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NCUA Foreclosed-property tenants have 90 days to relocate

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WASHINGTON (9/11/09)--Credit unions that take control of foreclosed real estate must grant tenants of the property 90 days of notice before those tenants can be made to move, the National Credit Union Administration has advised. Under the terms outlined in the Helping Families Save Their Homes Act of 2009, financial institutions must also allow so-called “bona fide” tenants to occupy the foreclosed property until their existing lease expires. However, the 90-day eviction rule would still apply once the foreclosed property is purchased. According to the NCUA, a “bona fide” tenant is one that does not own the property nor is a parent, spouse or child of the property owner. According to the NCUA, the law “does not cover tenants facing eviction in a non-foreclosed property, tenants with a fraudulent lease, tenants who enter in lease agreements after a foreclosure sale, or homeowners in foreclosure.” The law also does not impact state or local laws aimed at protecting the rights of tenants. For the full NCUA release, use the resource link.

GAO analyzes Fannie Freddie options

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WASHINGTON (9/11/09)—The Government Accountability Office (GAO) released a study Thursday that analyzes options for revising the long-term structure of the government-sponsored enterprises, Fannie Mae and Freddie Mac. Just over a year ago, on Sept. 8, the Federal Housing Finance Agency (FHFA) placed the GSEs into conservatorship due to concern that their deteriorating financial condition—identified as $5.4 trillion in outstanding obligations-- would destabilize the financial system. “With estimates that the conservatorship will cost taxpayers nearly $400 billion, GAO initiated this report under the Comptroller General’s authority to help inform the forthcoming congressional debate on the enterprises’ future structures,” the report explains. The report discusses the enterprises’ performance in meeting mission requirements, identifies and analyzes options to revise their structures, and discusses key transition issues. It concludes that it will be necessary for Congress to “reevaluate the roles, structures, and performance of the enterprises, and to consider options to facilitate mortgage finance while mitigating safety and soundness and systemic risk concerns.” Among the options noted by GAO are the following:
* Reconstitute the enterprises as for-profit corporations with government sponsorship, but place additional restrictions on them. While restoring the enterprises to their previous status, this option would add controls to minimize risk; * Establish the enterprises as government corporations or agencies that would focus on purchasing qualifying mortgages and issuing mortgage-backed securities, but eliminate their mortgage portfolios. The Federal Housing Administration (FHA), which insures mortgages for low-income and first-time borrowers, could assume additional responsibilities for promoting homeownership for targeted groups; and * Privatize or terminate them. This option would abolish the enterprises in their current form and disperse mortgage lending and risk management throughout the private sector. Some proposals involve the establishment of a federal mortgage insurer to help protect mortgage lenders against catastrophic mortgage losses.
GAO, as is its practice, took no position on whether to privatize the GSEs or make them fully public, but the report did indicate that both options could have their problems and inefficiencies--like increasing mortgage rates. To read more, use the resource link below.

TARP accountability hearing next week

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WASHINGTON (9/11/09)--There will be a TARP accountability hearing next week, scheduled by the House Financial Services oversight and investigations subcommittee. The hearing is titled “Utilizing Technology to Improve TARP and Financial Oversight.” According to a release from Chairman Dennis Moore (D-Kan.) of the subcommittee the session will focus on the role of technology in efforts to provide transparency and accountability for programs, such as the U.S. Treasury Department’s TARP – or Troubled Asset Relief Program. The subcommittee will also be taking a look at the use of technology to ensure federal agencies provide strong, coordinated oversight of financial services activity. Witnesses are to be announced at a later date.

Inside Washington (09/10/2009)

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* WASHINGTON (9/11/09)--National Credit Union Administration (NCUA) board member Michael E. Fryzel welcomed representatives from FirstCorp CU, Phoenix, to the NCUA headquarters in Alexandria, Va., Wednesday. Fryzel stressed the importance of continuing credit union support for the corporate system. “It is important that natural person credit unions maintain a high degree of support for the corporate system,” he said. This system was created, managed and directed by credit unions, and the future form and function of the corporates is directly dependent on involvement by member credit unions.” From left are: Dave Doss, chairman, FirstCorp CU; Fryzel; Stacy Glidden, FirstCorp Chief Operating Officer, and Pete Pritts, FirstCorp CU chairman and Arizona State CU CEO. (Photo provided by the National Credit Union Administration) ... * WASHINGTON (9/11/09)--Sen. Christopher Dodd (D-Conn.) has said he will remain chairman of the Senate Banking Committee, and financial observers predict that his commitment to that and health care reform could slow financial regulatory reform. Some industry observers speculated that Dodd would succeed the late Sen. Edward Kennedy (D-Mass.) as chairman of the Health, Education, Labor and Pensions Committee (American Banker Sept. 10). Jaret Seiberg, financial services policy analyst for the Washington Research Group, commented that it would have been tough for the Senate to pass a financial reform bill this year even if Dodd had no other commitments. Brian Gardner, KBW Inc. analyst, said the timeline for financial services legislation is “up in the air” and will keep Washington and Wall Street guessing for the next couple months ... * WASHINGTON (9/11/09)--The Internal Revenue Service has released guidance for employer comparable contributions to Health Savings Accounts (HSAs). The guidance relates to the manner and method of reporting and paying the excise tax. The regulations affect employers contributing to employees’ HSAs and Archer MSAs, employers or employee organizations that sponsor a group health plan and certain third parties ... * WASHINGTON (9/11/09)--On Wednesday, the Federal Deposit Insurance Corp. (FDIC) approved a rule that would extend the temporary increase in the standard maximum deposit insurance amount to $250,000 through Dec. 31, 2013 and the 2008 interim rules regarding revocable trust accounts and mortgage servicing accounts ...