Compliance & Regulation

Freddie Mac has taken out another reinsurance policy that transfers risk of default on mortgages it insures.

Wells Fargo & Co., the largest U.S. home lender, agreed to pay $1.2 billion to resolve claims related to its Federal Housing Administration mortgage practices.

Morgan Stanley will pay $63 million to settle a series of government lawsuits claiming the bank misrepresented securities it sold to banks that later failed.

Fannie Mae and Freddie Mac unveiled an appeals process Tuesday that will allow an independent arbitrator to resolve disputes between lenders and the government-sponsored enterprises over loan repurchase demands.

Lenders argue that the GSEs would be better off buying more loans that are already insured, rather than transferring credit risk after holding them for a time. But Freddie Mac's Kevin Palmer says certainty of reimbursement is more important than the timing of risk transfers.

The near future may find more banks ceasing to originate residential mortgages in an effort to stop the slide in stock prices.

Key Democratic lawmakers are urging the Department of Housing and Urban Development to tighten its program for selling nonperforming guaranteed loans to ensure servicers have exhausted all loss mitigation options before the loans are sold to private investors.

While most federal banking regulators use enforcement actions as a way to shape industry practices, the Consumer Financial Protection Bureau is taking that to a whole other level, frequently using orders as a substitute for new rules or guidelines.

Clayton Holdings has been selected by Angel Oak Capital Advisors to be the representation-and-warranty reviewer for a $150.4 million private-label securitization of nonprime loans.

The Federal Housing Finance Agency's Duty-to-Serve rule must include a substantive commitment from the government-sponsored enterprises to purchase chattel loans.