Page 440 – Safeguard Properties

FNMA SVC-2013-21 Updates to Deed-in-Lieu Requirements

Posted on September 13, 2018 by Safeguard

On October 17, Fannie Mae released Servicing Guide Announcement SVC-2013-21, subtitled Updates to Mortgage ReleaseTM (Standard Deed-in-Lieu of Foreclosure) Requirements.

Servicing Guide Announcement SVC-2013-21
Updates to Mortgage Release^TM (Standard Deed-in-Lieu of Foreclosure) Requirements

This Announcement describes the following Mortgage Release policy changes and clarifications:

Post-execution property inspection requirements and servicer’s final acceptance of the Mortgage Release,
Three-month transition option eligibility, and
Twelve-month lease transition option.

Post-Execution Property Inspection Requirements and Servicer’s Final Acceptance of the Mortgage Release

Servicing Guide, Part I, Section 201.11.03: Late Submission of REOgram; Part VIII, Section 116.01: Submitting the REOgram; Servicing Guide Announcement SVC-2012-25: Mortgage Release (Standard Deed-in-Lieu of Foreclosure and Deed for Lease) Requirements and Updates to Standard Short Sale/HAFA II Requirements and Announcement SVC-2013-13: Updates to Standard Short Sale/HAFA II and Mortgage Release^TM (Standard Deed-in-Lieu of Foreclosure) Requirements

In Announcement SVC-2013-13, Fannie Mae updated several Mortgage Release requirements, including the requirement for a final interior property inspection after the borrower executes a Mortgage Release (to ensure that the subject property is vacant, secure, and in broom swept condition). Announcement SVC-2013-13 also provided that the servicer must submit the REOgram^® within 24 hours of the date the servicer accepts the executed Mortgage Release.

Fannie Mae is revising the servicer’s responsibilities in finalizing the Mortgage Release as follows. The servicer must:

complete a final interior property inspection no more than two business days following the receipt of the executed deed and all related documents;
not complete final acceptance of the executed Mortgage Release until after it has received the results of the final property inspection;
submit the case into HomeSaver Solutions^® Network (HSSN), regardless of the transition option chosen, to complete its final acceptance of the Mortgage Release; and
submit the REOgram within 24 hours of the date the servicer completes final acceptance of the executed Mortgage Release. The servicer must report the HSSN closing date as the foreclosure sale date on the REOgram. This is the date that Fannie Mae will use when determining whether to charge the servicer $100 a day if the REOgram submission is late.

Three-Month Transition Option Eligibility

Servicing Guide, Part VII, Section 606.01.01: Eligibility; and Servicing Guide Announcement SVC-2012-25: Mortgage Release (Standard Deed-in-Lieu of Foreclosure and Deed for Lease) Requirements and Updates to Standard Short Sale/HAFA II Requirements

When evaluating a borrower for one of Fannie Mae’s Mortgage Release transition options, servicers must use the eligibility criteria in Part VII, Section 606.01.01: Eligibility. Announcement SVC-2012-25 removed several eligibility criteria from the list in Part VII, Section 606.01.01 for use in screening borrowers for the three-month transition option.

Fannie Mae is updating its current policy to also exclude the following from the three-month transition option program eligibility criteria:

At least three payments have been made since origination or since the last modification.
The mortgage loan is not 12 or more months delinquent when referred to Fannie Mae for transition option consideration.
The borrower is not involved in an active bankruptcy proceeding.

Twelve-Month Lease Transition Option

Servicing Guide, Part VII, Section 606.01.01: Eligibility; and Servicing Guide Announcement SVC-2012-25: Mortgage Release (Standard Deed-in-Lieu of Foreclosure and Deed for Lease) Requirements and Updates to Standard Short Sale/HAFA II Requirements

Announcement SVC-2012-25 provided that the servicer must ensure that the borrower agrees to assign and transfer to Fannie Mae any rents if the property is rented and agrees to collect all rental income.

Effective immediately, servicers are no longer required to ensure that the borrower will assign and transfer any rents to Fannie Mae and will collect rental income. The occupant(s) will be required to execute a new Fannie Mae lease and rent will be due in accordance with the terms of the lease agreement.

*****
Servicers should contact their Servicing Consultant, Portfolio Manager, or Fannie Mae’s National Servicing Organization’s Servicer Support Center at 1-888-FANNIE5 (1-888-326-6435) with any questions regarding this Announcement.

