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Senate Banking Committee Chairman Holds Federal Housing Finance Agency Hearing

Posted on September 13, 2018 by Safeguard

On November 19, the U.S. Committee on Banking published a news release featuring Chairman Tim Johnson’s prepared statement at The Federal Housing Finance Agency: Balancing Stability, Growth, and Affordability in the Mortgage Market oversight hearing.

JOHNSON HOLDS FHFA OVERSIGHT HEARING

WASHINGTON – Today, Senate Banking Committee Chairman Tim Johnson (D-SD) held a Federal Housing Finance Agency (FHFA) hearing titled “The Federal Housing Finance Agency: Balancing Stability, Growth, and Affordability in the Mortgage Market.”

Below is Chairman Johnson’s statement as prepared for delivery:

“I call this hearing to order. Welcome back to the Committee, Director Watt. Since this is likely my last hearing regarding the GSEs, I would like to urge my colleagues to continue our hard work to move past the housing crisis. Over the past few years, we and our staffs have spent countless hours wrestling with possible solutions and pitfalls. Some options are not practical while others are too ideological, but we still need to find a solution.

“The Enterprises remain trapped in conservatorship today. FHFA continues to perform the dual role of both regulating and running the businesses of the largest entities in the mortgage market. This is not sustainable, and there is no consensus in Congress regarding how to move forward.

“All the while the credit box remains extremely narrow, locking out many potential borrowers with good credit, including first-time homebuyers who are needed to expand and sustain our recovery. While I oppose returning to exotic products with confusing terms, we need to find a way to bring the pendulum back to rational underwriting. Unfortunately, the tight credit conditions will remain a challenge while the future structure of the mortgage market is uncertain.

“FHFA, under Director Watt’s guidance, is taking steps to provide more certainty to the market and expand access for borrowers. These initiatives include expanding the loan-to-value requirements from 95 LTV to 97 LTV, updating reps-and-warrants frameworks, and developing Neighborhood Stabilization Initiative pilot programs in Detroit and Chicago.

“I applaud Director Watt and his team at FHFA for taking steps to stabilize the Enterprises and the housing market. Focusing the common securitization platform on the Enterprises, exploring a single security to increase liquidity, and developing stronger counterparty oversight are all efforts that will help stabilize the market for the future. However, there is only so much that can be accomplished while the Enterprises are in limbo.

“Everyone agrees that conservatorship cannot continue forever, so I hope my colleagues will keep working towards a more certain future for the housing market. However, if Congress cannot agree on a smooth, more certain path forward, I urge you, Director Watt, to engage the Treasury Department in talks to end the conservatorship.

“Before I finish, I want to thank my colleagues on this Committee, as well as their staffs and my staff, for all their hard work on housing finance reform. I especially want to thank Ranking Member Crapo and his staff for their faithful partnership.”

Please click here to view the news release online.

About Safeguard
Safeguard Properties is the largest mortgage field services company in the U.S. Founded in 1990 by Robert Klein and based in Valley View, Ohio, the company inspects and maintains defaulted and foreclosed properties for mortgage servicers, lenders, and other financial institutions. Safeguard employs approximately 1,700 people, in addition to a network of thousands of contractors nationally.
Website: www.safeguardproperties.com.

MHA Update: SD 14-05 MHA Program Updates

Posted on September 13, 2018 by Safeguard

On November 26, Making Home Affordable (MHA) released an update titled Supplemental Directive 14-05: Making Home Affordable Program-MHA Program Updates.

Supplemental Directive 14-05

Making Home Affordable? Program – MHA Program Updates

In February 2009, the Obama Administration introduced the Making Home Affordable (MHA)
Program to stabilize the housing market and help struggling homeowners obtain relief and avoid
foreclosure. In March 2009, the U.S. Department of the Treasury (Treasury) issued uniform
guidance for loan modifications by participants in MHA across the mortgage industry and
subsequently updated and expanded that guidance. On March 3, 2014, Treasury issued version
4.4 of the Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages
(Handbook), a consolidated resource for guidance related to the MHA Program for mortgage
loans that are not owned or guaranteed by Fannie Mae or Freddie Mac (Non-GSE Mortgages).

