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The Federal Deposit Insurance Corporation has issued guidance that the agency says provides comprehensive information to give servicers and financial institutions “all of the tools necessary to implement a systematic and streamlined approach to modifying loans.”  The guidance is said to be based on the agency’s loan modification program initiated at IndyMac Federal Bank.

The press release states in part:

The Program is designed to achieve affordable and sustainable mortgage payments for borrowers and increase the value of distressed mortgages by rehabilitating them into performing loans. Under the terms of the Program, borrowers receive a loan modification with a maximum 38% down to 31% housing-to-income ratio through the use of interest rate reduction, amortization term extension, and in some cases, principal deferment. This loan modification process improves the value of the troubled mortgages for investors while helping many borrowers experiencing financial difficulties remain in their homes.

The FDIC implemented this approach to loan modifications on August 20th after IndyMac Bank, FSB failed on July 11, 2008. As of November 20th, 2008 IndyMac has sent out more than 23,000 modification letters to eligible borrowers and has completed more than 5,300 modifications after verifying the borrowers’ income. Thousands more are in the pipeline.

Although foreclosures are costly to lenders, borrowers and communities, the number of foreclosures continues to rise while the pace of modifications remains too slow. Currently, 1.6 million total loans are over 60 days delinquent. Through the end of 2009, the FDIC estimates that there will an additional 3.8 million new loans over 60 days past due. Today’s release of the FDIC’s “Mod in a Box” guide will provide the industry with the necessary tools to facilitate streamlined and systematic loan modifications to help stem foreclosures, halt the decline in home prices and provide needed stability to the broader economy.

The guidance includes a Summary of the Loan Modification program, a substantial appendix containing various additional information, and certain related materials.

For a full copy of the press release, click here.

Tags: Bailouts, Consumer Protection, Distressed Assets, FDIC, Federal Bank Regulators, Foreclosure, Loan Servicing, Loss Mitigation, Mortgage Banking - General, Regulations by the Editor
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The Federal Deposit Insurance Corporation has extended the deadline for participation in the Temporary Liquidity Guarantee Program. 

The program permits the FDIC to provide a 100 percent guarantee for newly-issued senior unsecured debt and non-interest bearing transaction deposit accounts at FDIC insured institutions subject to certain terms.

The FDIC issued an interim rule on the program October 29, 2008, providing a 15-day period for comment.  The FDIC indicated the extension of time would give institutions an opportunity to fully consider the interim rules prior to deciding whether to participate.

Any institution that opts out will avoid any assessment under the program.  Other institutions will pay program fees. 

For a copy of the full press release, please click here.

For a copy of the amendment extending the deadline, click here.

For a copy of the October 29 Interim Final Rule, click here.

For a Fact Sheet regarding the program, click here.

The new deadline is December 5, 2008.

Tags: Bailouts, Economic Stimulus, FDIC, Federal Bank Regulators, Regulations by the Editor
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The Board of Governors of the Federal Reserve announced that its eRulemaking Portal failed to receive certain comments submitted in four proceedings.

The announcement states in part:

The Board of Governors of the Federal Reserve System recently received notice that 83 comment letters submitted between March 22, 2008, and September 8, 2008, via the Federal eRulemaking Portal (http://www.regulations.gov) on four of the Board’s rulemaking proposals [Docket No. R-1286, Regulation Z, Truth in Lending (73 FR 28867, May 19, 2008); Docket No. R-1314, Regulation AA, Unfair or Deceptive Acts or Practices (73 FR 28905, May 19, 2008); Docket No. R-1315, Regulation DD, Truth in Savings (73 FR 28739, May 19, 2008); and Docket No. R-1316, Regulation V, Fair Credit Reporting (73 FR 28966, May 19, 2008)] that have not been acted on were not forwarded to the Board, due to a software problem at that portal.  The problem affects comments that were sent only to the eRulemaking Portal.  Comments sent by other means (by e-mail to the Board’s comments mailbox, by facsimile, or by mail) are not affected. Because the identities of the commenters affected by this software problem are not retrievable, the Board requests that before resubmitting a comment, you review the Board’s Web site at: http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm to determine if your comment has been posted.  If the comment that you submitted has not been posted, you may re-submit your comment by using this link:  http://pubdev.frb.gov/generalinfo/foia/LostComments.cfm.

