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OCC Bulletin 2019-60: Other Real Estate Owned: Final Rule

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Investor Update
November 26, 2019

Source: OCC

Summary

On October 22, 2019, the Office of the Comptroller of the Currency (OCC) published a final rule on other real estate owned (OREO) activities for national banks and federal savings associations. OREO refers to real estate acquired in satisfaction of debts previously contracted and real estate no longer used or planned to be used to conduct banking activities. The final rule is effective January 1, 2020.

Note for Community Banks

The final rule applies to all national banks and federal savings associations.

Highlights

The final rule

  • clarifies and streamlines the OCC’s existing OREO rule for national banks.
  • updates the regulatory framework for OREO activities at federal savings associations.
  • makes technical amendments to the capital rules, including on provisions related to OREO.

Further Information

Please contact Charlotte Bahin, Senior Advisor for Thrift Supervision, at (202) 649-6281; or J. William Binkley, Attorney, or Kevin Korzeniewski, Counsel, Chief Counsel’s Office, at (202) 649-5490.

Jonathan V. Gould
Senior Deputy Comptroller and Chief Counsel

Related Links

HUD: FHA INFO #19-59: 2020 Nationwide Home Equity Conversion Mortgage Limits

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Investor Update
December 3, 2019 

Source: HUD

In this Announcement:
• 2020 Nationwide Forward Mortgage Limits
• 2020 Nationwide Home Equity Conversion Mortgage Limits

Today, the Federal Housing Administration (FHA) published Mortgagee Letter 2019-19, 2020 Nationwide Forward Mortgage Limits, which provides the maximum mortgage limits for FHA-insured Title II forward mortgages. These new loan limits are effective for case numbers assigned on or after January 1, 2020, through December 31, 2020.

This year, the change in the national median home price increased the Federal Housing Finance Agency (FHFA) loan limits. Therefore, FHA’s “floor” and “ceiling” loan limits will increase for Calendar Year (CY) 2020, to $331,760 and $765,6001, respectively, for a one-unit property.

for full announcement, please click the source link above.

FHFA: Non-performing Loan Sales Report

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Investor Update
December 2, 2019

Source: FHFA

Washington, D.C. – The Federal Housing Finance Agency (FHFA) today released the latest report on the sale of non-performing loans (NPLs) by Fannie Mae and Freddie Mac (the Enterprises).  The Enterprise Non-Performing Loan Sales Report includes information about NPLs sold through June 30,2019 and reflects borrower outcomes on NPLs sold through December 31, 2018 and reported through June 30, 2019.  The sale of NPLs reduces the number of delinquent loans in the Enterprises’ portfolios and transfers credit risk to the private sector.  FHFA and the Enterprises impose requirements on NPL buyers designed to achieve more favorable outcomes for borrowers than foreclosure.

This report shows that, through June 30, 2019, the Enterprises sold 117,466 NPLs with a total unpaid principal balance (UPB) of $22.2 billion.  While the Enterprises conducted NPL sales in the first half of 2019, none of the sales settled by the end of the reporting period.

•  NPLs sold had an average delinquency of 3.0 years and an average loan-to-value ratio of 92 percent.

•  NPLs in New Jersey, New York and Florida represented nearly half (45 percent) of the NPLs sold.  These three states accounted for 47 percent of the Enterprises’ loans that were one year or more delinquent as of December 31, 2014, prior to the start of NPL program sales in 2015.

• Fannie Mae sold 78,281 loans and Freddie Mac sold 39,185 loans.

The borrower outcomes in the report are based on 114,745 NPLs that were settled by December 31, 2018 and reported as of June 30,2019.  These outcomes reflect the following:

•  Compared to a benchmark of similarly-delinquent Enterprise NPLs that were not sold, foreclosures avoided for sold NPLs were higher than the benchmark.

•  NPLs on homes occupied by borrowers had the highest rate of foreclosure avoidance outcomes (36.6 percent foreclosure avoided versus 14.9 percent for vacant properties).

•  NPLs on vacant homes had a much higher rate of foreclosure, more than double the foreclosure rate of borrower-occupied properties (73.4 percent foreclosure versus 31.4 percent for borrower occupied properties).  Foreclosures on vacant homes typically improve neighborhood stability and reduce blight as the homes are sold or rented to new occupants.

FHFA will continue to provide reporting on NPL sales borrower outcomes on an ongoing basis.

Link to Non-Performing Loan Sales Report

Link to NPL page on FHFA.gov

Contacts:

Media:   Raffi Williams (202) 649-3544  / Stefanie Johnson (202) 649-3030

Three Unusual Tornadoes Confirmed in Arizona Friday

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Disaster Alert
November 29, 2019

Source: The Weather Channel

Additional Resources:

azcentral.com (3 tornadoes touched down in metro Phoenix on Friday morning, National Weather Service confirms)

FOX 10 Phoenix (NWS confirms tornadoes blew through parts of the Valley)

Approximate locations sustaining home damage

Texas

– Gilbert (Maricopa County, 85295)*
*Tornado touch down in the area of Williams Field Rd. and Highway Loop 202)
– Phoenix (Maricopa County, 85028, 85032))*
*Damage reported in the 30-40th St./E.Shea Blvd. and Roadrunner Park area
– Paradise Valley (Maricopa County, 85253)
– Queen Creek (Maricopa/Pinal counties, 85140, 85142, 85143)

NOTE: This has not yet been declared a FEMA Major Disaster.