This Supplemental Directive provides program updates to the Home Affordable Modification
Program® (HAMP), Treasury Federal Housing Administration HAMP (Treasury FHA-HAMP)
and Rural Development HAMP (RD-HAMP). Servicers that are subject to the terms of a
servicer participation agreement and related documents (SPA) must follow the guidance set forth
in this Supplemental Directive. This Supplemental Directive amends and supersedes the notated
portions of the Handbook and, except as stated herein, the guidance set forth in this
Supplemental Directive is effective April 1, 2015.

This guidance does not apply to mortgage loans that are owned or guaranteed by Fannie Mae or
Freddie Mac (each, a GSE), insured or guaranteed by the Department of Veterans Affairs, and
except as noted herein, insured or guaranteed by the Department of Agriculture’s Rural Housing
Service or the Federal Housing Administration.

This Supplemental Directive covers the following topics:

Enhancement of Borrower “Pay for Performance” Incentives under HAMP, Treasury
FHA-HAMP and RD-HAMP
Recast of Loans Modified Under HAMP

Please click here to view the update in its entirety.

MHA Supplemental Directive 14-04 Making Home Affordable Program-Program Updates

Posted on September 13, 2018 by Safeguard

On October 30, Making Home Affordable (MHA) issued an update titled Supplemental Directive 14-04: Making Home Affordable-Program Updates.

MHA UPDATE

Supplemental Directive 14-04: Making Home Affordable Program – Program Updates

Today, October 30, 2014, Supplemental Directive 14-04: Making Home Affordable Program – Program Updates was issued, providing updates and administrative clarifications on the following topics as they relate to the Home Affordable Modification Program® (HAMP) and the Home Affordable Foreclosure Alternatives® (HAFA) Program:

HAMP Tier 2 Interest Rate Adjustment
HAFA® Relocation Assistance
HAFA Investor Reimbursement of Subordinate Lien Releases
HAFA Reporting

This SD amends and supersedes the notated portions of the Handbook and, as stated therein, is effective January 1, 2015 and February 1, 2015.

This guidance does not apply to mortgage loans that are owned or guaranteed by Fannie Mae or Freddie Mac (each, a GSE), insured or guaranteed by the Department of Veterans Affairs, the Department of Agriculture’s Rural Housing Service or the Federal Housing Administration.

Read SD 14-04 in its entirety for more information.

As a reminder, due to system maintenance, HMPadmin.com will be unavailable to servicers from 8:00 a.m. ET Saturday, November 1 through 8:00 a.m. ET Monday, November 3. It is recommended that servicers download and save SD 14-04 before that time if this document is needed over the weekend. SD 14-04 will be available once maintenance is completed by 8:00 a.m. Monday, November 3.

Questions?
Email4 the HAMP Solution Center or call 1-866-939-4469.

Please click here to view the update online.

MHA HAMP Reporting Update October 2014 UP Survey Reminder

Posted on September 13, 2018September 13, 2018 by Safeguard

On November 10, Making Home Affordable (MHA) released a HAMP Reporting Update, subtitled October 2014 UP Survey Reminder.

HAMP REPORTING UPDATE

October 2014 UP Survey Reminder

The October 2014 Home Affordable Unemployment Program (UP) survey will be available on HMPadmin.com (login required) beginning Monday, November 17, 2014. Servicers that have executed a Servicer Participation Agreement (SPA) and have cumulative UP forbearance activity must complete and upload their UP survey response to the HAMP Reporting Tool by Monday, November 24, 2014.

SPA servicers that have any cumulative UP forbearance activity as of October 31, 2014 should submit an UP survey by November 24, 2014.

For details on downloading and submitting the UP survey response, log in to HMPadmin.com, navigate to the HAMP Loan Reporting Tools & Documents area, and select the UP Survey tab.

Questions?
For more information, email the HAMP Solution Center or call 1-866-939-4469. For questions specifically regarding the survey contents, email the HAMP Servicer Survey team.

Please click here to view the update online.

MHA HAMP Reporting Update October 2014 UP Survey Now Available

Posted on September 13, 2018September 13, 2018 by Safeguard

On November 17, Making Home Affordable (MHA) released a HAMP Reporting Update, subtitled October 2014 UP Survey Now Available.

HAMP REPORTING UPDATE

October 2014 UP Survey Now Available

The October 2014 UP survey is now available on HMPadmin.com (login required). Servicers that have executed a Servicer Participation Agreement (SPA) and that have cumulative UP activity must complete and upload their UP survey response to the HAMP Reporting Tool (login required) by Monday, November 24, 2014.

SPA servicers that have any cumulative UP activity as of October 31, 2014 must submit an UP survey at this time.