To view the online announcement, please click here.

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.

FNMA SVC-2013-20 Delinquency Management and Default Prevention Updates

Posted on September 13, 2018 by Safeguard

On October 11, Fannie Mae released Servicing Guide Announcement SVC-2013-20, subtitled Delinquency Management and Default Prevention Updates Related to the Consumer Financial Protection Bureau Mortgage Servicing Rules and Other Servicing Responsibilities.

Servicing Guide Announcement SVC-2013-20
Delinquency Management and Default Prevention Updates Related to the Consumer Financial Protection Bureau Mortgage Servicing Rules and Other Servicing Responsibilities

Fannie Mae is updating delinquency management and default prevention servicing policies impacted by certain Consumer Financial Protection Bureau (CFPB) rules and regulations that implement the mortgage servicing provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). This Announcement is not, however, intended to address all CFPB servicing requirements adopted in response to the Dodd-Frank Act. Servicers are expected to comply with all applicable laws including any CFPB-related mortgage servicing requirements not covered below. Unless stated otherwise, the requirements detailed below apply to all mortgage loans secured by all property types (i.e., principal residences, second homes, and investment properties) that are

held in Fannie Mae’s portfolio,
sold to Fannie Mae for cash and subsequently securitized into Mortgage-Backed Security (MBS) pools (known as Pooled from Portfolio or PFP mortgage loans), or
sold to Fannie Mae in exchange for MBS that are part of an MBS pool serviced under the special servicing option or a shared-risk MBS pool for which Fannie Mae markets the acquired property.

This Announcement describes policy changes related to the following:

Borrower Inquiries and Error Resolutions Process
Borrower Delinquency Management Model
Payment Change Notification
Borrower Solicitation Letter – 31 Days Delinquent (Form 731)
Acknowledgement of Borrower Response Package (BRP) and Incomplete Information Notice
Evaluation Notice
Appeals Process for the Denials of Mortgage Loan Modifications
Documentation Required for Forbearance
Requesting Approval for a Forbearance Extension
Prereferral to Foreclosure Review
Referral to Foreclosure
Delay in Legal Action

Effective Date
The effective date for this Announcement is January 10, 2014, unless stated otherwise.

Please click here to view the announcement in its entirety.

FNMA LL-2013-08 Impact of Federal Government Shutdown

Posted on September 13, 2018 by Safeguard

On October 1, Fannie Mae released Lender Letter LL-2013-08 subtitled Impact of Federal Government Shutdown.

Lender Letter LL-2013-08

To: All Fannie Mae Single-Family Sellers and Servicers

Impact of Federal Government Shutdown

Federal employees across the country may be affected by the federal government shutdown, including employees who work for government contractors, vendors, and other businesses that rely on work from government agencies or that offer goods and services to members of the government work force in their localitites.

Fannie Mae is providing temporary guidance on selling and servicing policies that may be impacted by the federal government shutdown that occurred on September 30, 2013. This guidance assumes that the shutdown will be temporary in nature. These temporary policies are effective October 1, 2013, and will automatically expire when the federal government resumes full operations. If the government shutdown lasts for a prolonged period, Fannie Mae will provide additional guidance.

Please click here to view LL-2013-08 in its entirety.

FHLMC Guide Bulletin 2013-22 Updates to Servicing Requirements

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

On October 18, Freddie Mac released Single-Family Seller/Servicer Guide (Guide) Bulletin 2013-22, which updates and revises servicing requirements.

In Single-Family Seller/Servicer Guide (Guide) Bulletin 2013-22, we’re announcing servicing changes that will streamline processes to help Servicers operate more efficiently in a constantly changing servicing industry. Some requirement changes included in Guide Bulletin 2013-22 are:

Providing guidance on when to foreclose in Freddie Mac’s name without prior written approval.
If applicable law prevents a Servicer from conducting a foreclosure in its own name, because the Servicer owns or services a subordinate mortgage on the mortgage premises, Servicers may instruct foreclosure counsel to conduct the foreclosure in Freddie Mac’s name without prior written approval.
Revising requirements for vesting the title after a foreclosure sale.
For conventional mortgages not purchased by a third party at foreclosure sale, the property’s title may be vested in the Servicer’s name after foreclosure sale and subsequently transferred to Freddie Mac, if it is in Freddie Mac’s best interest to do so.
Adding new expense codes and item unit pricing for property preservation as well as new reimbursement limits for abandoned properties.
We’re making these changes to more accurately reflect the type of property preservation work done by Servicers and to eliminate certain requests for pre-approval.

