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Fannie and Freddie Detail New HARP Guidelines

Fannie Mae and Freddie Mac have released highly anticipated guidelines for the revised Home Affordable Refinance Program (HARP). Among the key program revisions, the GSEs have eliminated or raised the loan-to-value cap, and relaxed representation and warranty stipulations. Both government officials and market analysts have said rep and warranty waivers could spark heated competition among lenders to refinance borrowers through HARP. With the new guidelines, the GSEs laid out exactly what will be waived.

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House Committee Votes to Suspend Bonus Pay for GSE Execs

The House Financial Services Committee voted in favor of a bill Tuesday that would prohibit Fannie Mae and Freddie Mac from paying out future bonuses and suspend the 2011 compensation packages that have been approved by their regulator. The bill passed the committee by a vote of 52 to 4 and now moves to the full House for consideration. On the other side of Capitol Hill the very same day, the Senate Banking Committee held a hearing in which members grilled the GSEs' regulator about executive pay.

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NCUA Reaches Settlements with Two Banks

The National Credit Union Association (NCUA) has reached settlements with Citigroup and Deutsche Bank Securities regarding residential mortgage-backed securities sales to five wholesale credit unions that have recently failed. Citigroup agreed to pay $20.5 million, and Deutsche Bank agreed to pay $145 million to help lessen the losses incurred when the five credit unions failed. Neither bank admitted to fault when agreeing to the settlement. Total losses incurred from the five credit union failures stand at $3.3 billion, according to the NCUA.

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FHA Reserves Sink Further Below Legal Limit Amid Talk of Bailout

An annual audit of the Federal Housing Administration's (FHA) books has concluded there is a 50-50 chance the government mortgage insurer will need a bailout from taxpayers within the next 12 months. The agency's cash reserves have been cut almost in half over the past year and its capital reserve ratio has plunged to 0.24 percent. The minimum legal limit mandated by Congress is 2 percent. News of the agency's deteriorating bottom line comes just as lawmakers are advancing a bill that would likely increase FHA's market share.

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Freddie Mac’s Average REO Sale Yields 94% Market Value

Freddie Mac says its REO homes sell for an average of 94 percent of market value. According to the GSE, because Freddie Mac-owned homes are well maintained and priced right for the local market, most sell close to full estimated market value. Freddie Mac sold more than 80,000 single-family REO homes in the first nine months of 2011, which the company says is a record. According to the GSE, it is selling more homes than it's taking in through foreclosure.

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California Expands Its Homeowner Relief Program

California is relaxing some of its eligibility restrictions and increasing the amount of assistance it provides struggling homeowners through its mortgage assistance program. Keep Your Home California is a $2 billion initiative funded by the federal government through the California Housing Finance Agency. Changes to the various sub-programs include an extension of the time period during which unemployed homeowners receive assistance and expanding eligibility to those who own more than one property.

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Georgia Lender Becomes This Year’s 88th Failed Bank

Community Bank of Rockmart ran its business from a single branch location in Rockmart, Georgia. The bank had $55.9 million in deposits and assets totaling $62.4 million. It became the 88th FDIC-insured institution to fail in the nation this year and the 23rd in Georgia when state regulators shuttered its doors late last week. The FDIC brokered a deal with Century Bank of Georgia to assume all the deposits of the failed bank and purchase $40.7 million of its assets.

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Call for Return of Housing Counseling Dollars Resonates 445+ Strong

More than 445 nonprofit housing counseling agencies nationwide have one simple message for Congress: Restore housing counseling funds. Mandated federal budget cuts earlier this year stripped away $88 million in HUD funding that had been designated to support mortgage and foreclosure counseling programs. Those working on the front lines of the housing crisis everyday say counseling is critical to assisting distressed homeowners, and they're calling on lawmakers to restore funding at the level of $60 million.

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Senate Proposal Calls for Winding Down of GSEs

Sen. Bob Corker of Tennessee has introduced a bill aimed at winding down the GSEs and bringing uniform standards to the industry. Coker's proposal would gradually reduce the amount of new mortgage backed securities (MBS) issued by Fannie Mae and Freddie Mac over 10 years. At the end of the 10-year period, the MBS market would be completely private. The bill also mandates sales of the GSEs' technology and other systems to private investors, and calls for a replacement to the MERS registry system.

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Three Servicers Pledge to Abide by Fair Servicing Standards

Three mortgage servicers have voluntarily entered into an agreement with the New York State Department of Financial Services in which they pledge to abide by upgraded mortgage servicing standards that ensure fairness for all borrowers. The agreement was forged between Benjamin M. Lawsky, superintendent of the state regulatory agency, and Morgan Stanley and its Texas-based servicer Saxon; American Home Mortgage Servicing, also based in Texas; and Vericrest Financial, based in Oklahoma.

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