Fannie Mae completes fourth credit insurance risk transfer of 2022
The government-sponsored enterprise has already done twice as many of these deals as it did during all of 2021.
Risk management
JPMorgan builds its reserves, warns of ‘storm clouds’
CEO Jamie Dimon cited elevated risks related to inflation and the war in Ukraine as the nation’s largest bank added $902 million in loan-loss reserves. “Does this represent conservatism in an uncertain macro environment or something more onerous?” one analyst asked.
ICE to offer mortgage hedges based on rate locks
The new futures contracts can be used to mitigate risk on both the origination pipeline and the mortgage servicing portfolio.
Fed watching red-hot housing market for financial stability risks
Home prices have increased at their fastest rate since the mid-2000s housing boom and driven skyrocketing inflation. Fed Gov. Christopher Waller says lenders are better prepared for a shock than in 2007 but still need to be monitored — especially nonbank lenders.
North American banks trail Europe’s in assessing climate risk
Only 12% of large and regional banks in the U.S. and Canada are running the scenario analyses that regulators are poised to recommend, according to a new survey. Observers say progress has been faster on the other side of the Atlantic, as European banks and their regulators have moved more quickly to develop a uniform system for quantifying risks.
Comerica takes steps to tackle climate risk
The largest bank based in oil-rich Texas is building a framework for gauging the threat that climate change poses to its business and plans to disclose more information on the subject this summer. Meanwhile, its energy loan portfolio shrank 24% year over year.
Fannie Mae prices first credit risk transfer deal since pandemic
The reception in the market to structured single-family CRTs' return at the government-sponsored enterprise was strong enough for it to plan to follow up this transaction with another one next month.
Fannie Mae to resume credit risk transfers in October
The company will return to selling pieces of its credit exposure to private investors during the last three months of the year, but is still evaluating its strategy for 2022.
FHFA proposes modification of capital rules for Fannie and Freddie
The Federal Housing Finance Agency is looking to revise the framework intended for when Fannie Mae and Freddie Mac exit conservatorship in order to encourage the transfer of credit risk to private investors.
Biden plans to order climate risk strategy for financial assets
President Biden plans to direct his administration to develop a strategy on climate-related risks for public and private financial assets, according to a draft document seen by Bloomberg News.
Red flags abound in syndicated lending
Shared national credit balances rose 5% last year, and the percentage of at-risk loans nearly doubled. Regulators point out that banks have stashed away extra capital, but a lot will depend on the speed of the economic recovery and the performance of nonbank loans.
Freddie Mac’s single-family CRT soared to record-high despite pandemic
The $16.9 billion in issuance marked the biggest annual number seen since the government-sponsored enterprise reconstituted its risk sharing program in 2013.
Citi loses bid to recoup massive mistake in surprise ruling
Citigroup unexpectedly lost a legal battle to recover half a billion dollars it sent Revlon lenders, after the embarrassing blunder forced it to answer to regulators and tighten its internal controls.
Fed terminates 2017 enforcement action against Santander
The enforcement action, which concerned deficiencies in the auto lender’s compliance risk management program, was the last remaining regulatory matter Santander had to resolve.
Homeowners association identifier tool aims to mitigate lender risk
Black Knight’s product is designed to assist mortgage lenders in performing due diligence while also preventing heightened risk of foreclosure losses.
OCC finalizes rule punishing banks that cut service to certain sectors
The Office of the Comptroller of the Currency finalized a rulemaking Thursday morning opposed by the industry that forces the largest banks to provide services to gun businesses and other sectors to which banks have curtailed lending.
Foreclosure wave unlikely in 2021, BTIG says
The company expects a good year ahead for mortgage insurers, assuming that rising employment, higher home prices and payment timing deferrals will help them to mitigate risk.
Freddie Mac prices first-ever credit risk transfer linked to SOFR
While using the 30-day SOFR as its index, Freddie Mac structured the deal so it could shift to a one-month term if and when that rate is approved.
Growing e-note use catches FHFA watchdog’s attention
Electronic notes did come in handy this year given the mortgage industry's need to operate remotely, but they also increase the government-sponsored enterprises' responsibility for monitoring the risk of multiple counterparties.
Will Citi snafu bring fresh scrutiny to custodial banks?
Citigroup’s $900 million payment blunder in a normally low-profile part of the financial market dominated by a handful of banks has experts wondering if regulators will uncover a deeper problem.
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