Report: Supreme Court To Hear GSE Shareholder Suit

As the Supreme Court wrapped up its current term, it announced Thursday that it would hear a pair of cases related to litigation around the structure and payout dividend payout practices of Fannie Mae and Freddie Mac, Reuters reported. Reuters reports: The justices will review a 2019 ruling by the New Orleans-based 5th U.S. Circuit Court of Appeals that shareholders in the two companies could pursue a challenge to the 2012 agreement between the Federal Housing Finance Agency and the Treasury Department. The deal eliminated dividend payouts to various shareholders and required the companies to pay the U.S. Treasury an amount equal to their quarterly net worth each quarter. The court also took up a related appeal brought by the shareholders…

Dems Release Exhaustive Housing Policy Agenda

By Jim Perskie Opposing wings of the Democratic Party released sweeping policy recommendations, including proposals to reverse policies and practices that “have made homeownership all but impossible for millions of working families.” The proposals – released by the Biden-Sanders Unity Task Force – were released Wednesday as part of a 110-page document meant to bring together supporters of former Vice President Joe Biden and Sen. Bernie Sanders ahead of the November election. “Democrats believe the government should take aggressive steps to increase the supply of housing, especially affordable housing, and address long-standing economic and racial inequities in our housing markets,” the proposal states. “We will equalize access to affordable credit and improve access to down payment assistance to help families of color, low-income…

Trump: Biden To Have “Devastating Impact” On Suburbs

President Trump announced overnight that he is considering doing away with a federal rule designed to overcome historic patterns of segregation. “At the request of many great Americans who live in the Suburbs, and others, I am studying the AFFH housing regulation that is having a devastating impact on these once thriving Suburban areas. Corrupt Joe Biden wants to make them MUCH WORSE. Not fair to homeowners, I may END!” the President Tweeted Tuesday night. At the request of many great Americans who live in the Suburbs, and others, I am studying the AFFH housing regulation that is having a devastating impact on these once thriving Suburban areas. Corrupt Joe Biden wants to make them MUCH WORSE. Not fair to…

Supreme Court Rules CFPB Structure Unconstitutional

The Supreme Court ruled Monday that the structure of the Consumer Financial Protection Bureau is unconstitutional – but left in place the rest of the legislation creating the consumer protection agency. Writing for the majority in the 5-4 decision, Chief Justice John Roberts said the law violate the separation of powers clause because it prevented the president from firing the agency director at will. The law said the director could only be fired “for cause.” “We therefore hold that the structure of the CFPB violates the separation of powers,” the Supreme Court ruled. “We go on to hold that the CFPB Director’s removal protection is severable from the other statutory provisions bearing on the CFPB’s authority. The agency may therefore continue…

FHFA Extends Forbearance For Multifamily Borrowers

Good news for renters. The Federal Housing Finance Agency announced Monday that Fannie Me and Freddie Mac are allowing mortgage servicers to extend forbearance agreements for multifamily property owners during the coronavirus pandemic. The announcement applies to existing owners with existing forbearance agreements, bringing the total forbearance – or pause in paying mortgage payments – to up to six months. “During the pandemic, FHFA has been focused on protecting renters and borrowers while ensuring the mortgage market functions as efficiently as possible,” FHFA Director Mark Calabria said. “The multifamily mortgage forbearance extension announced today will help renters stay in their homes and help property owners retain their properties.”  While the properties are in forbearance, landlords must suspend all evictions for…

Watchdog Gives Lenders A Pass On Complaints

After spending months trying to arrange a repayment plan with her mortgage servicing company, a South Carolina homeowner filed a complaint with the Consumer Financial Protection Bureau. The complaint was listed as closed just days after Shellpoint Mortgage Servicing provided the agency with its explanation – one that did not resolve the issue and one that is not sufficient to the homeowner. The homeowner learned that Shellpoint was her new mortgage servicer in December after receiving correspondence that she and her husband were behind on their payments. Although she said they were current as of September, Shellpoint said otherwise. The homeowner said they eventually reached an agreement to make down-payment of $6,577.71 so they could enter a repayment plan, but Shellpoint…

Debt-To-Income Nixed Under CFPB Proposal

The Consumer Financial Protection Bureau announced Monday that it is proposing replacing the debt-to-income ratio for qualified mortgages with a loan price-based approach. The bureau said it is proposing the change because “a loan’s price, as measured by comparing a loan’s annual percentage rate to the average prime offer rate for a comparable transaction, is a strong indicator and more holistic and flexible measure of a consumer’s ability to repay than debt to income alone.” The proposal is one of two issued by the CFPB to address what is known as the GSE Patch, which is schedule to expire in January 2021 or when the GSEs (Fannie Mae and Freddie Mac) exit conservatorship, whichever comes first. CFPB explains the need…

FHFA, FHA Extend Eviction, Foreclosure Ban

The Federal Housing Finance Agency and Federal Housing Administration announced Wednesday that they are extending the moratorium on foreclosures and evictions as the nation continues to cope with economic fallout from the COVID-19 pandemic. The ban on evictions and foreclosures will be in place until at least Aug. 31. It was set to expire on June 30. “To protect borrowers and renters during the pandemic we are extending the Enterprises’ foreclosure and eviction moratorium. During this national health emergency no one should worry about losing their home,” FHFA Director Mark Calabria said. “While the economic recovery is already underway, many American families still need more time and assistance to regain their financial footing,” HUD Secretary Ben Carson said. “Our foreclosure and…

Consumer Groups Sue To Disband CFPB “Task Farce”

A group of consumer advocates sued the Consumer Financial Protection Bureau and Director Kathy Kraninger on Tuesday, alleging they created a task force that does not serve the public interest and has secretly conducted its work in violation of federal law. The plaintiffs – including the National Association of Consumer Advocates, U.S. Public Interest Research Group and consumer law Professor Kathleen Engel – allege the task force is “stacked with industry-aligned members, excludes consumer advocates, does not serve a public interest, and has conducted its work behind closed doors.” The lawsuit seeks to prevent the task force from operating. “A group of hand-picked industry lawyers and consultants that meets behind closed doors — with no consumer advocates or disparate points…

FHFA: Fannie, Freddie Play Too Big Of A Role

Federal Housing Finance Agency Director Mark Calabria on Monday warned Congress that Fannie Mae and Freddie Mac play a disproportionately large role in the housing market and are badly undercapitalized – creating significant risk to the nation’s economy. In a letter to the banking and housing chairs introducing FHFA’s annual report, Calabria urged Congress to give the agency greater authority to charter competitors to Fannie and Freddie and limit their relative power in the housing market. “A root cause of the 2008 financial crisis was imprudent mortgage credit risk backed by insufficient capital,” Calabria wrote to Congress. “This fundamental problem remains unresolved today. The Enterprises are inarguably undercapitalized for their size, risk, and systemic importance. Calabria said Fannie and Freddie…