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Tag Archives: Federal Reserve

Regulators Assure Public Fines Are Coming for Robo-Signing Offenses

The retrospective foreclosure reviews mandated in the consent orders issued to servicers this week will help regulators evaluate the extent of the problem and determine the amount of monetary fines that should be assessed, according to John Walsh, head of the Office of the Comptroller of the Currency. Walsh says in addition to these punitive penalties, servicers will have to absorb ""substantial expense"" to fix their problems and are obligated to provide restitution to borrowers who suffered financial harm ""with no dollar cap.""

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Fed’s Beige Book Highlights Weaknesses in Regional Real Estate Markets

The Federal Reserve released a new rendition of its market-gauging Beige Book Wednesday. Economic activity on the whole has improved, but residential and commercial real estate were again branded as hindering growth and recovery. Half of the 12 Fed districts reported pockets of weakening in their single-family markets. Most signs of improvement came from agents and brokers in Florida and Philadelphia. Seven of the districts described commercial real estate as improved but only slightly, while five districts noted that their markets were flat.

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Regulators Hand Down Enforcement Actions to Servicers, Vendors

The Office of the Comptroller of the Currency, Federal Reserve, and the Office of Thrift Supervision announced formal enforcement actions Wednesday against 14 mortgage servicers and two firms that provide foreclosure-related services to the industry - LPS and MERS. The consent orders are the result of regulators' investigations into robo-signing allegations and represent a settlement with the firms involved, at least in part. Both the OCC and Fed say they believe monetary sanctions in these cases are also warranted, and they plan to pursue such actions separately.

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Rifts Continue to Surface Around Robo-Signing Settlement

Federal regulators split from state attorneys general last week to cut their own deal with mortgage servicers as part of a settlement for the robo-signing mess that surfaced last fall. Critics of the side deal are calling for federal regulators to withdraw their agreements and work with the states to hold banks accountable. But even in the attorney general camp there has been dissension. A study released Tuesday by three economists says the original settlement proposal backed by state counsels could increase the foreclosure inventory by $297 billion.

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Let’s Make a Deal: Feds Move on Robo-Signing Settlement Without AGs

Mortgage servicers have reportedly reached an agreement with federal regulators to change their foreclosure procedures as part of a settlement for the robo-signing transgressions that were uncovered last fall. The arrangement includes no fines, but monetary penalties have not been completely ruled out. In early March, federal regulatory agencies and state attorneys general together crafted a 27-page settlement proposal, however, the states have not been part of this latest development.

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FHFA Inspector General Evaluates Pay Structure for GSE Execs

In 2009 and 2010, the Federal Housing Finance Agency (FHFA) approved salary packages totaling more than $35 million for executives at Fannie Mae and Freddie Mac. The agency's Office of the Inspector General has released a report detailing the compensation levels of GSE execs for the past two years, noting that the CEOs of Fannie and Freddie together made $17 million during that period. The report points out that although the GSEs have lost billions of dollars and depend on federal support, their senior executives continue to receive multi-million dollar salaries.

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Regulators Propose Rule to Link Executive Pay to Risk

Federal regulators proposed a new rule Wednesday that would require certain financial institutions, including large mortgage lenders, to account for risk as they structure incentive compensation packages for executives and employees. New rules for risk-based pay are a mandate of the Dodd-Frank Reform Act and are aimed at stemming the type of risky lending and investment gambles that many economists say pushed the nation's financial system to the brink of collapse.

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Treasury Hopes to Sell Securities Portfolio Within One Year

On Monday the Treasury announced that it will wind down the remaining $142 billion mortgage-backed securities (MBS) portfolio it carries. This news comes just as the federal government is making plans to drastically reduce its role in the mortgage marketplace. Beginning this month, Treasury plans to sell up to $10 billion in agency-guaranteed MBS each month, with the goal of fully extinguishing the portfolio in a little over a year and turning a profit for taxpayers.

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Property Investors: Solving or Contributing to Neighborhood Blight?

Two recent studies about investors who buy vacant and deteriorating homes and resell them paint vastly different pictures of the effects such actions have on neighborhoods. A report from the Federal Reserve Bank of Cleveland says many cities are being hurt by investors who purchase homes and sell them quickly without regard for back taxes on the property. But another report says investors who play the game fairly are actually contributing to the growth and overall health of ailing neighborhoods and helping families at the same time.

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Fed Sees Signs of Economic Recovery but Weakness in Housing

The nation's economic recovery is on ""firmer footing"" with conditions in the labor market ""improving gradually,"" the Federal Reserve said Tuesday following its monetary policy meeting. The Fed's view of the economy was noticeably more upbeat, but that optimism stopped short when the discussion turned to housing. With property values still sliding, a ballooning foreclosure pipeline, and a shadow inventory of distressed REOs that experts say could take more than three years to clear, the Fed stated bluntly, ""the housing sector continues to be depressed.""

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