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  • Ocwen cleared of wrongdoing in multi-billion dollar mortgage bond fight

    Early in 2015, a group of mortgage bond investors that reportedly included BlackRock, MetLife, and Pimco accused Ocwen Financial of violating its duties as a mortgage servicer by failing to properly collect payments on $82 billion of home loans thereby costing the investors $26 billion. Now, after a yearlong independent investigation found no evidence of the litany of allegations made by the investors, Ocwen is off the hook. Click the headline for the whole story.

QRM would have cut out 39% of homebuyers in 2010: CoreLogic

Roughly 39% of homebuyers in 2010 made a downpayment of less than 20%, loans that may not have been made had the current risk-retention proposal been in place, according to data from CoreLogic (CLGX). Regulators proposed a rule in March requiring lenders to maintain 5% of the credit risk on loans, including mortgages, that are packaged into securities. The exception is the qualified residential mortgage, which among other standards, must include a 20% downpayment from the borrower. While rule makers intended the QRM to maintain a narrow slice of the market, a variety of trade groups and lawmakers began an effort to lower that downpayment figure. But even if it was lowered to 10%, as Federal Housing Administration Acting Director Bob Ryan suggested to Congress, the impact would still be widespread. Nearly 25% of homebuyers in 2010 paid less than 10% down, CoreLogic said. "While clearly higher down payments are necessary and will reduce longer-term risk, using the consensus 20% down payment scenario, it will lead to more sluggish sales in some states in the short-term," CoreLogic said. Nevada would be the most affected. The state has not only the highest foreclosure rate, but the lowest number of 80% loan-to-value mortgages, meaning the borrower had at least 20% equity in the home. In 2010, only 20% of Nevada borrowers met the QRM requirements. Other states such as Arizona, Florida and Georgia would be affected as well. But states like New York, Hawaii and North Dakota had a relatively high percentage of borrowers with at least 20% down. A group of 15 trade groups including the Mortgage Bankers Association and the National Association of Realtors sent a letter to regulators late last week asking to delay the risk-retention rule by roughly one month. Regulators are reviewing the request. The comment period is currently scheduled to end June 10. Write to Jon Prior. Follow him on Twitter @JonAPrior.

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