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Category Archives: Fannie Mae/Freddie Mac

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Loan Modification and the Failure to Mitigate Damages

By Anthony Narula and Philip R. Stein on Posted in Fannie Mae/Freddie Mac, Mortgage Repurchase

Freddie Mac Streamlined Modification Freddie Mac has announced the immediate implementation of its Streamlined Modification program, a no-document modification program offered to severely delinquent borrowers.  The implementation of the program, originally set to begin July 1, came six weeks earlier than expected in an effort to expedite financial relief for potentially thousands of distressed families. Under… Continue Reading

Big Banks Fail 2012 Fannie Mae Star Program

By Philip R. Stein on Posted in Fannie Mae/Freddie Mac, Too Big to Fail

Fannie’s Star Program reveals big banks failed to meet minimum mortgage servicer performance requirements According to a report released Tuesday by Fannie Mae, the big banks who love to act like “injured innocents” when it comes to making mortgage repurchase and indemnification demands on loan originators had their own substantial problems servicing the loans that they… Continue Reading

President Obama Touts Refinancing Plan in State of the Union Address

By Sacha Boegem and Robert Siegel on Posted in Fannie Mae/Freddie Mac, Legislation/Regulation

The Responsible Homeowner Refinancing Act of 2013 In his State of the Union Address on February 12, 2013, President Obama called on Congress to make it easier for families to refinance their mortgages. Specifically, the President urged Congress to pass refinancing legislation being sponsored by Sen. Robert Menendez (D., N.J.) and Sen. Barbara Boxer (D.,… Continue Reading

New Fannie Mae Guidelines

By Russell Koonin and Robert Siegel on Posted in Fannie Mae/Freddie Mac, Mortgage Repurchase

Verification Of Income Not Required For Refinancing Fannie Mae recently released a program offering an alternative to documenting income for Refi Plus loans where the change in the amount of the monthly loan payments will not exceed 20 percent. Fannie Mae will now accept verification of liquid financial reserves equal to at least 12 months… Continue Reading

FHFA Announces Representation and Warranty Framework

By Andrew Pompa and Philip R. Stein on Posted in Fannie Mae/Freddie Mac, Legislation/Regulation, Mortgage Repurchase, Too Big to Fail

Lack of Certainty Facing Lenders Last week, the Federal Housing Finance Agency (FHFA) announced a new “representation and warranty framework” for conventional loans sold or delivered to Fannie and Freddie after January 1, 2013. In a clear acknowledgment of the lack of certainty facing lenders in this era of rampant repurchase demands, the agency’s announcement… Continue Reading

Bank of America Won’t Quit While It’s Ahead

By Robert Siegel and Philip R. Stein on Posted in Fannie Mae/Freddie Mac, Too Big to Fail

BofA’s About Face on Global Resolutions In previous posts, we highlighted our concerns related to Bank of America’s “repurchase” demands asserted against residential mortgage loan originators. We knew that for years, BofA steadfastly refused to entertain global resolutions of its repurchase claims. Then, beginning in early 2012 and continuing to this day, BofA became hell… Continue Reading

The FHFA’s New Buy-Back Statement

By Philip R. Stein and Robert Siegel on Posted in Fannie Mae/Freddie Mac, Mortgage Repurchase, Residential Mortgage-Backed Securities (RMBS)

Higher Degree of Certainty and Clarity? The Federal Housing Finance Agency, the regulator of Fannie Mae and Freddie Mac, released a statement yesterday saying it was working with those two entities, which are the nation’s major government-backed mortgage securities investors, to “provide lenders a higher degree of certainty and clarity around repurchase exposure and liability… Continue Reading

Bank of America Lowers Reserves in Response to Buy-Back Demands

By Andrew Pompa and Philip R. Stein on Posted in Fannie Mae/Freddie Mac, Mortgage Repurchase, Too Big to Fail

Hard Stance? Bank of America has lowered its reserves established for payments in response to mortgage buy-back demands. The announcement, coming in the banking giant’s quarterly earnings report, indicates BofA set aside less money in the first quarter of 2012 to cover the cost of “repurchase” demands than it had at any time since the… Continue Reading

Future With Fannie and Freddie Lesser Evil Than With Wall Street?

By Russell Koonin and Robert Siegel on Posted in Fannie Mae/Freddie Mac, Mortgage Repurchase, Residential Mortgage-Backed Securities (RMBS), Too Big to Fail

A Rare Point of Agreement Margaret Chadbourn of Reuters recently reported {April 23} that both Republicans and Democrats have “found a rare point of agreement.” They want to phase out or at least substantially reduce the role of the Federal National Mortgage Association (Fannie Mae ) and the Federal Home Loan Mortgage Corporation (Freddie Mac… Continue Reading

Mortgage Loan Repurchase Claims: Not That Different from Other Contract Claims

By Philip R. Stein and Robert Siegel on Posted in Fannie Mae/Freddie Mac, Mortgage Repurchase, Too Big to Fail

Aggregator Banks and Repurchase or Make Whole Claims As most correspondents/originators are now painfully aware, aggregator banks are unleashing a barrage of “repurchase” or “make whole” claims related to loans sold by the correspondent years ago. The aggregators cite supposed loan level breaches of representations and warranties in the applicable mortgage purchase and sale agreement or… Continue Reading

Big Banks Increase Reserves in Anticipation of Buyback Demands

By Philip R. Stein and Andrew Pompa on Posted in Fannie Mae/Freddie Mac, Mortgage Repurchase, Too Big to Fail

The big banks are gearing up for an aggressive buyback season. We’ve recently learned that CitiGroup and Wells Fargo have set aside their largest reserves to date to cover new “repurchase” issues. Many expect insistent demands to rain down from Fannie and Freddie, as the mortgage giants face looming statute of limitations cut-offs for such claims.

Bank of America Responds to Fannie Mae’s Pressure To Cover Losses

By Philip R. Stein and Robert Siegel on Posted in Fannie Mae/Freddie Mac, Mortgage Insurance, Mortgage Repurchase, Too Big to Fail

As described on TheNicheReport.com last week, the rising number of allegedly flawed mortgage loans sold to Fannie Mae by Bank of America has created a rift between these two behemoths, each of which was bailed out by the U.S. government when the American real estate bubble burst.  Now, Fannie Mae is pressuring lender Bank of America to cover… Continue Reading

Bank of America to Mortgage Originators on Buyback Claims: “Heads I Win, Tails I Still Win”

By Robert Siegel and Philip R. Stein on Posted in Fannie Mae/Freddie Mac, Mortgage Repurchase, Residential Mortgage-Backed Securities (RMBS), Too Big to Fail

Bank of America (aka BofA) has decided to stop selling mortgages to Fannie. (Check out David Benoit’s recent Wall Street Journal blog post.) This development underscores yet another reason why mortgage loan originators should be extremely hesitant to enter into big-dollar “global” settlements with BofA. Estimated Future Losses A large component of the “damages” that BofA… Continue Reading