Bank of America's recent mortgage settlement with the DOJ includes a number of striking admissions about its underwriting and origination process in the run-up to the financial crisis. These facts may provide banks and correspondent lenders facing buyback demands with a fresh line of defense.
Banks have very precise metrics for measuring profits and volatility from normal risk. Shouldn't there be an objective way to measure the extreme risk that can determine whether an institution fails or survives?
A program that moves distressed mortgages out of the foreclosure pipeline can save the FHA and GSEs money and give troubled borrowers a better shot at staying in their homes Â-- but only if it's properly implemented.
So long as Fannie Mae and Freddie Mac are backed by the full faith and credit of the U.S. Treasury, they don't need to accumulate any capital save the liquidity necessary to fund their operations.
Bankers can attempt to remedy confusing and ineffective consumer protection laws by assembling a task force of experienced bank attorneys and compliance officers to draft model legislation.
The Federal Housing Administration raised mortgage insurance fees during the financial crisis in order to cover a wave of defaults. Now that the housing market has steadied, the agency should adjust its policies.
Dodd-Frank has failed to solve the too big to fail problem, according to consultant J.V. Rizzi Â-- and some of the best solutions, like breaking up the banks, are also the most unlikely.
