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Fannie Mae Releases FAQs Regarding CFPB Mortgage Servicing Rules

Posted on September 13, 2018 by Safeguard

On January 10, Fannie Mae released Frequently Asked Questions regarding the Consumer Financial Protection Bureau (CFPB) mortgage servicing rules.

Frequently Asked Questions: Servicing Guide Announcements SVC-2013-20 Delinquency Management and Default Prevention Updates Related to the Consumer Financial Protection Bureau (CFPB) Mortgage Servicing Rules and Other Servicing Responsibilities and SVC-2013-23—Delinquency Management and Other Servicing Responsibilities

These FAQs are intended to help servicers understand and implement the requirements of Announcements SVC-2013-20 and SVC-2013-23, which primarily are effective beginning January 10, 2014.

Q1. Does Fannie Mae’s guidance ensure servicers are in compliance with CFPB rules and regulations?

No. Fannie Mae’s requirements are not intended to cover all of the servicing rules issued by the CFPB. As provided in the Servicing Guide, servicers are expected to comply with all applicable laws, including any CFPB-related mortgage servicing rules applicable to the servicer that are not covered by Fannie Mae’s requirements.

Please click here to view the FAQs in their entirety.

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.

CFPB Highlights Servicing Problems Military Families Face

Posted on September 13, 2018 by Safeguard

On January 21, National Mortgage News published an article titled CFPB Highlights Servicing Problems Military Families Face.

CFPB Highlights Servicing Problems Military Families Face

One-third of consumer complaints filed by military families are mortgage related, according to the Consumer Financial Protection Bureau.

“At listening sessions around the country, concerned military families have told me about the painful consequences of poor mortgage servicing, sloppy lender recordkeeping and inconsistent foreclosure practices,” according to Holly Petraeus, assistant director for the CFPB office of servicemember affairs.

In a blog, Petraeus notes that other homeowners have problems with servicers. “But the demands of military service sometimes increase the severity of the problems or limit the solutions to address them.”

Her Jan. 16 blog points that the CFPB has issued a new servicing rule that bans dual tracking and requires servicers to consider all options that might help troubled borrowers stay in their homes. And servicers must have policies in place so they don’t lose paperwork.

“For military families, this means that when they seek help for a troubled mortgage or have to move because of Permanent Change of Station orders, they will get fewer nasty surprises and face less risk of losing their home,” she says.

Petraeus also advises service members and their spouses to talk with military personal financial officers or lawyers with the Judge Advocate General’s corps if they run into problems with servicers.

Please click here to view the online article.

VA Servicer Newsflash Allowable Attorney Fees, Development Updates

Posted on September 13, 2018 by Safeguard

On December 5, the U.S. Department of Veterans Affairs (VA) released a VALERI Servicer Newsflash regarding allowable attorney fee increases and development updates.

VALERI Servicer Newsflash

IMPORTANT INFORMATION
Allowable Attorney Fee Increases
VA recently published a notice in the Federal Register that new maximum foreclosure attorney fees will be allowed for loan terminations completed on or after December 12, 2013. There are no changes in the amounts allowed for deeds-in-lieu of foreclosure or bankruptcy releases, although VA continues to review these fees. VALERI is being enhanced to allow up to the new amount in guaranty claims for loans terminated on or after December 12, 2013. If the loan terminated prior to December 12, 2013, no more than the prior maximum fees will be allowed.

The new fees are based on the date of loan termination, which is the “Final Event (Loan Termination Event)” as shown in the “State Foreclosure Process and Statutory Bid Information” table under the “Document Library” on the VALERI webpage. Also under the “Document Library” on the VALERI webpage will be a new table for “Allowable Attorney Fees” showing the amounts effective December 12, 2013. In addition, the “VALERI Fee Cost Schedule” is being updated at this time, with the new amounts displayed in RED for a period of time.

Development Updates
On Saturday, December 7, 2013, VA will deploy VALERI Manifest 2.25. The following system enhancements will be included in this release:

CQ 10026 – User deactivation in VALERI automatically occurs after 90 days of not logging in to the application. Once an administrator reactivates a user, they will have 90 days to log in.

CQ 9684 & CQ 9874 – DocManager has had some enhancements. You will now have the ability to view all documents uploaded for a specific process or all processes by checking the “Show All” box.