We’re also reminding Servicers of requirements related to reimbursement requests for condominium, homeowners association and Planned Unit Development assessments as well as offering them relief from certain tax penalties incurred on delinquent non-escrowed mortgages in the State of California.

Read Guide Bulletin 2013-22 for additional updates.

Training and Resources
Please visit Freddie Mac’s Learning Center for additional information on our training programs and references tools.

For More Information

Read Guide Bulletin 2013-22.
Contact your Freddie Mac representative.

FHLMC Guide Bulletin 2013-21 Updates Mortgage Servicing Requirements

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

On October 11, Freddie Mac released Guide Bulletin 2013-21, subtitled Updates in Response to the CFPB Mortgage Servicing Final Rule.

UPDATES IN RESPONSE TO THE CFPB MORTGAGE SERVICING FINAL RULE

Freddie Mac is providing Servicers with updated mortgage servicing requirements in today’s Single-Family Seller/Servicer Guide (Guide) Bulletin 2013-21. The updated requirements are in response to the Consumer Financial Protection Bureau’s (CFPB) final rule, which implements the mortgage servicing provisions of the Truth-in-Lending Act and Real Estate Settlement Procedures Act, as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

All of the changes announced in this Guide Bulletin are effective for Servicing activities completed on or after January 10, 2014.

The revised requirements announced in today’s Guide Bulletin, which impact requirements adopted under the Federal Housing Finance Agency (FHFA)-directed Servicing Alignment Initiative, are the result of discussions between Freddie Mac, Fannie Mae, and FHFA to assess the implications of the final rule. FHFA has directed us to align with Fannie Mae on the revised requirements included in this Guide Bulletin.

Servicers Are Responsible for CFPB Final Rule Compliance

While Freddie Mac has established our servicing requirements in response to the CFPB’s final rule, Freddie Mac will not interpret CFPB regulations for Servicers or determine how Servicers should comply. Compliance with the CFPB final rule and other applicable laws are the Servicer’s responsibility. A Servicer’s compliance with Freddie Mac’s requirements does not ensure that the Servicer is in compliance with the CFPB final rule or any other applicable laws.

Servicing Requirements for Delinquent Mortgages Secured by Primary Residences

We’ve added new Guide Chapter 63, Delinquency Management on Mortgages Secured by Primary Residences, to provide guidance on communication and collection efforts, the appeals process, and foreclosure referrals and suspension. Please familiarize yourself with the following changes:

Collection Efforts and Use of a Loss Mitigation Tool. Servicers are prohibited from using a loss mitigation tool for purposes of delaying the initial borrower solicitation package required to be sent by the 35th day of delinquency. Servicers are now required to send the initial borrower solicitation package as early as the 31st day and no later than the 35th day of delinquency unless quality right party contact and borrower commitment to cure the delinquency has been obtained. Servicers may continue to use a loss mitigation tool to manage calling campaigns.
The Appeals Process. New requirements are being introduced for the borrower’s appeals process for the First Complete Borrower Response Packages (BRP) submitted 90 or more days prior to a foreclosure sale date or when a foreclosure sale date has not yet been scheduled. Refer to Guide Section 63.3 for these new requirements, the Guide Glossary for the newly defined “First Complete Borrower Response Package”, and Guide Exhibit 93, Evaluation Model Clauses, for updated evaluation model clauses.
Revised Foreclosure Referral Requirements. Servicers may no longer refer to foreclosure any earlier than the 121st day of delinquency unless one of the exceptions outlined in Guide Section 66.9.1 applies or applicable law permits earlier referral. Servicers must refer all mortgages secured by Primary Residences with expired breach letters to foreclosure no earlier than the 121st day of delinquency and no later than five business days after the 121st day of delinquency. In addition, Servicers must take the first legal action after referral to foreclosure.
Foreclosure Suspension Obligations. After referral to foreclosure, if a Servicer receives the First Complete BRP on a mortgage secured by a Primary Residence more than 37 days prior to a foreclosure sale date or a foreclosure date being scheduled, the Servicer must delay taking the first legal action. If the first legal action has been taken, Servicers must delay motion for judgment or order of sale unless certain conditions apply.