At a Glance

  • The National Weather Service confirmed 3 tornadoes developed Friday morning in the Phoenix, Arizona, area.
  • This was the third time three tornadoes occurred on the same day in Maricopa County.
  • The severe weather was due to a powerful low pressure system moving through the West.

Three tornadoes developed in the Phoenix, Arizona, area early Friday as a powerful storm system moved through the West.

This was the third time since 1950 that three tornadoes were observed on the same day in Maricopa County. This is also the latest in the year that multiple tornadoes have occurred in Maricopa County, according to the National Weather Service.

Tornado warnings were issued early Friday morning and the first tornado developed just before 4 a.m. MST in Paradise Valley. This tornado tracked into northwest Scottsdale and has been rated EF1. Numerous trees were downed and roofs were damaged.
A second tornado formed near Higley and has been rated EF0. Small trees were damaged.

The third tornado was in the Queen Creek area just before 5 a.m. MST and has also been given a rating of EF0.

For full report, please click the source link above.

High Winds Become Catalyst for Oklahoma Wildfire Outbreak

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Updated 11/27/19: KSN.com published a report offering an update on a rash of wildfires that broke out across Oklahoma and have destroyed at least two homes.

Oklahoma wildfire danger eases with weather shift

Disaster Alert
November 26, 2019

Source: KOCO ABC 5

Approximate locations sustaining home damage

Oklahoma

– Fargo (Ellis County, 73840)
– Mooreland (Woodward County, 73852)

NOTE: This has not yet been declared a FEMA Major Disaster.

MOORELAND, Okla. — Parts of towns in northwestern Oklahoma had to be evacuated Tuesday afternoon after dangerous wildfires sparked and spread quickly because of high winds.

Shortly before 2:30 p.m. Tuesday, a dangerous wildfire was located just southwest of Mooreland. Authorities said the flames are moving rapidly northeast. Evacuation instructions were sent out, but the order has since been lifted in Mooreland.

Authorities said the wildfire threatened about 100 homes, and police said the fire burned two houses and a barn. A senior living center in Mooreland also had to be evacuated. Woodward Public Schools officials said employees drove two school buses to the nursing home to help in the evacuation.

The Mooreland police chief told KOCO 5 that all fire and police units have been released from the fire scene and they are gong to let the rest burn itself out.

Around 4:20 p.m., a dangerous wildfire was located just northwest of Fargo and moving rapidly toward the southeast, officials said. Evacuation orders were issued shortly afterward. They have since been lifted.

Chemical Plant Explosion Causes Extensive Damage to Texas City

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Disaster Alert
November 27, 2019

Source: CNN

Approximate locations containing home damage:

Texas
– Port Neches (Jefferson County, 77651)

NOTE: This has not yet been declared a FEMA Major Disaster.

(CNN) — An explosion rocked a chemical plant early Wednesday in Texas, causing extensive damage across the small city of Port Neches and leaving at least three employees injured.

A chemical fire continues to burn at the site, and a mandatory evacuation order has been issued within a half mile of the TPC Group plant, about 90 miles east of Houston, the Nederland Volunteer Fire Department said.

“There’s extensive damage throughout the City,” Port Neches Police Department said in a statement. “Please stay off the roads anywhere near the refineries. Obey all the barricades that are in place. We are doing everything we can to keep everyone safe and informed.”

Personnel have been evacuated from the plant, which makes products for chemical and petroleum companies, said TPC Group, which runs the Port Neches Operations site. About 13,000 people live in Port Neches, and some said their home windows were blown out by the blast.

The fire is burning a chemical called butadiene, police said. A colorless gas, butadiene is considered a health hazard, according to the US National Library of Medicine. It is made from processing petroleum and is used to make synthetic rubber and plastics.

“Our focus is on protecting the safety of responders and the public, and minimizing any impact to the environment,” TPC Group said.

The injured employees are undergoing treatment, the company said.

For full report, please click the source link above.

Tropical Storm Kammuri Impacts Guam

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Disaster Alert
November 26, 2019

Source: Pacific Daily News

Approximate areas experiencing power outages:

Guam

– Dededo (96912, 96929)
– Harmon (96913)
– Tumon (96913)
– Yigo (96929)
– Yona (96915)

NOTE: This has not yet been declared a FEMA Major Disaster.

Gusty winds and scattered power outages were reported across Guam Tuesday night as Tropical Storm Kammuri moved south of the island.

Schools will be closed Wednesday, and forecasters warned that rainfall of 4 to 5 inches, hazardous seas and deadly rip currents are possible through Wednesday morning.