REPORT UPDATES
The following defects/enhancements were completed in November 2013:

CQ 9954 – Users will no longer receive an error message when pulling the Acquisition Payment Status Report.

CQ 9311 – Users will no longer receive an error message when pulling the Non-Matching Report.

CQ 9746 – Servicer User Audit Report Enhancement: Added columns to this report to include the date a user has been deactivated/activated and by whom.

The following will not be implemented until January 6, 2014:

CQ 9466 – Pre-approval Status Report will display the servicer loan number.

CQ 9880 – Bill of Collections (BOC) Status and Offsets Report will display all loans with an associated BOC.

Please click here to view the online newsflash.

VA Circular 26-13-27 Increases in Allowable Attorney Fees and Preferred Foreclosure Methods

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

On December 16, the U.S. Department of Veterans Affairs (VA) released
Circular 26-13-27, subtitled Increases in Allowable Attorney Fees and Changes in Preferred Foreclosure Methods.

Circular 26-13-27
Increases in Allowable Attorney Fees and Changes in Preferred Foreclosure Methods

1. Purpose. The purpose of this Circular is to announce new maximum attorney fees allowable in guaranty claims, and changes in preferred foreclosure methods.

2. Background. Computation of guaranty claims is addressed in Title 38, Code of Federal Regulations (CFR), § 36.4324, which states that one part of the indebtedness upon which the guaranty percentage is applied is the allowable expenses/advances as described in § 36.4314. Paragraph (b)(5)(ii) of that section describes the procedures to be followed in determining what constitutes the reasonable and customary fees for legal services in the termination of a loan. The Secretary of Veterans Affairs annually reviews allowances for legal fees in connection with the termination of single-family housing loans, including foreclosure, deed-in-lieu of foreclosure, and bankruptcy-related services, issued by the Department of Housing and Urban Development (HUD), Fannie Mae, and Freddie Mac. When the Secretary determines that a change in the maximum allowable amount of attorney fees is necessary, a notice is published in the Federal Register with a new table of maximum allowable fees.

3. New Allowable Attorney Fees. Based on increased expenses for foreclosure actions, the Secretary has deemed it necessary to revise the amounts determined to be reasonable and customary for foreclosure legal services, and published a new table in the Federal Register at 78 FR 67465 on November 12, 2013. The attached Exhibit A is a table representing the Secretary’s determination of the reasonable and customary cost of legal services for the preferred method of terminating Department of Veterans Affairs (VA) home loans in each jurisdiction under the provisions of 38 CFR § 36.4314(b)(5)(ii). This table is effective for loans terminated on or after December 12, 2013. There is no change to the amounts we will allow for attorney fees for deeds-in-lieu of foreclosure or for bankruptcy relief. We are aware that other ongoing reviews of these fees are being conducted, and will continue to monitor these fees on an annual basis.

4. Loan Termination. The new fees are effective for loans terminated on or after December 12, 2013. We consider a loan to be terminated as of the date of the final foreclosure event. Even if the foreclosure started a year or more ago, we will allow the new maximum attorney fee if the loan is terminated on or after December 12, 2013, and the amount actually paid for legal services is equal to or greater than the new maximum amount allowed in that jurisdiction. VA is not a party to contracts between servicers and attorneys, who must resolve any questions regarding billing and payment of fees in the new amounts. The final foreclosure event is published in the “State Foreclosure Process and Statutory Bid Information” table under the “Document Library” on the VA Loan Electronic Reporting Interface (VALERI) webpage, which is available through: http://www.benefits.va.gov/homeloans/servicers_valeri.asp. This is also where the new table for allowable attorney fees may be found, as well as the VALERI Fee Cost Schedule, which will display the new amounts in red type for a period of time.

