Judge throws out Fannie and Freddie investors’ lawsuit

More signs of a sliding housing market

Affordability has issues, too

Fannie: Millennial housing demand declines further

Fall comes even as housing affordability for young improves
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Monday Morning Cup of Coffee

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A look at news across HousingWire's weekend desk, with more coverage to come on bigger issues: Hacker group Anonymous, linked to web attacks on firms deemed critical to the website WikiLeaks, threatened Saturday to release sensitive emails from Bank of America (Tweet below). The group is unaffiliated with the WikiLeaks website. In a following tweet, the group said it will release the emails unless their "demand" is met: "Release Pfc. Bradley Manning and I will remove every #BoA Employee from the Emails," the tweet stated. Manning is in the Army and was arrested in May for allegedly leaking classified information to Wikileaks. In November, WikiLeaks began publishing 251,287 leaked U.S. embassy cables, "the largest set of confidential documents ever to be released into the public domain," the website maintains. A former Fannie Mae executive received a Wells notice from the Securities and Exchange Commission, regarding an investigation into how the company disclosed its subprime mortgage exposure for bond investors, Bloomberg reported late Friday. Daniel Mudd led Fannie from 2004 until the government put the mortgage finance giant into conservatorship in September 2008. The SEC has been investigating the government-sponsored enterprise for years. Last July, a House committee named Mudd as one of a handful of former executives of the GSEs that benefited from VIP loans handed out beleaguered mortgage lender Countrywide Financial. In late 2008, lawmakers berated Mudd for ignoring signs of potential problems while continuing to make risky investments. Mudd has been chief executive of Fortress Investment Group (FIG), a hedge fund, since August 2009. He told Bloomberg he plans to provide the SEC with a written defense to the noticed. "As the executive responsible for initially registering Fannie Mae with the SEC, and having led the company through the SEC-mandated restatement, I have the highest respect for the Commission. Nevertheless, I could not disagree more with this turn of events," Mudd said in a letter to Bloomberg. In early February, Anthony "Buddy" Piszel, chief financial office of CoreLogic (CLGX), resigned after receiving a Wells notice from the SEC , regarding disclosure matters while he was employed at Freddie Mac. Sen. David Vitter, R-La., and Sen. John Tester, D-Mont., sent a letter to Federal Reserve Chairman Ben Bernanke asking him to delay implementing new loan originator compensation rules. Mortgage trade groups last week filed suit seeking the same action. The senators claim the new regulations, which are part of the Truth in Lending Act and effective April 1, will increase concentration in the mortgage finance market, create more uncertainty for small lenders and further impede home loan origination. They said the Fed hasn't given small mortgage lenders and community banks enough guidance about the new regulations and left these financial institutions "in limbo, unable to effectively design compliance compensation systems." Vitter and Tester also said the compensation rule coupled with reforms under Dodd-Frank could devastate the mortgage market because large lenders may not be willing to assume risks associated with acquiring loans from smaller banks. The senators cite the Fed's recent decision to delay finalizing parts of Regulation Z before the Consumer Financial Protection Bureau comes on line, as evidence in the patient approach. "It would make sense to apply the same standard to this case to ensure new rules on one segment of the mortgage finance industry do not create perverse unintended incentives," they said. The senators want the Fed to wait "until the provisions can be better coordinated with forthcoming TILA regulations and the impacts of loan concentration can be more thoroughly studied." Meanwhile, the Federal Open Market Committee meets Tuesday and will announce its latest monetary policy decision. It's expected the central bank will keep the federal funds rate at next to nothing and reiterate its intention to continue its bond buying program through June. The program, which has become known as QE2, reinvests proceeds from maturing securities into longer-term Treasury securities. Also Tuesday, the National Association of Home Builders reports its housing market index for February. Then on Wednesday, the Commerce Department reports data on housing starts for February. Starts rose 14.6% to 596,000 in the first month of 2011. Analysts polled by Econoday produced a consensus estimate of 560,000 for February with projections ranging between 540,000 and 590,000. Moody's Investors Service downgraded billions of dollars of mortgage-backed securities once again last week. Earlier this year, the rating agency changed criteria for the residential MBS issued prior to 2005, which has resulted in numerous downgrades across all categories in hundreds of tranches in hundreds of transactions. One example from last week was Moody's lowered ratings on 128 tranches of subprime residential mortgage-backed securities from 24 deals issued by Bear Stearns between 1999 and 2004. Moody's continues to downgrade these bonds, lowering ratings in deals from issuers, such as Wells Fargo (WFC) and Carrington, late Sunday afternoon. Two banks closed Friday. The Federal Deposit Insurance Corp. estimates the total cost to its deposit insurance fund at $70 million. Nearly 300 financial institutions failed in 2009 and 2010, and now 25 banks have failed so far in 2011. The Office of the Comptroller of the Currency closed The First National Bank of Davis, Okla. The FDIC signed an agreement with The Pauls Valley National Bank of Pauls Valley, Okla., for all the deposits at a 7.5% premium and about one-third of the assets of the failed bank. At the end of 2010, the one branch of The First National Bank of Davis had $90.2 million of assets and $68.3 million in deposits. The Wisconsin Department of Financial Institutions closed Legacy Bank of Milwaukee, and the FDIC agreed to have Seaway Bank and Trust Co. of Chicago assume all the deposits and most of the assets. As of Dec. 31, the sole Legacy Bank branch reported $190.4 million to total assets and $183.3 million in deposits. Write to Jason Philyaw.

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