For details on downloading and submitting the UP survey response, log in to HMPadmin.com, navigate to the HAMP Loan Reporting Tools & Documents area, and select the UP Survey tab.

Questions?
For more information, email the HAMP Solution Center or call 1-866-939-4469.

For questions specifically regarding the survey contents, email the HAMP Servicer Survey team.

Please click here to view the update online.

MHA HAMP Reporting Update Beta Schema Files and Updated Compensation Matrix Available on HMPadmin.com

Posted on September 13, 2018September 13, 2018 by Safeguard

On November 3, Making Home Affordable (MHA) released a HAMP Reporting Update, subtitled Beta Schema Files and Updated Compensation Matrix Available on HMPadmin.com.

HAMP REPORTING UPDATE

Beta Schema Files and Updated Compensation Matrix Available on HMPadmin.com

The following beta versions of the February 2, 2015 Release schemas are available in the File Formats and Interfaces section on HMPadmin.com (login required).

The MHA Compensation Matrix has been updated. Please refer to this document for a summary of servicer, investor, and borrower compensation by program.

Questions?
Email the HAMP Solution Center or call 1-866-939-4469.

Please click here to view the update online.

Lawmakers Pressure Agency to ‘Reconsider’ FHLB Membership Changes

Posted on September 13, 2018September 13, 2018 by Safeguard

On November 19, National Mortgage News published an article discussing the resistance being met by members of Congress and banks towards the Federal Housing Finance Agency ‘s plan to to tighten membership rules for the Federal Home Loan Banks.

Lawmakers Pressure Agency to ‘Reconsider’ FHLB Membership Changes

WASHINGTON — The Federal Housing Finance Agency has stirred up by a hornet’s nest by proposing to tighten membership rules for the Federal Home Loan Banks.

More than 60 members of Congress joined banks and credit union trade groups this week in urging the agency to modify its plan to require members of the 12 regional Home Loan Banks to hold a certain percentage of mortgages on their books. Currently, there is no such holding requirement.

“The proposed rule includes significant changes to the long-standing membership rules for the FHLB System and is likely to have a profound adverse impact on the existing and prospective members and on the communities served by the system,” according to the letter that was signed by 68 lawmakers, including Reps. Spencer Bachus, R-Ala., and David Scott, D-Ga.

The Nov. 17 letter also points out that Congress has frequently reviewed the FHLB membership rules.

“As recently as four years ago, Congress adjusted the FHLB membership rules and did not choose to narrow eligibility for participation in the system, making its intent clear,” the joint letter says.

FHFA issued the membership proposal in early September. It would require many large institutions to hold 10% of their assets in the form of mortgages in order to maintain their FHLB membership. Smaller institutions with less than $1 billion of assets would have to maintain at least 1% of their assets in mortgages.

Currently, applicants have to meet these asset requirements to become a FHLB member but there is no on-going requirement to retain a certain percentage of mortgage assets in portfolio.

The FHFA also wants to curtail the growing number of real estate investment trusts becoming FHLB members through their captive mortgage insurance subsidiary operations.

The Spencer-Scott letter urges FHFA to “reconsider” the membership proposal. FHFA should “begin a dialogue with Congress, where these important policy decisions should be made.”

Please click here to view the article online.

HUD’s Castro Wants to Restart Debate Over GSE Reform

Posted on September 13, 2018September 13, 2018 by Safeguard

On November 17, National Mortgage News published an article featuring comments by Housing and Urban Development Secretary Julian Castro on restarting the debate over the future of Fannie Mae and Freddie Mac.

HUD’s Castro Wants to Restart Debate Over GSE Reform

Housing and Urban Development Secretary Julian Castro is trying to restart the debate over the future of Fannie Mae and Freddie Mac.

“We need legislation to open up the charters and set up a new system that will provide the certainty needed for a competitive marketplace — one where private capital is put ahead of the taxpayer,” Castro said, according to talking points of a speech Castro gave Friday to the California Realtors Association.

The new HUD secretary is seeking to spark a conversation about housing finance reform before the start of a Republican-controlled Congress to see if various interest groups can reach a consensus.

“I know there are some skeptics out that are concerned about what this means for the pricing of mortgages and ensuring a level playing field for all communities,” Castro said. “Let’s take this time before the start of the new Congress and talk about these issues. Let’s see if we can agree on a path forward that puts the housing finance system on more stable footing.”