For a complete copy of the notice, please click here.

Tags: FCRA, Federal Bank Regulators, Federal Reserve, Mortgage Banking - General, Regulations, Truth in Lending Act, Truth in Savings, Unfair or Deceptive Acts by the Editor
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Today, the Federal Housing Finance Agency published formal announcement of its establishment in the Federal Register.

The FHFA is an independent Federal agency established July 30, 2008, which will integrate certain functions of the Office of Federal Housing Enterprise Oversight and Federal Housing Finance Board.

Meanwhile, the firestorm of discussions surrounding the Department of Treasury’s conservatorship of Fannie Mae and Freddie Mac continue.  The popular press continues to issue in-depth articles on a variety of details of that conservatorship, and the events leading up to and after the conservatorship.

Mortgage Law Blog notes for readers that various agencies also have issued statements regarding the conservatorship.  Links to a number of these releases appears below.

For a copy of the FHFA announcement, click here.

For FHFA press releases on the conservatorship, click here.

For an FHFA Fact Sheet on the conservatorship, click here.

For a press release from the Department of Treasury, click here.

The following releases are also of interest, in some ways due to their reserved nature:

• Board of Governors of the Federal Reserve System.
• Department of Housing and Urban Development.
• House Committee on Financial Services; also here.
• Senate Committee on Banking, Housing and Urban Affairs; also, here.

Tags: Bailouts, Bankruptcy, FDIC, Fannie Mae/Freddie Mac, Federal Bank Regulators, Federal Reserve, HUD & FHA, Mortgage Banking - General, NCUA, OCC, OTS, U.S. Treasury by the Editor
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The Office of Thrift Supervision has announced a 90-minute teleconference entitled “Identity Theft Rules and Guidelines.”  The conference is part of the “Getting It Right” Compliance Series.

The announcement describes the teleconference as:

A live, ninety-minute, telephone briefing to provide savings associations with valuable information about federal Identity Theft rules and guidelines that go into effect on November 1, 2008.  Hear from compliance and information security experts at OTS and have an opportunity to ask questions and get answers.

The teleconference is scheduled for August 11, 2008 from 2:00 to 3:30 p.m.  (Advance registration required.)

For a full copy of the press release, click here.

Tags: Conferences & Events, Consumer Protection, Federal Bank Regulators, Fraud, Identity Theft, Mortgage Banking - General, OTS by the Editor
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The Office of the Comptroller of Currency has announced the 2008 Fair Lending Conference, Statistical Analysis and Modeling for Risk Assessment.  The Conference will be held in New Orleans September 9 and 10, 2008.

The announcement states the Conference provides an “extraordinary opportunity to learn more about the OCC’s comprehensive approach to fair lending supervision, including an in-depth look at the examination process.”

According to the announcement, attendees will:

Benefit from a discussion of the current issues in the consumer protection arena by the government agencies responsible for fair lending supervision and enforcement.

Learn more about what makes the OCC fair lending examination process unique, including the economic and statistical modeling tools used by OCC economists on fair lending exams.

Hear from industry and regulatory experts on key issues in fair lending, such as credit scoring and pricing.

Gain insights from bankers on their experiences with fair lending compliance, from internal controls to interactions with regulators. 

For a full copy of the press release, click here.

For a copy of the Agenda, click here.

Registration closes August 24, 2008.

Tags: Conferences & Events, Consumer Protection, Fair Lending, Federal Bank Regulators, Mortgage Banking - General, OCC, Regulations by the Editor
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Ben Bernanke, Chairman of the Board of Governors of the Federal Reserve, and Christopher Cox, Chairman of the Securities and Exchange Commission have announced that the two agencies have entered into a Memorandum of Understanding designed to “deepen their information sharing and cooperation.”

The Board’s press release indicates that the MOU will enable the agencies to cooperate in a number of important areas of common interest, including anti-money laundering, bank brokerage activities under GLBA, clearance and settlement in the banking and securities industries, and the regulation of transfer agents.  Under its terms, the MOU covers bank holding companies and “Consolidated Supervised Entities” that own securities firms.  The MOU is designed to formalize the long-standing cooperative arrangements between the two agencies, and recent cooperation on matters including banking and investment banking capital and liquidity following the Board’s emergency opening of credit facilities to primary dealers.

