Monday Morning Cup of Coffee: Fannie Mae to fine mortgage servicers
Fannie adds late fees and more mortgage news
Monday Morning Cup of Coffee takes a look at news across HousingWire's weekend desk, with more coverage to come on bigger issues.
Let’s regulate our way to prosperity! That seems to be the approach these days. Now comes the federalization of home appraisers.
The Federal Register last week announced the arrival of something the appraisal management industry has been waiting for months: the federal banking and finance regulatory agencies’ proposal of minimum standards for appraisal management companies.
The Dodd-Frank Act requires the just a few agencies – the Office Comptroller of the Currency, the Federal Reserve Bank, Federal Deposit Insurance Corp., Consumer Financial Protection Bureau and the Federal Housing Finance Agency – to adopt standards for states to apply in their registration and supervision of home appraisers.
States have already adopted their own standards over the past four years, but this is national.
Fannie Mae is going to start charging mortgage servicers for being late or inaccurate loan reports.
Starting May 1, Fannie Mae may assess a compensatory fee for these failures. Fees will vary based on the number of late instances, from as little as $50 to $15,000 on a per mortgage basis, increasing in severity with each late assessment.
"A servicer may be assessed the fees to reimburse Fannie Mae for the losses and damages that result from such servicing breaches, including reimbursement for Fannie Mae’s internal administrative costs in tracking, reporting, and correcting the errors," the note states.
Federal Reserve Chair Janet Yellen will speak Monday at a community reinvestment conference in Chicago on March 31. One wonders if she can conjure up another three magic words that move markets as loaded as “about six months.”
A federal judge in Manhattan has ruled that a group of international banks must face complaints that they violated the U.S. Commodity Exchange Act by manipulating yen-denominated interest rate benchmarks between 2006 and 2010, according to coverage in Reuters.
In an eponymous nod to Monday morning cups of coffee, it’s our duty to remind you that McDonald’s is offering free cups of coffee starting Monday. The fast food chain is offering the limited-time offer as a reaction to a brewing breakfast war with rivals.
A hefty long-term incentive award helped nearly double the compensation for Morgan Stanley’s chairman and chief executive, James P. Gorman, to $18 million for 2013, according to the New York Times.
The company’s stock price rose 64% in 2013, the article states, as the investment bank moved into more conservative business paths.
John Carney at the Wall Street Journal is shocked, shocked to find that the acres of banking regulations in effect may actually defeat their own purpose. It’s almost as if somehow rules written by people who either never worked in or who don’t understand an industry might have some kind of unintended consequences.
Worse, it suggests that human nature can’t be controlled by complex legislative fiat.
Carney’s look takes in the banking industry as a whole but the lesson for mortgage banking isn’t hard to fathom:
Under older rules, unrealized losses on available-for-sale securities didn't hit capital ratios. Starting in 2015, that will no longer be the case for banks with more than $250 billion of assets.
New liquidity rules add another wrinkle. They likely will require the largest U.S. banks to collectively hold about $2 trillion of liquid assets. So while banks will have to hold additional securities to meet the new requirements, volatility could cause swings in capital ratios. Shifting assets into held-to-maturity buckets helps banks sidestep this problem.
The FDIC did not takeover the assets of any banks this weekend.