Servicing Requirements for All Mortgages

Today’s Guide Bulletin also announces updates for servicing requirements related to BRP acknowledgement, error resolution, disaster forbearance plans, and pre-referral to foreclosure.

BRP Acknowledgement. Within five business days of BRP receipt, Servicers must confirm in writing to borrowers that they’ve received the BRP.
Error Resolution. Freddie Mac has replaced our current case escalation requirements with provisions for error resolution for any servicing errors asserted by borrowers.
Disaster Forbearance Plan. A complete BRP must be obtained when the borrower is being considered for and offered a forbearance plan exceeding six months in length. In cases where borrowers impacted by an Eligible Disaster are unable to provide complete BRPs at the end of an initial six months of disaster forbearance, Servicers may offer a successive disaster forbearance plan up to an additional six months in length without a complete BRP. Servicers may not exceed a total of 12 months of disaster forbearance in total without Freddie Mac approval.
Pre-Referral to Foreclosure. Servicers now have up to 15 days to complete their pre-referral review prior to foreclosure referral. We’ve also eliminated the requirement for Servicers to postpone foreclosure referral for up to 10 days if a complete BRP is received.

Today’s Guide Bulletin has detailed information about these changes.

Reminder about CFPB and ECOA Final Rule

Finally, we’d like to remind Servicers to review Freddie Mac updated guidance related to the CFPB final rule that implements the Equal Credit Opportunity Act property valuation notice and disclosure requirements in our October 8 Guide Bulletin 2013-20.

Training and Resources

To help Servicers understand the new and revised requirements announced in this Guide Bulletin, we encourage registration for the Bulletins 2013-20 & 2013-21: Servicing Updates in Response to the CFPB’s Mortgage Servicing Rules webinar.

Visit Freddie Mac’s Learning Center to view updated training materials supporting the changes announced in this Bulletin.

Get More Information

Review Guide Bulletin 2013-21 [PDF].
Check out Freddie Mac New Mortgage Servicing Requirements and FAQs
Visit the CFPB website or review the CFPB Mortgage rules at a glance chart that contains the final rules, compliance aids, and other resources.
Contact your Freddie Mac representative.

FHLMC Guide Bulletin 2013-20 Valuation Data Enhancements

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

On October 8, Freddie Mac released Systems Changes to Enhance Freddie Mac Valuation Data Announced in Guide Bulletin 2013-20.

Systems Changes to Enhance Freddie Mac Valuation Data Announced in Guide Bulletin 2013-20

In January 2013, the Consumer Financial Protection Bureau (CFPB) issued a final rule on the Equal Credit Opportunity Act (ECOA) amendment under Regulation B. The final rule, which is effective on January 18, 2014, requires creditors to provide applicants with free copies of all appraisals and other written property valuations developed in connection with an application for credit.

As part of our ongoing support to help you prepare for the mortgage industry’s new rules, Single-Family Seller/Servicer Guide (Guide) Bulletin 2013-20 announces enhancements to our tools and systems that provide Freddie Mac proprietary property valuation data. These enhancements will help make our valuation data easier for loan applicants and borrowers to understand.

Please review today’s Bulletin for details on how we are enhancing Home Value Explorer® (HVE®) data, Loan Prospector®, Uniform Collateral Data Portal® (UCDP®), and BPOdirect® as summarized below, and for guidance on what supporting text should be provided when you share our valuation data with borrowers or loan applicants.

In addition, the Bulletin announces important changes to mortgage file requirement for Freddie Mac Relief Refinance MortgagesSM and Servicing changes related to property valuation requirements. We are also extending the effective date for the Seller/Servicer fraud-related training requirement for third-party vendors announced in an earlier Bulletin.

Originate & Underwrite and Sell & Deliver

Using HVE data for loan originations. We are making changes to the way HVE data is displayed and/or adding supporting text to help explain Freddie Mac’s HVE data distributed through:
- Loan Prospector
- HVE look-up tool
- UCDP

As a reminder, if you receive HVE data directly from Freddie Mac tools, the use of the HVE data is governed by the terms and conditions of Guide Exhibit 32, Terms Relating to Use of Data Generated by Home Value Explorer. We have updated Exhibit 32 to revise our restrictions on how and under what conditions you can disclose HVE data to loan applicants and borrowers.

