June 19, 2019

In This Issue:

  • Gov. Abbott Signs Last of TLTA's Legislative Priorities as 86th Legislative Session Officially Closes
  • Democrats, Republicans Vote Unanimously to Pass Flood Insurance Reform
  • Moody's: Increased Competition for Fannie, Freddie Would Be a Credit Negative
  • SEC, FBI Reportedly Investigating Live Well Financial Collapse

Governor Abbott Signs Last of TLTA's Legislative Priorities as 86th Legislative Session Officially Closes 

TLTA | June 18, 2019
On Friday, Gov. Greg Abbott signed HB 1833 – one of four legislative priorities supported by TLTA this session. HB 1833 establishes a mechanism by which the authority to sell real properties on behalf of partnerships and limited liability corporations can be assigned for transactions under $1,000,000.
 
Gov. Abbott also signed the other bills in the package of legislation our industry championed this session:
 
HB 3228 - clarifies who has access to participate in TDI rate hearings 
HB 1614 - updates and modernizes TTIGA statute  
SB 2128 - establishes RON-related statute creating a mechanism to 'paper out' and record e-notarized documents and e-closing documents
 
We are grateful that Gov. Abbott joined the Texas Legislature in approving 100% of our industry's legislative priorities.
 
Sunday marked the end of the window of time during which the governor could sign or veto legislation approved by the 86th Legislative Session. He vetoed 58 bills, signed more than 1300 others, and approved the $250 billion biennial state budget without exercising his line item veto authority. 
 
A full report on the 86th Session legislation of interest to our industry is in development. If you have questions about the outcome of specific pieces of legislation, please submit them to Aaron Day.


Democrats, Republicans Vote Unanimously to Pass Flood Insurance Reform

HousingWire | June 18, 2019
In a rare show of unity, Democrats and Republicans on the Financial Services Committee of the U.S. House of Representatives voted unanimously to pass a five-year extension to the National Flood Insurance Program that includes a mandate to improve the nation’s flood maps. 

The bill provides $500 million a year over five years for updating maps and modernizing technology to identify high-risk zones. It also includes a “continuous coverage” provision that allows borrowers who leave the program to try private flood insurance to return without paying a penalty. That measure is aimed at encouraging the growth of the nascent private market for flood insurance.

Congress has passed a dozen short-term extensions since 2017 as it wrangled over reforming the program that protects over 5 million U.S. homes. About 40,000 U.S. property sales a month would be nixed if NFIP coverage wasn’t available, because most mortgages require homes located in high-risk flood areas to be protected, according to the National Association of Realtors.
 
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Moody's: Increased Competition for Fannie, Freddie Would Be a Credit Negative

HousingWire | June 18, 2019
Last week, Federal Housing Finance Agency Director Mark Calabria outlined his GSE reform wish list for lawmakers in his first annual Report to Congress since taking the helm at the agency.

In it, Calabria urged Congress to take steps to increase competition for Fannie Mae and Freddie Mac, stating that more competitors in the space “would reduce market reliance on either Enterprise and enhance market stability, as well as benefit homebuyers.”

But Moody’s Investors Service says increased competition would also amount to a credit negative for both agencies.

“Increased competition would reduce the residential mortgage market’s reliance on Fannie and Freddie and reduce their systemic importance within the U.S. financial system, a credit negative for Fannie’s and Freddie’s individual credit profiles,” Moody’s wrote in a paper published Sunday.
 
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SEC, FBI Reportedly Investigating Live Well Financial Collapse

HousingWire | June 18, 2019
Trouble continues to brew for Live Well Financial, the forward and reverse mortgage lender that unexpectedly went bust last month, as court documents reveal that federal authorities are looking into the lender’s dealings.

According to documents filed recently by some of Live Well’s creditors, Flagstar Bank and Mirae Asset Securities, the Federal Bureau of Investigation and the Securities and Exchange Commission are looking into Live Well.

Last week, the two creditors teamed with a third – Industrial and Commercial Bank of China Financial Services – to file petitions with the U.S. Bankruptcy Court in Delaware to force Live Well into involuntary Chapter 7 bankruptcy.

In those filings, Live Well’s management was called into question, with both Mirae and Flagstar stating that they had been contacted by authorities about the lender.

According to Mirae, it received a phone call from the SEC on the very day Live Well announced its closing. In sworn testimony, Mirae said that it learned during that call that authorities are investigating the lender and its representatives, including its CEO, Michael Hild.

Then, Mirae said that less than three weeks later, the Assistant U.S. Attorney from the Southern District of New York contacted Mirae about a potential investigation into Live Well.
Flagstar made similar claims in its own filing, stating that it was subpoenaed by the SEC on May 9 for records regarding its dealings with Live Well.

Flagstar also said that in early June, it was contacted by the Bank Fraud Division of the FBI regarding a potential investigation into Live Well.
 
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