In response, Chairman of the Senate Committee on Banking, Housing and Urban Affairs released the following statement:

It is my hope that the MOU will result in improved supervision of investment banks and bank holding companies, and strengthen our financial markets for investors and our nation’s economy.  It is important to note that the MOU does not grant any new authority to either agency, nor does it affect the ability of the Congress and the Senate Banking Committee to oversee regulated institutions and markets.  I am pleased that the MOU seeks to achieve its important objectives while leaving consideration of any broader reforms to our financial regulatory landscape to Congress– issues that the Senate Banking Committee will begin to examine in greater detail over the coming weeks and months.

For a full copy of the Board’s press release, please click here.

For a copy of the SEC’s press release, click here.

For a copy of the MOU, click here.

For a copy of Chairman Dodd’s press release, click here.

Tags: Bailouts, Federal Bank Regulators, Federal Reserve, Mortgage Banking - General, Regulations by the Editor
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Barney Frank (D-MA), Chairman of the House Committee on Financial Services, has announced that the Committee will hold hearings beginning July 10, 2008 on potential policy implications of the transformation of domestic and international financial markets. 

The hearings will focus on potential systemic risk associated with substantial growth in the share of assets held outside the commercial banking system, the complex arrangements that link firms subject to different regulatory standards and increasing amounts of leverage. 

Mr. Frank announced that the Committee will probe the “adequacy of current oversight and regulatory tools, and the extent to which existing structures are adequate to respond to future problems.”  Mr. Frank stated that the hearings will initially explore:

• The current state of the financial regulatory system, both in the United States and abroad, and ways to measure and limit risk without stifling innovations and improve market liquidity and breadth. 
• The implications of providing investment banks and others access to the discount window.
• In light of the collapse of Bear Stearns, proposals to improve the regulatory structure to better assess and mitigate systemic risk to avoid a similar or more serious crisis in the future.
• The need for enhanced capital and reserve requirements for financial firms.
• The adequacy of current powers of the Federal Reserve and other regulatory agencies to protect the financial system and the taxpayers.  

Henry Paulson (Secretary of the U.S. Treasury) and Ben Bernanke (Chairman of the Board of Governors of the Federal Reserve) will be among the first to testify. 

For a copy of the press release announcing the hearing, please click here.

Tags: Federal Bank Regulators, Federal Reserve, Legislation, Mortgage Banking - General, Regulations, U.S. Treasury by the Editor
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The Office of the Comptroller of the Currency has issued 2007 Significant Legal, Licensing, and Community Development Precedents for National Banks.

The summary highlights certain developments in the areas of general banking and securities activities, enforcement actions, investments, preemption and regulations.

Readers will recall that 2007 included a monumental victory for the OCC in the area of preemption in the Supreme Court case of Watters v. Wachovia, ___ U.S. ___, 127 S.Ct. 1559 (2007).

For a full copy of the summary, please click here.

Tags: Federal Bank Regulators, OCC, Regulations by the Editor
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The Federal Deposit Insurance Corporation will hold a forum on mortgage lending for low- and moderate-income households on July 8, 2008.

The announcement indicates the purpose of the LMI Mortgage Forum is to explore a framework for LMI mortgage lending in the future, including identifying market and regulatory incentives for encouraging responsible LMI mortgage lending.

Speakers and participants will come from the banking, investing, government, academic and nonprofit communities.  Speakers will include (among others):

• Ben S. Bernanke, Chairman of the Board of Governors of the Federal Reserve
• James Dimon, Chairman of the Board and Chief Executive Officer of JPMorgan Chase & Co., and
• Henry M. Paulson, Jr., Secretary of the Treasury

The Forum will cover such topics as:

• Back to Basics, Reintroducing Standard Underwriting Criteria and Pricing to the LMI Mortgage Market
• Reasonable, Profitable and Innovative Approaches to LMI Mortgage Lending
• Building Relationships, Building Communities: Partnerships that Foster Home Ownership

For a full copy of the announcement, please click here.

Tags: Conferences & Events, Consumer Protection, Economic Stimulus, FDIC, Federal Bank Regulators, Federal Reserve, Financial Literacy, Industry Involvement, Mortgage Banking - General, Regulations, U.S. Treasury by the Editor
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