CMBP News
FHFA Retreats on Minimum Servicing Fee Proposal; Reports
The Federal Housing Finance Agency (FHFA), regulator of Fannie Mae and Freddie Mac (the GSEs) has reportedly decided to shelve a project to consider changes to the way the servicers of mortgage loans owned or guaranteed by the GSEs are compensated. Currently mortgage loan servicers must include a minimum servicing fee of 25 basis points in loans they originated and sell to, or securitize through, the GSEs.
The FHFA received numerous comments, most in opposition, to options set forth in a Discussion Paper released in September 2010 that set out two alternatives to the current compensation method for mortgage loan servicers – one alternative would reduce the servicing fee to a range of 20 – 12.5 bps, and require a 2 – 5 bps reserve and the second alternative would institute a fee for service method whereby the loan servicer would be compensated a flat fee per month for each performing loan they service. The fee for service option was strongly opposed by virtually all segments of the industry, while the reserve option received some support.
Click to view the FHFA Discussion paper and CMBP’s comment letter.
CMBP FHA Working Group
CMBP has formed an FHA Working Group to discuss the contradictory signals from HUD officials on policies and objectives of the FHA mortgage insurance program. CMBP’s concern is that FHA-approved mortgagees (lenders) are being held to increasingly stringent standards for origination and servicing of FHA-insured mortgages, and being held accountable for the performance of those mortgages following origination, while HUD is advocating that mortgagees originate loans to marginally qualified borrowers.
The FHA Working Group will discuss the issues, develop recommendations on changes HUD should make to its policies and messaging and meet with HUD to discuss CMBP’s proposals.
CMBP Mission -
FHFA Sends Congress Strategic Plan for Fannie Mae and Freddie Mac Conservatorships (February 22, 2012) |
Around the Nation
|
For decades, the traditional, independent mortgage banker has delivered value and choice to consumers by leveraging local market expertise, quality service, and the ability to sell into the secondary market on a “best execution” basis that lowers costs for borrowers. Today, those benefits are at risk due to legislative and regulatory proposals that could accelerate consolidation of the mortgage industry into the hands of a few mega lenders. The Community Mortgage Banking Project (CMBP) is a coalition of lenders that have come together to support legislative and regulatory reform of the mortgage market that will support and enhance: