Government

A new report from a government watchdog accused Freddie Mac, its servicers, and the Federal Housing Finance Agency (FHFA) of not meeting requirements when handling and resolving escalated consumer complaints. According to a report from the FHFA Office of Inspector General (OIG), Freddie Mac and eight of its largest servicers, which service 70 percent of the GSE’s mortgages, received over 34,000 complaints that became escalated cases during a 14-month time period ending November 30, 2012. After tracking the escalated cases, FHFA OIG found seven out of the eight Freddie Mac servicers did not resolve all escalated cases within the 30-day requirement.

Ally Bank has reached an agreement with Quicken Loans to sell the last of its remaining mortgage servicing rights (MSRs) portfolio, both companies announced. The purchase price is estimated to be approximately $280 million. ""This agreement marks a key milestone for Ally and, upon successful completion of the MSR transactions, Ally Bank will have exited all the non-strategic mortgage activities,"" said Barbara Yastine, present and CEO of Ally Bank.

Amendments to the Senior Preferred Stock Purchase Agreement (PSPA) between Treasury and the GSEs, agreed to in August 2012 may lead to faster and greater returns to taxpayers but could also potentially leave the enterprises with largely illiquid portfolios, according to a report from the Federal Housing Finance Agency's Office of Inspector General (FHFA OIG). The amendments addressed several terms of the PSPAs. One of the most notable changes was the change in dividend structure.

First-time claims for unemployment insurance increased 2,000 to 336,000 for the week ending March 16--the first increase in a month--the Labor Department reported Thursday. Economists expected claims to rise to 340,000. Initial jobless claims for the week ending March 9 were revised up to 334,000 from the initially reported 332,000. The slight increase in first-time claims was driven largely by seasonal adjustment factors and as such masks the sharp improvement in the jobs market.

The story of the London Interbank Offered Rate (Libor) scandal added another chapter in March as Freddie Mac brought suit against Barclays, Bank of America, Citibank, and several other institutions for investment losses related to alleged rate-rigging practices. The GSE filed March 14 against a dozen banks for ""punitive damages to the extent allowable by law"" as well as for the cost of attorneys and legal fees. A number for damages sought was not specified.

With an upbeat assessment of the economy, the Federal Open Market Committee voted 11-1 Wednesday to leave interest rates unchanged and to continue its program of purchasing agency mortgage backed securities and longer term Treasury securities ""to maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.""

The time properties stay in distress before going to sale has increased nearly five fold since 2003 in non-judicial states, according to CoreLogic's March MarketPulse report. The data provider tracked months in distress from 2003 to 2012 and found the disposition timeline in both judicial and non-judicial states has seen a significant extension. In judicial states, the disposition timelines remained relatively constant at seven months but began to rise in mid-2008 before increasing to an average of 35 months. In non-judicial states, it takes about 24 months before a distressed property goes to sale.

Speaking before the House Financial Services Committee at a hearing Tuesday morning, Federal Housing Finance Agency (FHFA) Acting Director Edward DeMarco presented his take on sustainable housing finance and what the future of housing finance might look like. DeMarco began his testimony at Tuesday's hearing, ""Sustainable Housing Finance: An Update from the Federal Housing Finance Agency on GSE Conservatorships"" by reiterating his goals for the GSEs this year. He then went on to describe three possible scenarios for the future of the housing finance system and the government's role in that system.

Richard Cordray's nomination to continue leading the Consumer Financial Protection Bureau (CFPB) is headed to the Senate following a vote from the Committee on Banking, Housing, and Urban Affairs Tuesday. The committee confirmed Cordray's nomination by a party-line vote of 12-10, with Republican members keeping to their vow to not support any potential leader until CFPB's structure is fundamentally changed. Also up for vote was the nomination of Mary Jo White to head the Securities and Exchange Commission. White was approved by a vote of 21-1.

Three industry analysts gave testimony before a Senate committee on housing finance reform Tuesday. While all three experts expressed support for more private capital and less government involvement, the proposed degrees of government support varied. Mel Martinez, co-chair of the Bipartisan Policy Center's Housing Commission, recommended the elimination of the GSEs over a period of about 5-10 years and the creation of a limited, government guarantee called the ""Public Guarantor.""