Subprime Loans
By Ryan Schuette | 05/14/2012
Residential Capital LLC, the embattled mortgage subsidiary of Ally Financial, filed Chapter 11 Monday, with Nationstar Mortgage Holdings Inc. set to acquire it. The Detroit-based company framed the move as a way to shave losses, repay taxpayers, and preserve its position as an auto lender. Lewisville, Texas-based Nationstar said in a separate announcement that it would acquire ResCap, with the purchase including $374 billion in mortgage servicing assets and $201 billion in primary residential mortgage servicing rights.
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By Ryan Schuette | 03/30/2012
Fannie Mae and Freddie Mac entered federal conservatorship in 2008, as lawmakers and presidents stepped in to stymie a freefall for the nation’s largest mortgage companies, just as words like subprime and systemically important institutions gained traction for the public. Four years and roughly $180 billion in taxpayer funds later, old hands, regulators, and freshman lawmakers alike struggle with a vexing riddle. How can a system polarized by politics safely shrink companies responsible for more than $11 trillion in mortgages without blowing the recovery – and what will it mean for mortgage finance?
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By Ryan Schuette | 03/16/2012
Consumer Financial Protection Bureau director Richard Cordray told a gathering of the nation's editors and journalists Friday that the agency needs their help to make consumers more aware of predatory lending hurdles. He highlighted efforts by the CFPB to increase transparency in the markets, underscored the role undertaken by lenders in the crisis, and played up the need for more regulation for servicers. The address by Cordray is the latest in a round of public appearances by the CFPB director, newly appointed by President Barack Obama in January.
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By Ryan Schuette | 03/07/2012
The inspector general of the Federal Housing Finance Agency released a report Tuesday that criticizes the agency, Fannie Mae, and Freddie Mac for a series of ongoing oversight problems with mortgage servicers. The document charges that the FHFA failed to implement service guidelines for the mortgage company last year and portrays today’s environment as one in which the agency, GSEs, and servicers all punt responsibility down the ladder. It also alleges that Fannie Mae and Freddie Mac routinely fail to swap servicer information.
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By Ryan Schuette | 03/02/2012
Moody’s Investor Service slashed credit ratings for Wells Fargo Home Mortgage Thursday over concerns about deterioration in the quality of prime and subprime loans. The ratings agency downgraded the servicer from SQ1 to SQ2+. When reviewing residential mortgage servicers, Moody’s rates SQ1 as strong and SQ5 as weak, with modifiers like pluses and minuses signifying their relative strength and weakness in each category. Moody’s cited the $25-billion settlement as one reason why, saying that added public pressure over negotiations lengthened foreclosure timelines.
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By Ryan Schuette | 02/20/2012
Residents of Connecticut will receive $190 million from the historic $25-billion settlement with five servicers, according to the office of the state attorney general.
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By Ryan Schuette | 02/20/2012
Addressing Congress and the nation in January, President Barack Obama unveiled a so-called financial fraud unit that would pursue securities fraud from before the financial crisis and provide relief to homeowners. The unit – later described by officials as the Residential Mortgage-Backed Securities Working Group – will coordinate casework and investigations at the state and federal level. MReport speaks with experts from the legal field and servicing industry to gauge their thoughts about the new unit. The consensus: It could shake up market confidence.
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By Ryan Schuette | 02/17/2012
The Obama administration unveiled a budget for the next fiscal year that proposes levying fees for the nation’s largest banks, selling off government-occupied real estate, and expanding services for the Federal Housing Administration. The $3.8-trillion budget calls for a Financial Crisis Responsibility Fee to offset costs to the Troubled Asset Relief Program and mass refinance program. If passed by Congress, the fee would raise $61 billion from financial institutions with $50 billion or more in assets over the next decade. The fee draws on recent themes from the president.
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By Ryan Schuette | 01/30/2012
A new federal task group set up to investigate residential mortgage-backed securities fraud made progress Friday when officials signed off on subpoenas for 11 undisclosed financial institutions. Numerous high-ranking federal officials joined New York Attorney General and co-chair Eric Schneiderman at a press conference to outline the Residential Mortgage-Backed Securities Working Group, which President Barack Obama announced he would form during his State of the Union address Thursday.
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By Ryan Schuette | 01/25/2012
President Barack Obama used his State of the Union address Wednesday to tout his accomplishments and propose several new housing ventures, including possible expansions to refinance programs, consumer financial protection, and new federal initiatives to combat abusive lending practices. The speech weighed in on risky lending practices in particular and went after Republicans for their opposition to his policies, including consumer financial protection. Experts remain on the sidelines about an expanded refinance program.
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