Reverse

Fed Files Response in LO Comp Appeal

The Federal Reserve Board (Fed) has filed their response to the appeal in the Loan Originator Compensation rule lawsuit.  After trial Judge Beryl Howel denied the request for a preliminary injunction temporarily halting the implementation of the rule, the National Association of Mortgage Brokers (NAMB) and the National Association of Independent Housing Professionals, Inc (NAIHP) immediately filed an appeal with the U.S. Court of Appeals.   In the response, the Fed addresses the three areas that NAMB and NAIHP used to support their claim in the appeal.  The first key point is whether the Fed exceeded their authority to
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Risk Manager Named Acting Head of FHA

Robert Ryan, the Risk Manager of the Federal Housing Administration (FHA) has been tapped to be the Acting Commissioner following the exit of David Stevens.  Stevens announced his resignation in early March announcing his plans to join the Mortgage Bankers Association as chief executive.   Stevens had been expected to leave the agency at the end of April, but the HUD website is already showing Ryan as Acting Commissioner.  Concerns about potential conflicts of interest related to MBA's interactions with the FHA while he was still serving as Commissioner may have pushed up his departure date. Ryan became the
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Temporary Stay in LO Comp Suit

The U.S. Appeals Court for the District of Columbia issued a temporary stay, delaying the implementation of the Loan Originator Compensation rule for five days.  The stay provides the Appeals Court sufficient time to consider the emergency motion for expedited relief and the emergency motion to stay implementation of the final rule.   In the order, the Appellate Court was very cleat that the stay in no way can be construed as any type of ruling on the merits of the case, it is only to provide an opportunity for the parties to respond to the motions and for
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The March 2011 Issue

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Eight Bills Introducted to Address GSE Reform

Republican member of the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises have introduced a series of eight bills aimed at reforming Fannie Mae and Freddie Mac.  Rather than seeking comprehensive reform, the bills indicate an approach to tackle various issues individually. Presenting a review of the eight bills, Rep. Scott Garrett, Chairman of the Subcommittee noted that this is the first round in what will likely be multiple rounds of very specific and targeted bills that will serve to formally wind down the GSE's and support a housing finance market dominated by private capital. An overview
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Fed Wins Round 1 in LO Comp Suit

After receiving written briefs and listen to oral arguments in the lawsuit against the Loan Originator Compensation rule, Judge Beryl Howell denied the plaintiffs motion seeking a temporary restraining order and preliminary injunction against the implementation of the rule. In denying the motion in a 46 page ruling, Judge Howell noted that granting the preliminary injunction requires the plaintiff to establish a high likelihood of success in their lawsuit, stating that they failed to show that the Rule was issued without authority or is arbitrary or capricious.  It is important to note that this ruling is not a determination
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Feature: Craig Corn Challenges the Industry to Seize Opportunities

The recent announcement by Bank of America of their plans to exit the reverse mortgage business came as a shock to many in the industry, and has caused concern about the strength of the industry and the HECM products. Their exit also shines a spotlight on MetLife Bank as an industry leader in both the wholesale and retail channels. MetLife Bank will inevitably need to step up, visibly increasing their leadership role, and fill the void created. In light of this announcement and the ongoing period of rapid regulatory change within the reverse mortgage industry, I had the opportunity to
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Six Federal Agencies Propose Rule on Risk Retention

The Federal Reserve, in conjunction with five other regulatory agencies, has put forth a proposed rule requiring that sponsors of asset-backed securities (ABS) retail at least 5 percent of the credit risk associated with the underlying assets.  The proposed rule exempts ABS that are U.S. government guaranteed and mortgage backed securities (MBS) that are comprised exclusively of "qualified residential mortgages" (QRMs). The goal of the proposed rule suggests that banks and other issuers of securitized loan will have a greater incentive to monitoring the quality of the loans securitized if they are required to retain a certain amount of
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Trade Groups Offer Guidance on Housing Finance Reform

Sixteen housing and financial trade associations have joined forces to issue guidance to policy makers on housing finance reform.  The document, "Principles for Restoring Stability to the Nation's Housing Finance System." was issued on Monday and calls on regulators and government officials to exercise care in debating the options for restoring strength and vitality to the housing finance market. Issued to congressional and administration offices, the statement offers a set of four overriding principles that should guide legislators and regulators in putting forth steps to repairing the nation's housing finance system.  The principles suggest that government officials must cognizant
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Hearing Held on Temporary Halt of LO Comp Rule

In a hearing in U.S. District Court on Tuesday, attorneys for the plaintiffs provided arguments supporting a temporary restraining order and preliminary injunction ceasing the implementation of the Loan Originator Compensation rule on Friday, April 1, 2011.  The National Association of Mortgage Brokers (NAMB) expressed confidence that the hearing provided them the opportunity to respond to questions posed by Judge Beryl Howell. “NAMB representatives were given the opportunity to present proof before Judge Howell and provide her with additional information to delay the FRB’s rule on LO compensation and grant an injunction,” said Mike Anderson, CRMS of Essential Mortgage,
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