Acting Comptroller of the Currency, John Walsh spoke before the Committee on Banking, Housing and Urban Affairs Thursday, about the challenges facing his office in adapting to the Dodd-Frank Act — citing the transition as a "mammoth effort."

His sentiment was reiterated in a letter to Congress from the National Association of Federal Credit Unions.

"The additional requirements imposed by Dodd-Frank have created an overwhelming number of new compliance burdens, which will take credit unions considerable time and effort to resolve," the letter said. "A slightly longer period for implementation of Dodd-Frank — up to 24 months — would help alleviate some of these burdens and give credit unions more time to comply."

Walsh said the biggest task right now is integrating the Office of Thrift Supervision into the Office of the Comptroller of the Currency, which requires the OCC to not only revise its rules, but review and republish the rules for the OTS also.

The OCC duties under the bill also include supporting the Financial Stability Oversight Committee, whose first meeting is scheduled for tomorrow. Walsh expects that under Basel III, will help advance the Dodd-Frank Act and help absorb some of the present challenges.

The NAFCU, however, sent its own list of recommended changes and potential provisions for Congress to consider, including changes to the appraiser independence standard (mandatory reporting requirements on credit unions and other lenders who believe an appraiser is behaving unethically or violating applicable codes and laws, with heavy monetary penalties for failure to comply) and the Bureau of Consumer Financial Protection's power to preempt consumer protection rules.

Write to Christine Ricciardi.

[Update 1: adds comment from Bank of America]

Ambac Assurance Corporation, the guarantor of structured finance obligations for Ambac Financial Group Inc. (ABK: 0.00 N/A), is suing Bank of America Corporation (BAC: 7.29 -0.14%) over losses associated with fraudulent mortgages allegedly originated and sold as securities by Countrywide Financial.

Ambac claims it was mislead about the quality of loans the monoline insured as securities between 2004 and 2006. Bank of America took over Countrywide in 2009.

According to the Ambac complaint filed on Tuesday, the firm engaged in 12 transactions with Countrywide consisting of more than 268,000 loans, which served a total collateral of about $16.7 billion.

Ambac decided to review its portfolio after masses of loans began to default. The filing said that, to date, over 35,000 loans ($1.95 billion) have defaulted or been charged-off, costing Ambac $466 million in claim payments.

Ambac has so far reviewed 6,533 Countrywide loans, 97% of which it found did not comply with the failed institution's representations and warranties.

"Countrywide's loans did not bear the represented attributes or conform to Countrywide's own underwriting guidelines," the filing said, "And in many cases were made to borrowers with little or no ability to repay their loans."

Ambac Financial recently made announcements that it could potentially go bankrupt after state regulation prohibited Ambac Assurance from paying dividends to its holding company. The state of Wisconsin requires a company's capital to level with its surplus. Ambac's capital, as a result, fell below par.

Managing director for investor relations at Ambac, Peter Poillon, said he couldn't directly attribute Ambac's bankruptcy to the deals with Countrywide. He told HousingWire "because of our exposure to those transactions and others, Ambac Assurance is no longer able to issue those cash dividends to holding company."

Bank of America said it had no comment about the subject.

Write to Christine Ricciardi.

Disclosure: The author holds no relevant investments.

After more than two years since being created, the Federal Housing Finance Authority has an inspector general. The U.S. Senate confirmed the nomination of Steve Linick, a longtime federal prosecutor, to the post Wednesday.

The IG serves as independent oversight over the agency and is authorized to conduct criminal investigations. Linick is a career federal prosecutor with the Department of Justice. He recently served as both the executive director of the National Procurement Fraud Task Force and deputy chief of the fraud section, criminal division at the department. Linick has also been the primary contact at DOJ for contract fraud cases relating to the wars in Iraq and Afghanistan. Previously, he was an assistant U.S. attorney in California and Virginia.

Acting Director Edward DeMarco said he's pleased Linick will be the agency's first IG.

"The Office of the Inspector General has the important task of reviewing our operations as an agency to promote the efficiency and effectiveness of our operations, to prevent and detect fraud and abuse, and to keep agency management informed about agency problems and deficiencies," he tells HousingWire. "I look forward to having the benefit of this review."

Linick was nominated to this post twice. President George W. Bush nominated him in 2008, but the nomination died after the former president left office.

The position has been vacant since July 2008. The Housing and Economic Recovery Act of 2008 dissolved the Federal Housing Finance Board and created the FHFA. Because inspectors general have to be appointed by the president and confirmed by the U.S. Senate, former FHFB Inspector General Ed Kelley could not temporarily fill the new position.

Sarah Mueller is an editorial assistant with HousingWire.

A judge dismissed a host of claims against Washington Mutual Asset Acceptance Corp. but kept active seven claims that the WaMu subsidiary disregarded general underwriting standards for loans that backed certificates sold to trust funds between 2006 and 2008.

Judge Marsha Peachman of the U.S. District Court for the Western District of Washington upheld claims worth $10.8 billion.

The Plaintiffs, Boilermakers Nationally Annuity Trust Fund and Doral Bank, allege that WaMu Asset Acceptance Corp., a subsidiary of WaMu Inc., misrepresented the quality of loans that backed such certificates.  The complaint was brought on behalf of Boilermakers, Doral and others who purchased interests in WaMu mortgage pass-through trusts. WaMu issued mortgage pass-through certificates for MBS from more than 75,608 sub-prime, first-lien hybrid adjustable mortgage rate loans in 36 public offerings.

Claims pertaining to losses on 25 certificates were dismissed because the judge ruled plaintiffs lacked standing to sue for losses related to certificates for which they have failed to identify a purchaser. The court also dismissed claims against rating agencies Moody’s Investor Services and McGraw Hill Cos. Dismissed claims included those that WaMu skewed the loan-to-value ratios to meet certain target values. The court ruled that allegations that WaMu's credit ratings were misleading were "similarly insufficient" because the plaintiffs failed prove data was materially omitted.

Claims against WaMu's underwriting compliance, purchase and sale agreements, and risk disclosures were upheld and will move to a federal trial. The court order said the "Plantiffs' underwriting allegations survive dismissal because the statements may be misleading if they mask the extent to which the sponsor's underwriting guidelines were disregarded. In essence, plaintiffs allege the underwriting standards ceased to exist." The plaintiffs' claims of economic loss were also validated.

Steven Toll, the co-lead counsel on the plaintiff side, expressed hope for winning the case after hearing the courts denial of dismissal.

"This decision is  good news for investors," said Toll, partner at Cohen Milstein Sellers & Toll.  "While we are disappointed that the court dismissed a number of offerings from the case, we are gratified that the court has permitted the prosecution of this case to go forward."

Write to Christine Ricciardi.