Updating requirements for Relief Refinance Mortgages. To provide you more flexibility,we no longer require a defined documentation format for HVE point value estimates for Relief Refinance Mortgages. However, if HVE is used to determine a property’s value for a Relief Refinance Mortgage, you must be able to provide the HVE documentation if requested by Freddie Mac.

Servicing

Adding supporting text for BPOdirect valuation data. We are updating the BPOdirect screen that returns an HVE point value estimate (also known as “Auto Value”) and the broker price opinions (BPO) provided through BPOdirect to include supporting text for use when valuation information is shared with borrowers.
Providing property valuation information to borrowers. Servicers must provide the borrower with property valuation information and any pertinent notices, as required by all applicable laws, when loss mitigation decisions are made. This requirement applies regardless of whether the Servicer, Freddie Mac or both are making the decision on the workout or relief option. This requirement is effective when you begin providing Freddie Mac valuation information to borrowers to meet CFPB’s final rule on the ECOA amendment.
Revising our property valuation requirements for modifications. Servicers must meet the updated requirements for obtaining property valuations for loan modifications, including those processed under the Home Affordable Modification Program. These revised requirements include, but are not limited to the requirements to obtain the information either through an HVE authorized distributor or BPOdirect, and to use the Auto Value for a property if one is available in BPOdirect. We are also discontinuing the Automated Valuation Model special report currently available on FreddieMac.com. These changes are effective when you begin providing Freddie Mac valuation information to borrowers to meet CFPB’s final rule on the ECOA amendment.

For More Information

Review Guide Bulletin 2013-20 [PDF].
Visit our webpage, Using Freddie Mac Valuation Data.
Call your Freddie Mac representative.
Look for additional operational and system details which will be provided through future Single-Family Update emails.

To view the online bulletin, please click here.
To view FAQs, please click here.

FHLMC Guide Bulletin 2013-19 Guidance Regarding Government Shutdown

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

On October 7, Freddie Mac released an update titled Guidance Regarding Changes Relating to Federal Government Shutdown Announced in Guide Bulletin 2013-19.

Guidance Regarding Changes Relating to Federal Government Shutdown Announced in Guide Bulletin 2013-19

To assist borrowers impacted by the federal government shutdown (shutdown) that began October 1, 2013, we are announcing temporary guidance regarding temporary changes to certain Single-Family Seller/Servicer Guide (Guide) requirements. The changes announced in today’s Guide Bulletin 2013-19 are effective October 8, 2013, and supersede any other temporary guidance previously announced related to Freddie Mac and the shutdown. This guidance will terminate automatically when the federal government re-opens and is fully operational, unless otherwise announced.

Originate & Underwrite

Verification of employment. During the government shutdown you are required to meet Freddie Mac requirements for income and employment documentation. You may obtain verification of employment for government employees, including those on furlough, from a third-party service provider.
Internal Revenue Form (IRS) Form 4506-T. While IRS Form 4506-T, Request for Transcript of Tax Return, information is required as part of your in-house quality control program, we only require borrower’s signature prior to closing. The IRS does not need to process the form before closing.

Sell & Deliver

Eligibility for sale to Freddie Mac. Mortgages to federal government employees, and other individuals directly impacted by the shutdown, including borrowers not receiving pay at the time of delivery, are eligible for sale to Freddie Mac, as long as certain requirements are met.

Servicing

Forbearance eligibility. Government employees, and other workers directly impacted by the shutdown and loss of income due to the shutdown may be eligible for short-term forbearance, and short-term and extended unemployment forbearance, as long as all other eligibility requirements are met.
Impacts to credit and late charges. Borrowers on a forbearance plan as a result of the shutdown must:
- Not be reported to credit repositories.
- Not accrue or be charged late charges as long as they are following their plan’s requirements.
Government-issued mortgages. If you service Federal Housing Administration, Department of Veterans Affairs, and Rural Housing Service mortgages, refer to those government agencies for any requirements issued during the shutdown.
IRS Form 4506-T and 4506-EZ. In certain cases, Form 4506-T or 4506T-EZ must be processed by the IRS prior to evaluating a borrower for certain workouts. If it is not possible to obtain tax transcripts from the IRS, you must obtain a copy of the borrower’s most recent federal income tax return.

Get More Information

Read Guide Bulletin 2013-19 [PDF].
Review Guide Chapter 65, Reinstatements and Relief Options for Servicer information.
Contact your Freddie Mac representative.