Some consumer and low-income housing group were unhappy with the affordable housing provisions in the Johnson-Crapo housing reform bill. The bill, sponsored by Sens. Tim Johnson, D-S.D., and Mike Crapo, R-Idaho, was passed by the Senate Banking Committee but never made it the full Senate for a vote.

The two government-sponsored enterprises have been in conservatorship since 2008.

A secondary market “system dominated by Fannie and Freddie in conservatorship is simply not desirable in the long run,” according to the HUD secretary.

Separately, former Federal Housing Finance Agency Director Edward DeMarco was the keynote speaker at an American Enterprise Institute event last Thursday on the future of Fannie and Freddie.

He also spoke about the need for GSE reform legislation. “Congress and the president need to enact legislation to end the conservatorships, extinguish the GSE charters and establish the legal framework for a new secondary mortgage market,” DeMarco said.

He noted that the common securitization platform the GSEs are working on can serve as the “operational backbone of the mortgage securitization market in a post-Fannie and -Freddie world.”

To get housing finance reform to the “finish line,” he said, policymakers must decide what kind of subsidies are needed to support homeownership.

He hopes the new system will “ensure that families can get a house they can afford,” DeMarco said. Policymakers should move away from low-down-payment loans and “focus more on equity and sustainability in mortgage lending.”

Prior to 2008, the GSE pricing models “resulted in creditworthy borrowers subsidizing less creditworthy borrowers,” the former GSE regulator said.

“We must reconsider making highly leveraged long-term loans to families with weak balance sheets and volatile and uncertain incomes. The damage we have inflicted on such well-intended and ill-advised policies has been substantial.”

Please click here to view the article online.

HUD Secretary Says Housing Finance Reform Remains a Top Priority for the Obama Administration

Posted on September 13, 2018September 13, 2018 by Safeguard

On November 17, The Hill published an article outlining comments by HUD Secretary Julian Castro describing the commitment of the Obama administration to overhaul the mortgage finance system during the next two years.

HUD secretary says housing finance reform remains a top priority for the Obama administration

HUD Secretary Julian Castro said Monday that overhauling the mortgage finance system remains a top priority for the final two years of the Obama administration.

Castro suggested that the next Congress consider legislation that would wind down and eventually eliminate mortgage giants Fannie Mae and Freddie Mac as part of the effort to boost the housing market’s recovery.

“This could be, I believe, a good victory either in the lame-duck session or, more realistically, perhaps in the next term of Congress where there is bipartisan support for housing finance reform, for doing away with Fannie and Freddie as we’ve known them, creating a backstop,” he told Bloomberg Television.

The Senate has generated two bipartisan bills, including one by Senate Banking Committee Chairman Tim Johnson (D-S.D.) and ranking member Mike Crapo (R-Idaho) that gained approval by the panel in May.

But, since then, there has been little movement to get a bill through Congress.

“Introducing more private capital into the market and taking the taxpayers off the hook if we do ever experience what we just went through as part of the housing crisis in 2007, 2008, 2009, that is a priority this administration and for HUD,” Castro said.

During the interview, Castro also expressed concerns about potential home buyers struggling to qualify for mortgages.

“If a few years ago, it was too easy to get a home loan and today what we see out there is that for many everyday Americans who are responsible and hardworking it’s too difficult to get a home loan,” he said.

“Then the question is where is the pendulum best placed? Can we get the pendulum right in the middle where it belongs with a balance of ensuring that we don’t slide back to where we were and also ensuring there is good access to credit for Americans who are ready and responsible to buy a home.”

He also discussed Monday’s report showing that the Federal Housing Administration’s financial picture had improved in the past year, and the agency is finally out of debt for the first time in two years.

“The underlying fundamentals of the portfolio of the fund are stronger than they have been in quite a while,” Castro said.

Still, the agency has more progress to make.

Castro said that the FHA’s insurance fund should reach the congressionally mandated 2 percent capital requirement in 2016.

When asked about whether more changes are in the offing to improve its balance sheet, Castro said it would be premature to announce when the FHA might be able to lower fees and premiums, which are at a record high.

“That analysis has not yet been done,” he said.

“We just got this annual report, and so we’ll be taking the time to do the due diligence that is part of answering that question.”

He said that while trying to ensure that the agency’s finances remain in good shape, the FHA needs to fulfill its role to ensure that first-time home buyers and middle-income buyers have sufficient access to credit.

