Servicing

With homeowners largely staying on the sidelines, mortgage application volume underwent a seasonally adjusted 10-percent squeeze last week, according to the Mortgage Bankers Association. In releasing the Weekly Mortgage Applications Survey, the trade group found that declines overwhelmingly led most of the survey components. The MBA found the Market Composite Index declining by 19.6 percent on a seasonally unadjusted basis from the week before.

The Federal Housing Administration submitted an annual actuarial report to Congress Tuesday that suggests diminishing returns from a fledgling growth strategy could lead the agency to a taxpayer-funded bailout next year. The reason why? The FHA currently fails to meet a 2-percent capital reserve ratio mandated by federal law, with cash reserves on hand falling to less than an eighth below the required threshold. The report said that cash reserves on hand fell accordingly from $4.7 billion last year to $2.6 billion over 2011. Estimates predict that it could require $50 billion.

The GSEs are making headlines, with Fannie Mae's CEO appearing before Congress to address the entity's possible profitability and Freddie Mac's CEO providing testimony on the controversial executive bonuses within the organization. Both leaders spoke to the House Committee on Oversight and Government Reform to field questions regarding various aspects of Fannie and Freddie's practices and financial standing. The high-profile hearing follows considerable outcry by lawmakers over $13 million in bonuses for 10 senior-level executives.

SunTrust Banks, Inc., has announced a new chairman for its board of directors, naming the company's president and CEO to the position. William H. Rogers, Jr., who has served as president and CEO of SunTrust since June, will take over as chairman of the board on January 1.

The same day that lawmakers deluged the GSEs and their regulator with criticism, Fannie Mae and Freddie Mac finally released guidelines Tuesday for lenders and servicers about modifications to the Home Affordable Refinance Program. The Obama administration ended weeks of speculation when it announced the modifications ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô specific to HARP 2.0, as dubbed by the media ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô in October. New guidelines effectively took lenders and servicers off the hook by nixing their legal culpability for original loans before homeowners refinance with the GSEs.

Fixed-rate mortgages remained largely popular with consumers over the third quarter, according to Freddie Mac, despite the willingness by some lawmakers and policymakers to part ways with the loan product. The GSE found that more refinancing borrowers opted to contract their mortgage terms over the course of the second quarter. Forty percent of borrowers with a 30-year fixed-rate mortgage exchanged their old products for 15- and 20-year mortgages, topping off the most such since 2003, Freddie found.

A minibus bill cobbled together by House lawmakers would slash spending from several federal agencies, including HUD, and limit a hike in conforming loan limits to the Federal Housing Administration. House lawmakers drafted the stopgap bill to resolve funding needs for the federal government and avoid a shutdown for the remainder of the fiscal year a step in the direction of an agreement reached by White House officials and member of Congress earlier this year.

Pressure from Congress over some $13 million in bonuses for GSE executives crystallized in a hearing Tuesday that saw Federal Housing Finance Agency Acting Director Edward DeMarco defend himself and the controversial pay packages against critical questions from lawmakers. Members of the Senate Banking Committee largely took turns criticizing the FHFA's decisions and probing for statements about the housing finance system. The head of the agency responsible for regulating the GSEs portrayed his decision as one that would ultimately help keep taxpayers off the hook.

ServiceLink has appointed a new general counsel, with the announcement that Donald Blanchard will join the company. The end-to-end origination provider plans to capitalize on Blanchard's experience in corporate, contract, and real estate law to enhance their legal support.

The current complexion of the national housing market is prompting Bank of America Corp. to focus on new lending measures, including taking steps toward facilitating loans that are not backed by the government-sponsored enterprises. BofA's CEO Brian Moynihan highlighted future initiatives from the financial institution during his speech at the BofA Merrill Lynch conference in New York recently, and his remarks revealed the bank's key interest in pursuing changes related to the influx of investor cash into real estate markets around the country.