Swords into Sort-of Plowshares

Today is clearly a banner – not to mention an expensive – day for mortgage settlements. In our view, the BofA settlement with Fannie Mae combines with the OCC/FRB action and the imminent release of CFPB’s qualified-mortgage rule to put mortgages up front on the Congressional and Administration calendars, with Democrats demanding lots more from servicers that will cost all loads more than they’ve paid to date. Some of these dollars will come in the GSEs’ front doors, but go right back out as pressure grows to implement HARP 3.0.

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