To view the online bulletin, please click here.

FHFA To Review Force-Placed Insurance

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

On October 21, Mortgage Servicing News published an article titled FHFA Watchdog Opens Force-Placed Insurance Review.

FHFA Watchdog Opens Force-Placed Insurance Review

The watchdog agency charged with overseeing Fannie Mae, Freddie Mac and their regulator is planning a review of their efforts to rein in the cost of force-placed insurance, according to two sources familiar with the matter.

The outside probe will be conducted by the inspector general that oversees the Federal Housing Finance Agency, the GSEs’ regulator. It is unclear what exactly the review will cover, but it comes in the wake of the FHFA’s decision in February to kill a Fannie Mae plan that consumer advocates say would have sharply lowered the cost of force-placed insurance.

The FHFA has also faced recent criticism for hiring an insurance industry lobbyist to advise it on force-placed insurance matters.

A spokeswoman for the inspector general’s office said that the agency is “undertaking a survey of Fannie Mae’s and Freddie Mac’s force-placed insurance guidelines and reimbursements” and that it has notified FHFA of the inquiry.

“As we are in the preliminary stage of this review, neither the scope nor details have yet been determined,” the inspector general’s spokeswoman, Kris Belisle, said in an email Friday, responding to questions from American Banker.

Spokespeople for the FHFA, Fannie and Freddie declined to comment on the watchdog agency’s inquiry.

Force-placed insurance is a backup form of property insurance that banks buy when homeowners allow their voluntary policies to lapse, in order to protect the interests of mortgage investors. The product’s reputation has been marred by apparent kickback schemes, in which banks paid inflated prices for the insurance but got much of the money back through unearned commissions and other arrangements.

Some of the cost of the inflated premiums has been passed along to mortgage investors like Fannie and Freddie, and ultimately to U.S. taxpayers, since the federal government essentially owns the two mortgage giants.

The Fannie Mae plan would have provided homeowners insurance from Fannie’s own vendors, eliminating the ability of banks to collect payments by steering business to certain insurance companies. A proposal document obtained by American Banker earlier this year stated that the Fannie Mae proposal would have produced savings in excess of 30% for Fannie and homeowners.

But in February, the FHFA rejected Fannie’s plan.

The agency’s decision drew sharp criticism from consumer advocates, who alleged that the FHFA buckled under pressure from insurers and bankers.

“Incompetence or corruption. It’s got to be one or the other,” Robert Hunter, a consumer advocate and former Texas insurance commissioner, said shortly after the decision was announced.

The FHFA rejects those assertions but has been publicly vague about the reasons for its decision. For example, the FHFA’s acting director, Edward DeMarco, has stated that the agency rejected Fannie’s plan in favor of “a broader approach, bringing together federal and state regulators to participate in the dialogue with us and with a wide range of stakeholders.”

But privately the agency has argued that Fannie Mae’s process for developing its plan was not transparent enough, and has expressed concern about Fannie’s ability to transition to the new system, according to a source familiar with the FHFA’s rationale.

In March, the FHFA proposed regulations that would ban certain sales commissions and reinsurance arrangements that have allowed banks to recoup much of the money they paid in insurance premiums.

That proposal, which is seen by consumer advocates as something of a half-measure, because there it doesn’t ban every method of sharing profits between insurers and banks, has languished for months. An FHFA spokesperson declined Friday to commit to a timeline for finalizing the regulations.

To view the online article, please click here.

FHFA Prepared Remarks on “Getting Our House In Order”

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

On October 24, the Federal Housing Finance Agency (FHFA) released the prepared remarks of Edward J. DeMarco, acting director, titled Zillow and and the Bipartisan Policy Center: Getting Our House In Order.

Zillow and and the Bipartisan Policy Center: Getting Our House In Order

The Five-Year Anniversary of the Conservatorships of Fannie Mae and Freddie Mac: No Time to Celebrate

Thank you for inviting me to speak this afternoon. On September 6, our Nation reached the five-year anniversary of the establishment of the conservatorships of Fannie Mae and Freddie Mac, or as I will refer to them, the Enterprises.

Over those five years much has been accomplished. The Nation’s secondary mortgage market has continued to function. The Enterprises’ financial positions have stabilized. We have made significant progress resolving the pre-conservatorship book of business. The Enterprises have played an important role in providing foreclosure prevention and refinancing options to borrowers. And through the Federal Housing Finance Agency (FHFA) Strategic Plan for Enterprise Conservatorships (Strategic Plan), we have begun the process of building for a future housing finance system.