5. Changes In Preferred Foreclosure Methods. The table in Exhibit A shows the primary method for foreclosing in each State, either judicial or non-judicial, with the exception of those States where either judicial or non-judicial is acceptable. The use of a method not authorized in the table will require prior approval from VA. The new VA table closely mirrors methods for foreclosure allowed by Fannie Mae, with the following exceptions:

a. Hawaii. We determined that in Hawaii the preferred method of foreclosure remains only the judicial method. We are aware that Hawaii has established a new non-judicial foreclosure procedure; however, we believe this new method is not yet well-established enough to provide acceptable title to the real estate community. We will continue to monitor the situation in Hawaii, and will make necessary changes as conditions warrant.

b. Other States. Three other jurisdictions requiring special mention include Oregon, South Dakota, and Nebraska. We continue to prefer the non-judicial method in Oregon and see no need to allow the judicial method on a regular basis. However, we determined that the non-judicial procedure in South Dakota is no longer a preferred method of foreclosure. Also, in the past we routinely allowed either the non-judicial or judicial method of foreclosure in Nebraska. At this time, we are designating non-judicial as the preferred method of foreclosure in Nebraska, although special approval may be requested for a case where judicial foreclosure is deemed necessary.

6. Rescission: This Circular is rescinded January 1, 2017.

By Direction of the Under Secretary for Benefits

Michael J. Frueh
Director, Loan Guaranty Service

Please click here to view the online Circular.

VA Circular 26-13-26 Special Relief After Midwest Tornadoes

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

On December 3, the U.S. Department of Veterans Affairs (VA) released Circular 26-13-26, subtitled Special Relief Following the Midwest Tornadoes.

Special Relief Following the Midwest Tornadoes

1. Purpose. This Circular expresses concern for Department of Veterans Affairs (VA) home loan borrowers affected by the Midwest tornadoes, and describes measures mortgagees may employ to provide relief.

2. Direct and Indirect Impact on Borrowers. Directly affected by the Midwest tornadoes were those whose homes were severely damaged or destroyed, the families of those killed during the storms, and those who suffered considerable personal injury. Also directly affected were those whose work environments were destroyed or severely damaged as a result of the tornadoes. Many others have been indirectly affected, including business partners of those in the federally-declared disaster areas announced by the Federal Emergency Management Agency (FEMA). The impact may continue to ripple throughout the country, as evacuees travel nationwide to seek the support and shelter of family members.

3. Forbearance Request. VA encourages holders of guaranteed loans to extend every possible forbearance to borrowers in distress as a result of the Midwest tornadoes. Careful counseling with borrowers should help determine whether their difficulties are directly or indirectly related to the tornadoes, or whether they stem from other sources that must be addressed. The proper use of authorities granted in VA regulations may be of assistance in appropriate cases. For example, Title 38, Code of Federal Regulations (CFR), section 36.4311 (Prepayments) allows the reapplication of prepayments to cure or prevent a default. This means that if a borrower has been making additional principal payments over a period of years, the principal balance may be increased up to the scheduled balance and the increase applied toward regular installments. Also, 38 CFR 36.4315 (Loan modifications) allows the terms of any guaranteed loan to be modified without the prior approval of VA, provided certain conditions in the regulation are satisfied.

4. Moratorium on Foreclosure. Although the loan holder is ultimately responsible for determining when to initiate foreclosure, and for completing termination action, VA has requested on its website (http://www.benefits.va.gov/homeloans) that holders establish a 90-day moratorium from the date of a disaster on initiating new foreclosures on loans affected by major disasters. VA regulation 38 CFR 36.4324(a)(3)(ii) allows additional interest on a guaranty claim when eventual termination has been delayed due to circumstances beyond the control of the holder, such as VA-requested forbearance. The initial request applies to loans in the federally declared disaster areas, which VA believes should include areas declared by FEMA as eligible for public assistance, as well as those areas eligible for individual assistance. Because of the widespread impact of the Midwest tornadoes, holders should ensure that all foreclosure referrals nationwide during the moratorium are reviewed prior to initiation to ensure that borrowers have not been affected significantly enough to justify delay in referral. Any questions about impact should be discussed with the VA Regional Loan Center (RLC) of jurisdiction.

5. Late Charge Waivers. VA believes that many servicers plan to waive late charges on
loans in the disaster areas, and VA encourages all servicers to adopt such a policy for
any loans that may have been affected due to the ripple effect of the tornadoes as
mentioned in paragraph 2.