“It’s all about striking that balance, and those are the questions that, going forward, we’re going to be putting a lot of time and effort to continually analyzing,” he said.

Please click here to view the article online.

HUD Releases Two Year Progress Report on Sandy Rebuilding Strategy

Posted on September 13, 2018September 13, 2018 by Safeguard

On October 29, the U.S. Department of Housing and Urban Development (HUD) issued a news release presenting a report on the progress of the Sandy Rebuilding Strategy, released by HUD’s Sandy Program Management Office (PMO).

HUD No. 14-134
George Gonzalez
(703) 638-4624

HUD RELEASES TWO YEAR PROGRESS REPORT ON SANDY REBUILDING STRATEGY
Report Tracks Progress on Recommendations of Sandy Task Force

WASHINGTON – The U.S. Department of Housing and Urban Development’s (HUD) Sandy Program Management Office (PMO) today issued a report tracking progress on the Sandy Rebuilding Strategy. The report is now available online.

“Much work remains to be done, but HUD is committed to providing communities with the necessary assistance to keep helping homeowners and businesses move forward, and to ensure a complete recovery,” said HUD Secretary, Julián Castro. “Through our Sandy Recovery Office, and our leadership role on Rebuild by Design, we continue to maintain a strong regional presence, and will continue to work with grantees and interagency partners to build more resilient communities.”

The Rebuilding Strategy, released by the Hurricane Sandy Rebuilding Task Force in August 2013, includes a long-term plan that guides Sandy Supplemental spending, drives regional coordination, and makes communities more resilient to future disasters.

Today’s report tracks progress on seven goals that are important to the long-term rebuilding of the region in the most economically efficient, ecologically robust and innovative ways possible.

In addition to progress on these critical policy recommendations, the Administration has provided assistance to nearly 300,000 persons/households and small businesses, marking a 33% increase from last year. Further, including the National Flood Insurance Program, the Administration has made more than $30.1 billion available to grantees, representing a 53% increase from last year.

Promoting Resilient Rebuilding through Innovative Ideas and a Thorough Understanding of Current and Future Risk

Sea Level Rise Tool: FEMA, CEQ, the USGCRP, NOAA, and USACE worked together to create a Sea Level Rise interactive web-based map and a sea-level rise calculator with localized data that allows citizens and planners to assess risk up to 100 years in the future.

Ensuring a Regionally Coordinated, Resilient Approach to Infrastructure Investment

Build America Transportation Investment Center at the Department of Transportation: The Center will serve as a one-stop shop for state and local governments, public and private developers and investors seeking to utilize innovative financing strategies for transportation infrastructure projects.

Restoring and Strengthening Homes and Providing Families with Safe, Affordable Housing Options

Community Development Financial Index: The CDFI Index assists help State and local housing programs to identify opportunities to leverage funds and develop public-private partnerships by providing a comprehensive list of certified, proven lenders that offer financial assistance, technical assistance and training, and that already engage in housing or small business lending.

Supporting Small Businesses and Revitalizing Local Economies

SBA HUBZone: SBA has proposed statutory changes to HUBZone so they can better target hundreds of small, disadvantaged businesses competing in the marketplace and improve access to federal procurement opportunities for Hurricane Sandy rebuilding.

Addressing Insurance Challenges, Understanding, and Affordability

Flood Insurance Advocate: FEMA is in the process of creating a Flood Insurance Advocate position who will educate property owners about flood risks, flood mitigation, and ways to reduce flood insurance rates.

Building State and Local Capacity to Plan for and Implement Long-Term Recovery and Rebuilding

FEMA’s Community Planning and Capacity Building Office Partnered with the Council on Foundations: This partnership is building capacities for New York and New Jersey to leverage philanthropic and non-profit funding collaboratives, allowing the states more ability to fill resource gaps to support sustained recovery efforts.

Improving Data Sharing Between Federal, State, and Local Officials

Sandy Program Management Office: The PMO provides transparency for the public on the progress of recovery, and accountability for federal agency partners, by providing detailed information on the progress of the supplemental funding, and quarterly reports on the implementation of the Rebuilding Strategy recommendations. You can find more here.

In total, the Rebuilding Strategy identified 69 specific recommendations across these broad goals as well as specific agencies to lead the implementation of each of them. Since the publication of the Rebuilding Strategy, the Obama Administration has continued working across departments to move the recommendations forward and deliver on their commitments to the region.

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Please click here to view the Sandy Recovery Progress report online.

Please click here to view the news release online.