However, even with those accomplishments, much remains to be done. The single-family mortgage market remains heavily supported by taxpayers. While there is progress on the legislative front, the timing of broader housing finance reform remains uncertain.

Today I will provide a brief review of the failure of the Fannie Mae and Freddie Mac GSE business model, the steps FHFA has taken in the intervening five-years, and provide a look ahead at what to expect in the coming years if we remain without a legislative solution.

Please click on the link to view the remarks in their entirety:
Remarks of Edward J. DeMarco, Acting Director, Federal Housing Finance Agency, Zillow and the Bipartisan Policy Center: Getting Our House In Order, Washington, D.C.

FHFA Prepared Remarks at MBA 100th Annual Convention

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

On October 28, the Federal Housing Finance Agency (FHFA) released the prepared remarks of Edward J. DeMarco, acting director, at the Mortgage Bankers Association’s 100^th Annual Convention and Expo in Washington, DC.

An Update on the Conservatorships of Fannie Mae and Freddie Mac: Remarks at the MBA’s 100^th Annual Convention and Expo

Thank you for inviting me to speak this morning. I would like to start by congratulating
the Mortgage Bankers Association on this 100^th annual convention. That is quite a
history, one that traces from a much different and more limited, housing finance
system to one that creates far greater access to credit but that is recovering from a
nationwide trauma in housing.

The good news is that the recovery is taking hold. The opportunity for rebuilding our
housing finance system to a stronger, more competitive, and more resilient market is
before us. Yet challenges are all around us. Implementing an array of new mortgage
rules, many developed in response to the recent market and regulatory failures,
creates uncertainty as to cost and impact. And we have an opportunity to rebuild the
secondary mortgage market, but the political and policy challenges of that legislation
are numerous.

Over the past five years in which Fannie Mae and Freddie Mac, or the Enterprises as I
will refer to them, have been in conservatorships, much has been accomplished.
The Nation’s secondary mortgage market has continued to function. The Enterprises’
financial positions have stabilized. We have made significant progress resolving the
pre-conservatorship book of business. The Enterprises have played an important role
in providing foreclosure prevention and refinancing options to borrowers. And through
the Federal Housing Finance Agency (FHFA) Strategic Plan for Enterprise
Conservatorships (Strategic Plan), we have begun the process of building for a
future housing finance system.

However, even with those accomplishments, much remains to be done. The
single-family mortgage market remains heavily supported by taxpayers. While
there is progress on the legislative front, the timing of broader housing finance
reform remains uncertain.

Authority and Responsibilities of FHFA as Conservator

In 2008, the immediate objective or initial phase of the conservatorships was to stabilize
the Enterprises’ operations and ensure that the secondary mortgage market continued
to function.

As markets stabilized, the second phase of the conservatorships focused on
developing tools to assist troubled homeowners while reducing credit losses.

The next phase is determining our responsibility to direct the conservatorships going
forward. The law establishes the appointment of a conservator or receiver of the
Enterprises “for the purpose of reorganizing, rehabilitating, or winding up the affairs of
a regulated entity.”1 In fact, we are doing all three of these things – reorganizing,
rehabilitating, and winding up the affairs of Fannie Mae and Freddie Mac. This is
exactly the path we set forth last year when FHFA issued its Strategic Plan.

More specifically, FHFA set forth three broad goals in the Strategic Plan:

1. Build. Build a new infrastructure for the secondary mortgage market.

2. Contract. Gradually contract the Enterprises’ dominant presence in the marketplace while simplifying and shrinking their operations.

3. Maintain. Maintain foreclosure prevention activities and credit availability for new and refinanced mortgages.

We identified specific activities to achieve these goals in a Conservator’s Scorecard in 2012 and 2013 and much progress on those goals has been achieved.

But as time moves on, the scale of the Enterprises’ operations in conservatorship cannot remain static. As of December 31, 2012, the amount of taxpayer capital available to support the Enterprises’ outstanding debt and mortgage-backed securities (MBS) obligations is fixed. Limiting risk exposure is vital to maintaining the adequacy of the remaining capital support through the U.S. Department of the Treasury support agreements.

To view the remarks in their entirety, please click here.