Are your buyback protections evolving as quickly as the risk is?

Fannie Mae and Freddie Mac wrapped up their repurchase investigations on seasoned loans at the end of 2013. And, yet, plenty of buyback risk remains. From the government-sponsored enterprises, the risk is now mostly focused on newly originated loans, which are undergoing more reviews and getting kicked back for smaller infractions. Elsewhere in the federal government, two long-armed statutes, the Financial Institutions Reform, Recovery and Enforcement Act and the False Claims Act, are helping the U.S. Department of Justice (on behalf of the FHA) to scrutinize legacy loans—and secure payouts in the hundreds of millions or even billions of dollars. And non-agency MBS investors are also still pursuing, and securing, big-money financial solace for claims based on old loans. In an updated 7th edition of the Complete Guide to Mortgage Buybacks, Inside Mortgage Finance looks at the current state of repurchases and indemnifications, from legacy issues to new production, from agency and government-backed loans to non-agency securities to mortgage insurance. The guide includes sections on Fannie Mae and Freddie Mac, including information on their revised rep-and-warrant framework and quality control and loan-review procedures; The FHA and Ginnie Mae, with information on the FHA's plan to reduce the need for credit overlays and tips for handling indemnification requests; Non-Agency MBS, with discussions of litigation and settlements and tactics that have increased the statutes of limitations; Mortgage Insurers and the new master policies; Lender Issues, including impacts on smaller lenders and correspondents; and Buybacks Data, with charts detailing bank and thrift repurchase activity and agency GSE buyback actions for 6M14. Partial Table of Contents Fannie Mae and Freddie Mac +Revised Rep-and-Warrant Framework +Increase in Loan File Reviews +Controlling Risk by Managing Loan Quality +Qualified Mortgages +Revisions to Buyback Requirements +Discretionary File Reviews +Accuracy of Submissions +Post-Purchase Corrections +Eligibility Violations +Freddie's Quality-Control Focus +Targeted Sampling +Quality Control Trends and Findings +Contract Issues with the GSEs +Suggestions for Lenders +The False Claims Act +The Financial Institutions Reform, Recovery, and Enforcement Act +Settlements with Lenders The FHA and Ginnie Mae +Blueprint for Access +Monetary Recoveries from Settlements with Lenders +HUD's Auditing Options +Indemnification Procedures +Issues Prompting Indemnification Requests +Suggestions for Handling Indemnification Requests +Appeals Process +Litigation Trends +Issues with Mortgage Insurance Certificates +Mortgagee Review Board Actions Non-Agency MBS +BofA's Settlement as a Model +RMBS Working Group +DOJ's Use of FIRREA +Statute of Limitations +Settlements of FHFA Lawsuits +SEC Seeks Admissions of Guilt Mortgage Insurers +Master Policy from GSEs +Mortgage Insurance Stand-In Program Lender Issues +Impact on Smaller Lenders +Large Firms Seeking Buybacks from Correspondent Lenders +Suggestions for Fighting Buyback Requests Know your buyback exposure and your options.

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