6. Credit and VA Reporting. In order to avoid damaging credit records of Veteran
borrowers n the affected areas, many servicers may suspend credit bureau reporting
on loans in those areas. t this time, VA would encourage servicers to consider
suspension of credit reporting on Veteran borrowers nationwide who have been
affected by the tornadoes. Similarly, VA will not penalize servicers for any late default
reporting to VA as a result of the tornadoes. This may include direct damage to servicer
facilities located in the disaster areas or their operations elsewhere which may have
been impacted by business partners within the disaster areas. Please contact the
appropriate RLC with any questions.

7. Rescission: This Circular is rescinded December 1, 2014.

By Direction of the Under Secretary for Benefits
Michael J. Frueh
Director, Loan Guaranty Service

Please click here to view the online Circular.

USDA Updates Guaranteed Rural Housing Program 7 CFR Part 3555

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

Updated June 4: On June 4, the U.S. Department of Agriculture (USDA) released an update to the 7 CFR 3555 Draft Handbook, subtitled DRAFT Technical Handbook to 7 CFR Part 3555 Posted.

DRAFT Technical Handbook to 7 CFR Part 3555 Posted

This ListServ message was originally sent on May 21, 2014 but is being resent with a revision to clarify servicing actions. See highlighted area below.

On December 9, 2013 the Federal Register published 7 Code of Federal Regulations (CFR) Part 3555, “Single Family Housing Guaranteed Loan Program.” 7 CFR 3555 becomes effective on September 1, 2014 and will replace 7 CFR 1980 Subpart D. Servicing actions on or after September 1, 2014 will be subject to the requirements of 7 CFR 3555.

USDA administrative procedures have been removed from the interim final rule and will be provided in a Technical Handbook to be implemented September 1, 2014, to support the new regulation. A draft version of the Technical Handbook can be found online at the USDA LINC Training and Resource Library (7 CFR 3555 and Draft Handbook – Implementation 9/1/2014 section) at https://usdalinc.sc.egov.usda.gov/USDALincTrainingResourceLib.do. Future training opportunities for lenders will be announced through electronic Listserv notifications.

Should you have any questions, please feel free to contact the Single Family Housing Guaranteed Loan Division at 202-720-1452.

On December 9, the U.S. Department of Agriculture (USDA) released an update titled USDA Overhauls Single Family Housing Guaranteed Loan Program.

USDA Overhauls Single Family Housing Guaranteed Loan Program

Changes will strengthen rural housing markets; encourage new construction

WASHINGTON, Dec. 9, 2013 – U.S. Department of Agriculture (USDA) Secretary Tom Vilsack today announced a series of sweeping changes to a popular loan program for rural homebuyers. The changes are part of an extensive overhaul that will strengthen rural housing markets, increase the availability of rural home loans and spur the construction of new homes in rural areas.

“These improvements will help create jobs and enable more people to participate in the rural home loan guarantee program,” Vilsack said. “The changes will add significant capital to rural areas and give rural Americans more opportunities to make financing decisions that lay the groundwork for the future prosperity of their families.”

The changes are published in today’s Federal Register. They take effect Sept. 1, 2014 and make several improvements to USDA Rural Development’s Single Family Housing Guaranteed Loan Program. Among other things, they expand the types of lenders who are eligible to participate. With the rule change, any lending entity supervised and regulated by the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, the Federal Reserve Banks, or the Federal Housing Finance Board may underwrite loans guaranteed by Rural Development. This will enable many small community banks and credit unions to participate in the guaranteed loan program. Currently, these entities are not eligible lenders.

In another policy change, for the first time, borrowers will be able to choose home loan terms shorter than 30 years. This will result in a significant cost savings for borrowers who qualify for the higher payments and who want to pay off their loan faster and pay less interest on their loan.

Collectively, these changes will make housing loans more readily available to residents in underserved communities, such as those targeted by USDA’s StrikeForce initiative. Through StrikeForce, USDA staff work with state, local and community officials to increase awareness of USDA programs that help rural residents, businesses and communities.

As part of the overhaul, Rural Development has begun a series of enhancements to automate processes, reduce paperwork and reduce loan approval times.

