- The Consumer Financial Protection Bureau has launched an Online Guide for Real Estate Professionals to understand their obligations under the new “Know Before You Owe” mortgage disclosure rules, which become effective October 3, 2015. The Know Before You Owe mortgage initiative is designed to empower consumers with the information they need to make informed mortgage choices. It includes the implementation of the TILA-RESPA (Truth in Lending Act – Real Estate Settlement Procedures Act) Integrated Disclosure rule. The new rule primarily does two things, first it consolidates some of the disclosures that must be made unto fewer forms and second it changes the timing of certain activities in the mortgage lending process.
- Fannie Mae and Freddie Mac have announced an auction of Non-Performing Loans (NPLs) in the amount of 1.2 billion and provided details for bidder pre-qualification and servicer requirements. The reasons for the program are fourfold: 1. reduce illiquid assets, 2. encourage broad investor participation; 3. consider borrower outcomes; 4. a well controlled transparent process.
- The New York City Council has passed three Tenant Buyout Bills which were designed to protect tenants from landlords who want them out of rent stabilized apartments.
- The Bills are: Intro 682 – buyout offered in a threatening manner are an act of harassment. This includes untoward language, odd hour contact, frequent contact, and abusive contact.
- Intro 700 – requirement of a writing to memorialize the buyout offer, this writing must include important facts including the tenant’s right to seek legal representation and the right to refuse.
- Intro 757 – Bars repeated buyout offers by making such behavior a form of harassment when the tenant has indicated she/he is not interested.
Tag Archives: non-performing loans
Watt’s up with Fannie and Freddie
There has been a lot of press coverage of FHFA Director Watt’s first public speech since taking on his job. Watt emphasized that
we must ensure that Fannie Mae and Freddie Mac operate in a safe and sound manner. It means that we’ll work to preserve and conserve Fannie Mae and Freddie Mac’s assets. And it means that we’ll work to ensure a liquid and efficient national housing finance market. Our job at FHFA is to balance these obligations . . ..
He also set forth three goals for his FHFA:
Strategic Goal 1: MAINTAIN, in a safe and sound manner, foreclosure prevention activities and credit availability for new and refinanced mortgages to foster liquid, efficient, competitive and resilient national housing finance markets.
Strategic Goal 2: REDUCE taxpayer risk through increasing the role of private capital in the mortgage market.
Strategic Goal 3: BUILD a new single-family securitization infrastructure for use by the Enterprises and adaptable for use by other participants in the secondary market in the future.
These goals are all totally reasonable for the FHFA to pursue. But it is also clear that Director Watt is taking the FHFA in a direction that is quite different than the one pursued by his predecessor, Acting Director DeMarco. DeMarco had taken the position that the best way to protect taxpayers was to be pretty tough on everyone else. “Everyone else” included defaulting and underwater homeowners as well as originating lenders who had sold Fannie and Freddie tons of mortgages that did not comply with the reps and warranties that the parties had agreed to about the quality of those mortgages. DeMarco’s strategy was much criticized but also quite coherent.
Watt has made it clear that he is going to be more flexible with homeowners. He highlighted a pilot program in Detroit that will include “deeper loan modifications.” He has also made it clear that he is going to be more flexible with lenders, relaxing rep and warranty standards for mortgages that Fannie and Freddie purchase from lenders. These may be very good policies to pursue, but it would be helpful if he set forth a clearer vision of how safety and soundness is best balanced with liquidity and efficiency. Federal housing finance policy typically goes off the rails when its goals get all mixed up. Director Watt should ensure that FHFA’s safety and soundness goals are clearly set forth and that other goals for Fannie and Freddie are designed to work in harmony with them.
