A look at the stories on HousingWire’s weekend desk…with more coverage to come on bigger issues: The US Department of Housing and Urban Development (HUD) on Friday said the Mortgagee Review Board will “exercise restraint” in the first four months of 2010 when it comes to enforcing the Real Estate Settlement Procedures Act (RESPA). The Board directed staff members to exercise constraint in considering actions against Federal Housing Administration (FHA)-insured lenders that demonstrate good faith efforts to comply with RESPA’s new requirements, which take effect January 1. Under the new rules, HUD said it will require lenders and brokers to provide customers with a standard good faith estimate (GFE) disclosing key loan terms and closing costs on and after January 1. Closing agents will also be required to provide borrowers a new HUD-1 Settlement statement comparing borrowers’ final and estimated costs. As long as lenders, brokers and settlement service providers are making good faith efforts to adhere to the new rules, HUD will exercise constraint in enforcing the rules during the initial four months of 2010. HUD is encouraging other regulating agencies to exercise the same restraint over the first 120 days of 2010 for non-FHA lenders, originators and settlement service providers that demonstrate good faith efforts to implement RESPA’s rules, according to a HUD press release Friday. “We will work with those who are making an honest effort to work with us as we implement these important new consumer protections,” said HUD secretary Shaun Donovan. “While we will not delay implementation of RESPA’s new requirements, we are sensitive to the concerns of the industry as it integrates these new rules into their day-to-day business practices.” The new RESPA rule became effective Jan. 16, 2009 but provided a one-year transition period for the industry to incorporate the changes. Regulators shuttered another three banks Friday, bringing the total to 123 failed banks so far in 2009. The closures put $3.56bn of assets and $2.86bn of deposits on the line for sale or disposition. They cost the Federal Deposit Insurance Corp.‘s (FDIC) deposit insurance fund $986.4m. The Florida Office of Financial Regulation shut down Orion Bank with $2.1bn of deposits and $2.7bn of assets, while the Office of Thrift Supervision (OTS) shut down Century Bank with $631m in deposits and $728m of assets. IBERIABANK assumed Orion’s and Century’s deposits at a 1.5% discount, $2.4bn of Orion’s assets and $706m of Century’s assets. FDIC and IBERIABANK entered loss-share agreements on $1.9bn of Orion’s assets and $656m of Century Bank’s assets. Orion Bank’s closure cost the FDIC’s insurance fund $615m, while Century Bank’s closure cost $344m. The Office of the Comptroller of the Currency (OCC) closed Pacific Coast National Bank with $130.9m of deposits and $134.4m of assets. Sunwest Bank assumed all of Pacific Coast’s deposits at no premium, as well as “essentially all” of the assets. The bank’s failure cost the FDIC’s deposit insurance fund $27.4m. A study by the National Association of Realtors (NAR) revealed Friday that first-time homebuyers reached the highest market share of all sales transactions as prospective buyers took advantage of the first-time homebuyer tax credit, which was recently extended months beyond its initial November 30th expiration date. First-time homebuyers made up 47% of all home sales, from 41% in last year’s study, NAR said. The first-time buyers’ share of transactions was the highest on record dating back to 1981, with the previous high coming in at 44% of sales transactions in 1991. The New York Federal Reserve Bank late last week disclosed details of another $13.5bn of net agency mortgage-backed securities (MBS) purchases, after $31.79bn of sales the same week ending November 5. The week’s purchases bring total net purchases slightly past the $1trn mark, according to research by Barclays Capital (BarCap). So far, the Fed purchased $331.86bn of MBS from Freddie Mac (FRE), $591.65bn of MBS from Fannie Mae (FNM) and $83.11bn of MBS from Ginnie Mae. BarCap researchers on Friday confirmed industry reports that the commercial MBS-eligible branch of the Term Asset-Backed Securities Loan Facility (TALF) will soon see a new issuance. The deal, DDR I 2009, is worth $400m and is collateralized by a pool of 28 retail properties across 19 states, according to BarCap. From the weekly commentary:
“We believe the deal is a crucial first step in restarting the private-label CMBS market, which has been closed since June 2008, and channelling a much-needed source of capital to the CRE universe. However, we caution against extrapolating too much of the success of newly underwritten and issued CMBS bonds, such as the DDR deal, to legacy bonds. We agree with the sharp divergence in pricing between CMBS 2.0, ie, bonds issued post-bubble, and the legacy CMBS from recent vintages. In CMBS 2.0, we believe traditional relative value analysis versus other high quality sectors—including heavily seasoned CMBS, consumer ABS, and investment grade corporates—is more relevant.”
Write to Diana Golobay.
