with various regulatory requirements and oversight, including rate approvals. The proposal even quotes from a paper regarding investor-owned electrical utilities. The expectation, as stated in the proposal, is that the Guarantors would be “low-volatility companies that would pay steady dividends over time, not growth companies that aggressively seek to expand market share or generate above-market returns.” Guarantors’ MBS guaranty would then be supplemented with an explicit government guaranty of the MBS, which would only be used if a Guarantor failed, and would only be used to support the MBS, not the Guarantors and their private investors.
The following is an outline of key elements of the MBA’s proposal, divided into elements reflecting changes to the current system, and those reflecting continuation of the current system in a similar form.
Continue Reading MBA Issues Proposal on GSE Reform