Sector developments and company hires

RFI issued on sustainable housing
The FHFA is requiring Fannie Mae and Freddie Mac to submit Equitable Housing Finance Plans by end-2021, with the plans to be updated annually. The plans will identify and address barriers to sustainable housing opportunities, including the GSEs’ goals and action plans to advance equity in housing finance for the next three years. The FHFA also will require the enterprises to submit annual progress reports on the actions undertaken during the prior year to implement their plans.

Under a recently signed MOU between the FHFA and HUD regarding fair housing and fair lending coordination, HUD provided insight and expertise regarding this equitable housing finance initiative. Additionally, the FHFA has issued a request for input ​that seeks public comments until 25 October, to aid the enterprises in preparing their first plans and to aid the FHFA in overseeing the plans.

In other news…

CMBS delinquencies drop
The US CMBS delinquency rate fell 26bp to 3.33% in August from 3.59% in July, representing the largest monthly decline since the onset of the pandemic, according to Fitch. The agency credits the improvement to continued strong resolution volume, fewer new delinquencies and robust new issuance.

Resolutions totaled US$1.6bn in August, compared with US$1.7bn in July. These were mostly hotel (totalling US$490m) and retail loans (US$820m), including six regional malls (US$498m) - two of which were disposed of - and the US$132m PECO Portfolio (securitised in LBUBS 2007-C6) that was resolved with a 100% loss.

Meanwhile, new delinquencies were US$610m in August - the lowest monthly volume since April 2020 - down from US$853m in July. The roll rate of 30 to 60 days delinquent was only 8% from July to August, down from 35% from June to July. Finally, 30-day delinquencies fell to US$1.9bn from US$2.5bn.

Civil money penalty issued
The OCC has assessed a US$250m civil money penalty against Wells Fargo, based on the bank’s unsafe or unsound practices related to deficiencies in its home lending loss mitigation programme and violations of the 2018 Compliance Consent Order. The OCC also issued a Cease and Desist Order against the bank, based on its failure to establish an effective home lending loss mitigation programme.

The order requires the bank to take broad and comprehensive corrective actions to improve the execution, risk management and oversight of its loss mitigation programme. The order restricts Wells Fargo, while the order is effective, from acquiring certain third-party residential mortgage servicing and requires the bank to ensure that borrowers are not transferred out of its loan servicing portfolio until remediation is provided - except as required by an investor pursuant to a contractual right.

The OCC penalty will be paid to the US Treasury.