Depository and mortgage bankers have called on financial regulators to allow residential originators to close loans that are exempt from the risk-retention requirements of recently enacted legislation. As it enhances disclosures on reverse-mortgage issuances, the Government National Mortgage Corp. has taken several steps to follow the lead of its government-controlled counterparts.
Making risk-retention requirements too broad would likely cause lenders to leave the marketplace, reduce the amount of available consumer credit and harm the economic recovery, the American Bankers Association wrote in a letter last week to the heads of the eight regulatory agencies that are helping write new risk-retention rules as required by the under Section 941 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The trade group is calling for a “qualified residential mortgage” that would not be subject to risk-retention requirements or used to address other policy concerns beyond underwriting.
The call for a qualified residential mortgage echoed a Nov. 9, 2010, letter from the Mortgage Bankers Association to federal financial regulators. Recipients of MBA’s letter included the regulator of Fannie and Freddie, the Federal Housing Finance Agency; the Department of Housing and Urban Development; and bank regulators.
“We encourage the federal agencies to refer to the recommendations made by the Board of Governors of the Federal Reserve System in the Federal Reserve’s recent report to Congress on risk retention and securitization,” the trade group’s chairman, John A. Courson, stated in the letter. “MBA believes the Federal Reserve’s recommendations will help to ensure that the regulations promote the purposes of the DFA without unnecessarily reducing the supply of credit.”
A selling guide update from Fannie Mae, Announcement SEL-2010-10, includes state-specific documentation requirements for co-op share loans. The requirements were updated for Connecticut, while Alaska, Indiana and Washington were added.
Fannie said it went live with Desktop Underwriter 8.2 during the first half of December. Among the updates are policy changes for borrowers with prior foreclosures, revised round logic for loan to values, and changes to income policy.
Fannie said in Announcement SEL 2010-15 that it is immediately allowing loan proceeds to be used to finance energy improvements under certain conditions. The secondary lender is also providing borrowers with a loan-level pricing adjustment credit of $250 for loans with the energy improvement feature to offset the costs associated with the required energy audit report.
Freddie Mac said in a November announcement that it will issue jumbo-super conforming pools under the prefixes T4 (15-year), T5 (20-year) and T6 (30-year). In addition, participation certificates with prefixes between T49000 and T49999; T59000 and T59999; or T69000 and T69999 can include super conforming mortgages.
Freddie announced its new super-conforming pooling option in Bulletin 2010-29. The option increases seller flexibility on fixed-rate mortgages delivered under the Guarantor and MultiLender Swap programs.
A clarification about loan-to-value requirements included in Memo APM 11-02 from Ginnie Mae indicated that the LTV must be based on the property value at the time of origination. On FHA streamline refinance transactions and VA Interest Rate Reduction Loans that had no appraisal done, issuers can enter “0” in the LTV data field.
Federal holidays when Ginnie is closed but the Federal Reserve Banks are open will count as a work day from a processing standpoint, according to Memorandum APM10-24.
Memo APM 10-25 reminded Ginnie issuers that a test region is available for alphanumeric testing, as noted in an earlier memo. Following the lead of Fannie and Freddie, Ginnie is adopting two upper-case letters in the first two places of the six-character field, and the remaining four characters will be numeric.
Ginnie reported in Memo APM 10-23 that, also following Fannie and Freddie’s lead, it will adopt the Mortgage Industry Standards Maintenance Organization‘s Uniform Loan Delivery Dataset for delivering loan information.
A news release last month from Ginnie said it is adopting the Uniform Mortgage Data Program’s Uniform Loan Delivery Dataset for loan information delivery. The move is also modeled after the two government-sponsored enterprises’ practices and “is an important step toward meeting industry requests for uniformity in loan data.” The requirement goes into effect this month.
In November, Ginnie reported that it would soon release enhanced disclosure information on its securities that are backed by home-equity conversion mortgages. The additional information will include the number of HECM Saver loans, their remaining principal balances
“The new disclosure information is aimed at helping investors better predict the performance of the underlying mortgage collateral and evaluate the performance of HECM Saver loans relative to that of standard HECM loans,” the statement said.
FHA short-refinance loans with case numbers or issuance dates on or after Sept. 7, 2010, and closing dates of no later than Dec. 31, 2012, can be pooled in Ginnie Mae single-family pools, according to Memo MPM 10-08 and Memo APM 10-20. FHA published enhancements to the short-refinance program in Mortgagee Letter 2010-23.