Power outages reported

Power was out in Tumon, Harmon, and isolated parts of Dededo, Yigo and Yona, according to Guam Power Authority spokesman Art Perez. Perez said field crews were responding, but they were reporting high winds.

Although circuits were restored in Tumon and Harmon, there were pocket areas of Tumon Heights, and isolated areas of Maite, Yona, Yigo and Dededo without power. Outages in Ipan, Talofofo, toward Bear Rock in Inarajan were also reported, Perez said.

For full report, please click the source link above.

‘Bomb Cyclone’ Expected to Strike West Coast

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Disaster Alert
November 26, 2019

Source: The Weather Channel

At a Glance

  • A powerful storm will move into southern Oregon and Northern California on Tuesday.
  • This storm will be a bomb cyclone when it hits southern Oregon later Tuesday.
  • The storm will then move slowly through the West into late this week with snow, rain and gusty winds.
  • Snow and wind from this storm will move into the Northern Plains and upper Midwest late this week into the weekend.
  • Wintry weather could push into parts of the Northeast over the weekend.

Snow, rain and strong winds will make travel conditions difficult in parts of the West this week from an powerful storm that will slowly spread toward the central and eastern United States into this weekend.

The intensifying storm is located in the northeastern Pacific Ocean and will move into Oregon and Northern California on Tuesday. This storm will undergo bombogenesis before it moves inland. This means it will be a bomb cyclone since its pressure will drop at least 24 millibars within 24 hours, making it an intense storm when it strikes.

From there, the storm will track slowly eastward from the West toward the central and eastern states into this weekend through a sharp southward plunge of the jet stream.

The Weather Channel has named this system Winter Storm Ezekiel.

Forecast Timing

Tuesday-Tuesday Night

The powerful area of low pressure will push inland near the border between Oregon and California by late in the day.

The intensity of this storm is potentially historic for southwestern Oregon and northwestern California, the National Weather Service said.

Strong winds gusting over 70 mph will punch into southwestern Oregon and northwestern California. The winds could cause tree damage and power outages in some areas.

For full report, please click the source link above.

Cave Fire Ignites in California

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Updated 11/27/19: KSBY NBC 6 issued a report offering the latest updates on California’s Cave fire, which has consumed 4,367 acres in Santa Barbara County.

UPDATE: All Cave Fire-related evacuation orders and warnings lifted

Disaster Alert
November 25, 2019

Source: Los Angeles Times

Approximate locations in current event path*

California

Santa Barbara (Santa Barbara County, 93101, 93103, 93105, 93108, 93109, 93110, 93111, 93117)
Goleta (Santa Barbara County, 93110, 93111, 93117)

*Home damage has not been reported at this time.

NOTE: This has not yet been declared a FEMA Major Disaster.

SANTA BARBARA — Firefighters early Tuesday continued to battle a wind-driven brush fire that erupted a day earlier near Highway 154 in Santa Barbara County and burned quickly downhill, threatening thousands of properties and sending residents fleeing from their homes.

The Cave fire started just after 4 p.m. Monday near East Camino Cielo and Painted Cave Road in Los Padres National Forest and has exploded to 3,800 acres with no containment, according to the Santa Barbara County Fire Department. The blaze, fanned by strong sundowner winds, grew overnight and was advancing toward populated areas in the cities of Santa Barbara and Goleta as well as unincorporated areas of the county.

The fire prompted Santa Barbara County officials to declare a local emergency and request that Gov. Gavin Newsom proclaim a state of emergency for the region. The fire is “causing conditions of extreme peril to the safety of persons and property within Santa Barbara County,” the county wrote.

Within three hours of starting, the fire had traveled to the top of Cieneguitas Road near the San Marcos Foothills Preserve. The blaze initially moved into a few canyons and rapidly expanded as it was pushed south by 15 mph down-canyon winds with 30 mph gusts. By 7:30 p.m., the fire was spotting in front of itself and had started at least one spot fire near Highway 154 and Cathedral Oaks Road, said Mike Eliason, a public information officer with the Santa Barbara County Fire Department.

For full report, please click the source link above.

Federal Reserve Bank of Atlanta: Foreclosure Externalities and Vacant Property Registration Ordinances

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Industry Update
November 19, 2019

Source: Federal Reserve Bank of Atlanta

Additional Resource:

Foreclosure Externalities and Vacant Property Registration Ordinances (full white paper)

This paper tests the effectiveness of vacant property registration ordinances (VPROs) in reducing negative externalities from foreclosures. VPROs were widely adopted by local governments across the United States during the foreclosure crisis and facilitated the monitoring and enforcement of existing property maintenance laws. We implement a border discontinuity design combined with a triple-difference specification to overcome policy endogeneity concerns, and we find that the enactment of VPROs in Florida more than halved the negative externality from foreclosure. This finding is robust to a rich set of time-by-location fixed effects, limiting the sample to properties within 0.1 miles of a VPRO/non-VPRO border and to a number of other sample restrictions and falsification exercises. The results suggest that an important driver of the negative price effect of nearby foreclosures is a non-pecuniary externality where the failure to maintain or secure a property affects one’s neighbors.