Additional program improvements are:

Lenders may consider a home’s energy efficiency as a compensating factor when underwriting a mortgage application. Energy efficiency is an attractive feature for homebuyers and sellers. Energy efficient homes help the nation lessen its dependence on foreign oil and result in lower utility costs for homeowners. Lower utility costs also improve the local economy by directly increasing consumers’ disposable income.
Lenders and borrowers no longer will be required to initiate separate construction and permanent loans for new homes. Instead, there will be one closing for one loan, known as a construction-to-permanent loan.
Lenders will be required to consider foreclosure prevention techniques such as loan modifications and short sales. Currently, lenders are “encouraged” but not required to do so.

These changes will be fully outlined in a new handbook to accompany program regulations. The handbook will provide a single reference point on program rules for borrowers and lenders. It will replace more than 20 administrative notices that are written separately and must be updated annually.

For additional details, see page 73927 of the December 9 Federal Register. USDA welcomes public comment on the changes. The deadline to submit comments is January 8, 2014. See Page 73927 for information on how to submit comments.

Since the start of the Obama Administration, more than 700,000 rural residents have bought homes with mortgages guaranteed by USDA Rural Development. In many rural areas, the majority of homes are financed with loans underwritten through this program.

Vilsack said that today’s announcement is another reminder of the importance of USDA programs for rural America. A comprehensive new Food, Farm and Jobs Bill would further expand the rural economy, Vilsack added, saying that’s just one reason why Congress must get a comprehensive Bill done as soon as possible.

President Obama’s plan for rural America has brought about historic investment and resulted in stronger rural communities. Under the President’s leadership, these investments in housing, community facilities, businesses and infrastructure have empowered rural America to continue leading the way – strengthening America’s economy, small towns and rural communities. USDA’s investments in rural communities support the rural way of life that stands as the backbone of our American values.

USDA is an equal opportunity provider and employer. To file a complaint of discrimination, write to USDA, Assistant Secretary for Civil Rights, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue, S.W., Stop 9410, Washington, DC 20250-9410, or call toll-free at (866) 632-9992 (English) or (800) 877-8339 (TDD) or (866) 377-8642 (English Federal-relay) or (800) 845-6136 (Spanish Federal-relay).

Please click here to view the online release.

USDA Brings Additional Relief to Landowners Affected by Hurricane Sandy

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

On December 18, the U.S. Department of Agriculture (USDA) released an announcement titled USDA Brings Additional Relief to Landowners Affected by Hurricane Sandy.

USDA Brings Additional Relief to Landowners Affected by Hurricane Sandy

Second Round of Conservation Easement Applications to be Accepted in 2014

WASHINGTON, Dec. 18, 2013 – Agriculture Secretary Tom Vilsack announced today the selection of approximately $19.2 million in funding for floodplain easements to help the victims of Hurricane Sandy and prevent future damage in flood-prone areas in the Northeast region. Vilsack also announced that another round of applications for easement funds will be accepted starting next month. Funding is provided by Congress through the USDA Natural Resources Conservation Service (NRCS) Emergency Watershed Protection Program (EWP-FPE).

“As we help Northeast residents overcome the tragic devastation caused by Hurricane Sandy, we can also work together to improve resilience and protect folks from flooding and other threats in the years to come,” said Vilsack. “This funding is helping residents ensure that when disaster strikes, all possible measures have been taken to mitigate damage from floods, protect communities and save lives. The new floodplain easements we’re announcing today are one part of a comprehensive approach to learn from Hurricane Sandy and increase our resilience for the future.”

Landowners in Connecticut, New Jersey and New York are voluntarily placing their land into floodplain easements, which will be restored to natural conditions and help to prevent damages from future storms. When lands are enrolled into the NRCS floodplain easements program, homes, structures, dikes or other obstacles to water flow are removed, allowing water to move naturally across floodplains when streams and rivers rise beyond their banks.

Restoration of these perpetual easements not only helps prevent flooding, but improves conditions for wildlife. For easements on open or agricultural land, the landowner retains ownership and several other rights including the right to use the land for recreational purposes.

Examples of how easements announced today are helping landowners:

Old Field Creek area of West Haven, Conn.: A year after Hurricane Sandy, homeowners were plagued by mold and other problems. Some landowners wanted to sell their property and move to higher ground, but were unable to find buyers. NRCS will provide $2.6 million to purchase floodplain easements on 34 acres in the Old Field Creek salt marsh and 12 homes along Blohm, May, and Third Avenues to mitigate flooding during future storms and provide relief to residents.

