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New Mortgage Security Guidelines Proposed
Wall Street Journal (12/15/09) P. C3; Simon, Ruth
Hoping to bolster the residential mortgage securities market, the American Securitization Forum on Dec. 15 will roll out guidelines for new issues that force lenders and investment firms that bundle loans into securities to shoulder more risk. The goal is to set standards for when mortgage originators and packagers should repurchase delinquent loans due to violations of "representations and warranties" made at the time they were packaged into securities. Although the new guidelines are not legal requirements, the Forum's deputy executive director, Thomas Deutsch, believes they will become "the baseline standard" that investors and ratings agencies use in evaluating securitizations.
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Fannie, Freddie Overseer Said to Consider Seeking More U.S. Aid
Bloomberg (12/15/09) Kopecki, Dawn
The Treasury Department and the Federal Housing Finance Agency are renegotiating Fannie Mae and Freddie Mac's financing plan, which requires the firms to reduce their combined mortgage portfolios by 10 percent a year starting in 2010 and limits their debt issuance to 120 percent of their assets. As part of the renegotiations, the cost of the companies' dividend payments on their borrowings from the Treasury could drop; they also could ask the Treasury to increase their $400 billion federal lifeline before the end of the year.
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ISGN Buys Loan-Service Unit in Major Expansion
Philadelphia Inquirer (12/15/09) Brubaker, Harold
ISGN Solutions Inc. has acquired Fiserv Inc.'s Loan Fulfillment Services unit, adding 870 employees to ISGN's payroll and nearly $100 million in revenue to its coffers. Niraj Patel, group president of ISGN, says the Fiserv acquisition gives ISGN "size and scale and a footprint that gets us to the next level." ISGN currently provides services to more than half of the nation's 20 largest mortgage originators and a dozen of the 20 biggest mortgage servicers.
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Bank CEOs Pledge to Push for Re-Regulation
Wall Street Journal (12/15/09) P. A18; Weisman, Jonathan
President Obama met with executives of big banks to confront them about a $300 million lobbying effort to weaken financial re-regulation, hitting on such issues as loan workouts and small-business lending, after the officials voiced support for reform. U.S. Bancorp President and CEO Richard Davis acknowledged a "disconnect" between the CEOs and the financial-industry lobbying and, along with Bank of New York Mellon Chairman and CEO Bob Kelly and PNC Chairman and CEO Jim Rohr, promised to meet with lobbyists to assume a position in support of the legislation.
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City's Lawsuit Against Wells Fargo on Shaky Ground
Baltimore Sun (12/15/09) Bishop, Tricia
U.S. District Judge J. Frederick Motz is considering paring or dismissing a landmark civil suit filed by the city of Baltimore in 2008 that alleges a pattern of racially based, discriminatory lending by Wells Fargo. In a Dec. 14 hearing, the federal judge suggested it would be difficult for the city to prove huge financial losses from houses left vacant by foreclosures; and two similar suits filed by other cities have already been dismissed.
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