Daily Archives: September 14, 2012

HousingWire | Fake press release announces Fannie Mae principal reduction program

HousingWire | Fake press release announces Fannie Mae principal reduction program.

Just to be clear: This is not happening.

A fake press release with Fannie Mae letterhead, links and contact information was sent to some media outlets, announcing a new principal reduction program.

The Federal Housing Finance Agency shut down the idea in August. Outside of fully funded principal payments from fellow taxpayers as part of select state programs, no borrowers can receive write-downs from a GSE.

The fictional HomeRight Community Relief Program would force servicers to reduce principal “to reflect their current market value” through HAMP modifications. A phone number is even assigned to press contact Andrew Wilson, but the area code is from Georgia – not really close to McLean, Va., where Fannie is based.

Groups protested at Fannie and Freddie Mac offices around the country this week, calling for the mortgage giants to reduce principal for borrowers who owe more on their loan their home is worth.

A Fannie legal team is tracking down who put out the release. A phone call to the number provided was not returned.

BofA to Settle in Disabled Homebuyer Discrimination Case

Bank of America (BAC) has agreed to compensate mortgage loan applicants who alleged the bank discriminated against some borrowers who received disability income.

The U.S. Justice Department said Thursday the nation’s second-largest home lender would pay $1,000, $2,500 or $5,000 to would-be borrowers who were asked to provide a letter from their doctor to document the income they received from Social Security Disability Insurance.

Bank of America agreed to hire an independent administrator to review roughly 25,000 loan applications filed between May 2007 and April 2012 to identify anyone aggrieved. That review will help determine how many consumers were harmed and how much B of A will have to pay.

The case springs from complaints filed by three mortgage applicants with the U.S. Department of Housing and Urban Development, which charged the bank with asking some borrowers for proof of their disabilities and seeking evidence their disability income continued before approving loans.

The Fair Housing Act makes it illegal to impose different qualification standards on borrowers or to inquire about the nature or severity of a disability.

“Loan applicants with disabilities should not be subjected to invasive requests for medical information from a doctor when they are applying for credit,” Assistant Attorney General Thomas E. Perez said in a press release.

Read on.

Fed Undertakes QE3 With $40 Billion Monthly MBS Purchases

The Federal Reserve said it will expand its holdings of long-term securities with open-ended purchases of $40 billion of mortgage debt a month in a third round of quantitative easing as it seeks to boost growth and reduce unemployment.

“We’re looking for ongoing, sustained improvement in the labor market,” Chairman Ben S. Bernanke said in his press conference today in Washington following the conclusion of a two-day meeting of the Federal Open Market Committee. “There’s not a specific number we have in mind. What we’ve seen in the last six months isn’t it.”

 

Stocks jumped, sending benchmark indexes to the highest levels since 2007, and gold climbed as the Fed said it will continue buying assets, undertake additional purchases and employ other policy tools as appropriate “if the outlook for the labor market does not improve substantially.”

Read on.

FOLLOW-UP ON FREDDIE MAC’S LOAN REPURCHASE PROCESS

FHFA and Freddie Mac have acted on the concerns raised in FHFA-OIG’s report by adopting a more expansive loan review process. Specifically, Freddie Mac changed its policies to review for potential repurchase claims significantly larger numbers of loans that defaulted more than two years after origination.

It is estimated that the more expansive loan review process will generate additional recoveries ranging from $0.8 billion to $1.2 billion for loans selected for review in 2012 and $2.2 billion to $3.4 billion overall. Because these recoveries had not been anticipated and accounted for, the added revenue will increase Freddie Mac’s profits and hence the amount paid to the U.S Department of the Treasury (Treasury).

Full report below…

Here is the report.