Bay Point, N.J.: Permanent easements equaling about $4 million for the 40-acre Bay Point peninsula were awarded today. After demolition, removal and restoration, the easements will provide ecological benefit as well as provide relief to 16 homeowners dealing with significant damage and continued flooding from the aftermath of Hurricane Sandy. This region is globally significant for a number of migratory bird species.

New Creek/West Branch floodplain, Staten Island, N.Y.: NRCS will provide $7.5 million to restore this urban wetland. The project includes creating wetland pools that will reduce the speed of water flow and hold flood and storm water. Approximately 80 percent of streets in and around the project area regularly flood because they do not have storm sewers, and the improvements announced today will provide outlets for storm sewers to be constructed in the future. The restoration will provide habitat for animals and will promote native habitats that range from open water to upland forest.

A total of approximately 400 acres are covered by today’s announcement. For a complete list of the enrolled areas click here. Because NRCS works to enroll entire floodplains, applications are submitted in groups. A majority of applications NRCS received during the recent funding round were from areas where not all owners chose to enroll. Only applications that included every structure in the floodplain were enrolled in the first round. The second round of applications is expected to complement the properties accepted by USDA in round one.

Since 1997, NRCS has enrolled nearly 1,500 easements and more than 180,000 acres into the program, including lands in 36 states.

The second sign-up for EWP-FPE will be held in January 2014. Interested landowners should contact their local USDA Service Center to learn more about the program and submit an application prior. More information is also available on the NRCS floodplain easement website. To hear a USDA radio story about the selections click here.

USDA is an equal opportunity provider and employer. To file a complaint of discrimination, write: USDA, Office of the Assistant Secretary for Civil Rights, Office of Adjudication, 1400 Independence Ave., SW, Washington, DC 20250-9410 or call (866) 632-9992 (Toll-free Customer Service), (800) 877-8339 (Local or Federal relay), (866) 377-8642 (Relay voice users).

Please click here to view the online update.

US Senate Confirms Mel Watt as Next FHFA Director

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

On December 10, HousingWire published an article titled U.S. Senate Confirms Mel Watt as Next FHFA Director.

U.S. Senate confirms Mel Watt as next FHFA director
Congressman secures 57 Senate votes

It’s official: Congressman Mel Watt, D-N.C., will lead the Federal Housing Finance Agency after the U.S. Senate confirmed his nomination Tuesday afternoon.

Senators confirmed Watt as Ed DeMarco’s replacement, with a majority of the chamber’s legislators voting in Watt’s favor. The congressman easily obtained 57 votes, with 41 Senators voting against the appointment.

Ed DeMarco, who has served as acting director of the FHFA ever since the GSEs entered conservatorship, has long staved off attempts to use the agency as an instrument for enacting principal write-downs to help underwater borrowers.

The market has had plenty of time to get used to a Watt appointment, but he’s still viewed as a major sea change for the conservator of Fannie Mae and Freddie Mac.

Housing advocates praised the move on the grounds that Watt is more likely to grant some form of additional housing aid, either through an expanded Home Affordable Refinance Program or principal write-downs. But the mortgage industry — especially investors in residential mortgage-backed securities — remain guarded about the prospect of Watt at the helm.

“The FHFA director has the power to help rebuild local economies and communities through direct action and administrative reforms, and we’re confident Mel Watt will do just that,” said Alan Jenkins, executive director of The Opportunity Agenda, a group that advocates for expanding homeownership.

Elyse Cherry, CEO of Boston Community Capital, a firm that successfully enacted a principal reduction-shared appreciation program to help underwater borrowers, is a strong supporter of Watt’s.

“I am glad the Senate is moving forward with Mr. Watt’s confirmation to the FHFA,” Cherry said. “For too long, our policy at this agency has been headed in the wrong direction for the wrong reasons, and Mr. Watt’s nomination is a chance to turn things around.”

But the Watt nomination certainly drew its fair share of skeptics from day one. With Mel Watt often viewed as more of a political figurehead, the mortgage industry was less receptive to the president’s pick at first.

Several months ago, when Watt was first in consideration, Edward Mills, a senior vice president at FBR Capital Markets, said the president’s DeMarco replacement pick would raise eyebrows on Wall Street.

