March 2016 - RIP Dodd Frank

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TH E M R EP O RT | 61 O R I G I NAT I O N S E R V I C I N G A NA LY T I C S S E C O N DA R Y M A R K E T SECONDARY MARKET THE LATEST FHFA Refocuses HARP Awareness Amid New Numbers New #HARPNow campaign targets borrowers in Florida, Illinois, Michigan, and more. F or a program that was only supposed to be temporary, the Home Affordable Refinance Program (HARP) is still going rather strong. In mid-February, the Federal Housing Finance Agency (FHFA) released its Q 4 2015 totals for loans refinanced through HARP. FHFA reported that 21,079 HARP refinances were com - pleted between September and December, bringing the grand total up to nearly 3.381 million since the program's 2009 launch. According to the agency, 28 percent of all HARP refinances for underwater borrowers—those with a loan-to-value ratio greater than 105 percent—were for 15- and 20-year mortgages, through December. Such loans help bor - rowers build equity faster than traditional 30-year mortgages, and FHFA found that borrow- ers who refinanced through HARP had a lower delinquency rate compared to HARP-eligible borrowers who did not refinance through the program. FHFA also estimated that as of Q 3 2015, more than 367,600 bor - rowers nationwide still have a financial incentive to refinance through HARP before the pro- gram expires this December. To get through to the large pool of homeowners who could still take advantage of HARP, the FHFA is starting a social media campaign called #HARPNow. The initiative will be focusing its outreach efforts mainly on the 10 states with the highest number of borrowers thought to be "in-the- money," meaning they meet the basic HARP eligibility require - ments, have a remaining mortgage balance of $50,000 or more, have a remaining term of greater than 10 years, and have an interest rate at least 1.5 percent higher than current market rates. The states with the most eligible borrowers, in order, are Florida, Illinois, Michigan, Ohio, Georgia, California, Pennsylvania, New Jersey, New York, and Maryland. Florida, in fact, has nearly as many eli - gible borrowers as Illinois and Michigan combined, with 51,100 HARP-eligible borrowers. FHFA has teamed up with the Treasury, Fannie Mae, Freddie Mac, and local housing experts for town hall-style events in Chicago, Miami, Detroit, Phoenix, Atlanta, Newark, and Columbus throughout 2016. FHFA estimates these borrowers could save as much as $2,400 a year on their mortgage payments. Deutsche Bank Prepares to Tackle Legal, Law Enforcement Troubles CEOs call the organization 'absolutely rock solid.' S ince the close of the financial crisis, Ger- many's largest bank, Deutsche Bank, has faced several settlements related to violations of U.S. sanctions, rigging of interest-rate bench - marks, and allegations that it defrauded mortgage issuers Fan- nie Mae and Freddie Mac. Now, the bank is ready to resolve its legal and law enforce- ment problems. As of February 10, the bank has paid over $9.3 billion in fines and legal settle- ments since 2008, according to a Bloomberg article. In addition to dealing with a variety mortgage-backed securi - ties suits, Deutsche Bank is also facing an investigation by U.S. and U.K. authorities over whether its internal controls failed to catch some $10 billion in transactions that may have moved money out of Russia, Bloomberg reported. In August 2015, the 5th U.S. Circuit Court of Appeals in New Orleans revived a lawsuit filed by the Federal Deposit Insurance Corp., which accused Deutsche Bank, Goldman Sachs, and the Royal Bank of Scotland of fraud. The accusations stem from $840 million in mortgage-backed secu - rities that were sold to a Texas bank that later failed, according to multiple media reports. In a December 2013 case, Deutsche Bank said it would pay $1.9 billion to settle claims that it defrauded Fannie Mae and Freddie Mac in the sale of mortgage-backed securities before the 2008 financial crisis, accord - ing to an article from Reuters. "Today's agreement marks an- other step in our efforts to resolve the bank's legacy issues, and we intend to make further progress in this regard throughout 2014," said co-CEOs Juergen Fitschen and Anshu Jain in a statement. In a note to employees, co- CEO John Cryan said the bank is "absolutely rock solid" and has a plan to cover its legal costs. "I am personally investing time to resolve successfully and speedily open regulatory and legal cases. A small group of senior people, led by me, will focus on this." 3.381 M Total loans refinanced through HARP since the program's 2009 launch. "I am personally investing time to resolve successfully and speedily open regulatory and legal cases. A small group of senior people, led by me, will focus on this." —John Cryan, CEO, Deutsche Bank

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