“One of the hallmarks of the DeMarco tenure is that he was a nonpolitical figure before accepting this job,” said Mills. “Since then, he has taken his stand as conservator very seriously and has been resistant to pressure from the Hill,” he added.

But at this moment, it’s unknown to Wall Street, the mortgage industry or even Congress how Watt will lead.

Still, the North Carolina congressman obtained mortgage industry support back in October when the Mortgage Bankers Association got behind his nomination.

Two months ago, MBA chairman E.J. Burke said he believed Watt could bring considerable experience to the post of FHFA director, given his strong base of understanding on a wide variety of public policy issues related to housing finance.

Please click here to view the online article.

HUD’s Statement on Confirmation of Mel Watt
MBA Commends Confirmation of Mel Watt as FHFA Director

Senate Banking Committee Files Report on FHA Solvency Bill, FHA actuarial report, FHA Solvency Act of 2013

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

On December 19, the United States Senate Committee on Banking, Housing, & Urban Affairs released an update titled Johnson, Crapo File Report on FHA Solvency Bill.

JOHNSON, CRAPO FILE REPORT ON FHA SOLVENCY BILL

Washington, D.C. – Banking Committee Chairman Tim Johnson and Ranking Member Mike Crapo today issued the following remarks after filing the report on the Federal Housing Administration (FHA) Solvency Act of 2013 (S. 1376). According to the Congressional Budget Office, the bill would reduce federal discretionary spending by more than $500 million over a five-year period of time while forcing the FHA to build up to a 3 percent capital ratio. Last week, the FHA released its independent financial review showing that it has improved its financial standing over the previous year, but still faces a shortfall.

“Last week’s FHA actuarial report contained encouraging news and demonstrates that the FHA is moving in the right direction, but more still needs to be done to provide the FHA stability for the long-run,” said Chairman Johnson. “The FHA Solvency Act is a commonsense measure. It will provide the Federal Housing Administration the tools it needs to continue to help qualified borrowers realize the dream of homeownership and inject countercyclical support to the housing market in times of stress—all while saving the taxpayer money.”

“The Congressional Budget Office’s estimates show that we can strengthen the FHA while decreasing our federal deficit,” Crapo said. “At a time when our national debt is at a record high, it is vital that we work together to pass commonsense reforms that can move us toward an improved, more responsible fiscal path. While I am encouraged FHA has improved its financial standing over the previous year, we must do more to protect taxpayers from the liabilities of this fund. Congress should move as soon as possible to comprehensively reform the FHA and our country’s broader housing finance system.”

The CBO estimates that S. 1376 could save FHA $514 million over the 2014-2018 period, assuming enactment of appropriation laws necessary to implement the legislation’s provisions. The Johnson-Crapo bill will give the FHA tools to improve its financial condition, including strengthened underwriting standards, enhanced lender accountability measures, and reforms to the FHA’s reverse mortgage program. The bill passed out of Committee on July 31 with wide bipartisan support.

To read the committee report, click here. To read the full CBO report, click here.

Please click here to view the online update.

New FHFA Director Watt Will Delay GSE Fee Increases

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

On December 23, National Mortgage News published an article titled New FHFA Director Will Delay GSE Loan Fee Increases.

New FHFA Director Will Delay GSE Loan Fee Increases

The in-coming Federal Housing Finance Agency director does not want Fannie Mae and Freddie Mac lenders implementing newly announced loan fee hikes until he has a chance to thoroughly review the rationale behind the higher fees.

Rep. Mel Watt, D-N.C., said late Friday that he will be sworn in as the new GSE regulator on Jan. 6.

Upon being sworn in as the FHFA director, “I intend to announce that FHFA will delay implementation” of the 10 basis point guarantee fee and loan level price adjustment fee increases, Watt said in a statement issued by his congressional office.

The current FHFA acting director Edward DeMarco announced the loan fee increases on Dec. 9. The first fee increase is slated to go into effect March 1 for newly delivered loans. But lenders would have to price their loans based on the new fee schedules much earlier.

“I felt it was important to announce my intention now because of the prospect that some lenders could start to price the changes…well before the effective dates,” Watt says.

Please click here to view the online article.