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A nonprofit watchdog group yesterday called for an investigation of David H. Stevens, chief executive of the Mortgage Bankers Association, arguing that he may have violated ethics laws relating to his previous position as commissioner of the Federal Housing Administration, the New York Times reported today. The National Legal and Policy Center, a right-leaning ethics-in-government group, urged the U.S. Attorney for the District of Columbia and the inspector general at the Housing and Urban Development Department to conduct an official review of Stevens’s activities while he was at HUD and after he left the agency in March 2011 to lead the mortgage association, one of the most powerful lobbying organizations in Washington, D.C. An investigation, the center said, would determine whether Stevens had violated federal rules barring former government officials from “communicating or appearing on behalf of persons or entities with respect to matters in which the former officials ‘personally and substantially participated’ during their government service.”

To broaden mortgage access, the U.S. government wants to revive the market that brought the economy to its knees, but years of effort haven’t succeeded in rekindling it, the Wall Street Journal reported today. For the eighth straight year, the market for mortgage-backed securities issued by private financial institutions, as opposed to government-backed companies or agencies, was moribund in 2015. The volume of such bonds backed by loans to borrowers with shakier credit histories—known as subprime or Alt-A—fell 36 percent from the previous year to $1.67 billion, according to Inside Mortgage Finance. By comparison, lenders issued $269.1 billion of such bonds in 2003, before the housing boom. Government officials do want private investors to take on a bigger role, and in 2014 the Treasury Department launched an effort with lenders, investors and other mortgage-market participants to diagnose and fix issues restraining the market. An announcement is set for today to outline principles agreed on by many of the major players to lay the groundwork for a new market. Today’s announcement mostly outlines the principles of a “deal agent,” a firm that would look out for investors’ interests as a bond is administered. In the newly created role, the agent would enforce the terms of a mortgage bond and have the power to negotiate changes in terms if needed. Though investors have released the proposal, it will be up to bond issuers and investors to implement the deal agent, which would be paid out of a bond’s proceeds.

UBS AG has agreed to pay $33 million to resolve a U.S. regulator's claims that it sold toxic mortgage-backed securities to credit unions that later failed, Reuters reported yesterday. The deal, disclosed in a filing in Manhattan federal court, resolves one of several lawsuits by the National Credit Union Administration against banks over their sale of mortgage-backed securities before the 2008 financial crisis. The deal boosts to nearly $2.46 billion the amount the NCUA has recovered from banks through lawsuits it began filing in 2011, according to statistics previously provided by the U.S. regulator.

Purchases of new homes dropped more than forecast in January as contract signings slumped in the western U.S. by the most since May 2010, Bloomberg News reported yesterday. Sales declined 9.2 percent to a 494,000 annualized pace after a 544,000 rate in December that was the strongest in 10 months, Commerce Department data showed yesterday. January sales were the weakest in three months.

Bank of America Corp. is rolling out a new-mortgage product that would allow borrowers to make down payments of as little as 3 percent, in a move that would represent an end run around a government agency that punished the bank for making errors on similar loans, the Wall Street Journal reported today. The new mortgage program, which the Charlotte, N.C.-based lender plans to unveil on Monday, will let borrowers avoid private mortgage insurance, a product to protect mortgage lenders and investors that is usually required for low-down-payment loans. That could make the new loans cheaper than those offered through the Federal Housing Administration, the government agency that has won big settlements from banks in recent years for what the lenders describe as minor errors. The FHA doesn’t make loans but insures lenders against default on mortgages that can have down payments of as little as 3.5 percent and a credit score of as low as 580, on a scale of 300 to 850. When lenders make the loan, they have to certify that everything in a loan file is accurate. Bank of America’s new mortgage cuts the FHA out of the process. Instead, the new loans are backed in a partnership with mortgage-finance giant Freddie Mac and the Self-Help Ventures Fund, a Durham, N.C.-based nonprofit. Bank of America agreed to pay $800 million to settle claims of making errors on FHA-backed loans in 2014.

The director of the federal regulator of mortgage giants Fannie Mae and Freddie Mac is urging Congress to reconsider the conservatorship structure under which the two enterprises operate, MarketWatch.com reported yesterday. “I am signaling my belief that some of the challenges and risks we are managing are escalating and will continue to do so the longer the Enterprises remain in conservatorship,” Federal Housing Finance Agency Director Mel Watt said yesterday. The practice of sweeping all profits from Fannie and Freddie to the government is the most serious risk, Watt said. The enterprises are allowed to retain a “capital buffer” after the sweeps, but that amount is shrinking each year. The capital buffers will dwindle to zero by January 1, 2018, Watt said. That will leave nothing to smooth out quarterly choppiness in profits, like the loss Freddie Mac sustained in the third quarter as interest-rate derivatives went sour. That might mean Fannie or Freddie have to tap Treasury, Watt warned, and undermine investor confidence in the housing finance system.

Total U.S. household debt continued to climb in the fourth quarter of 2015, according to the Federal Reserve Bank of New York’s Quarterly Report on Household Debt and Credit, Bloomberg News reported today. Households added $51 billion of debt in the final three months of the year, pushing total indebtedness to $12.12 trillion at the end of the quarter. Mortgage debt remains the leading contributor by far, but student loan debt also continued its ascent. Nationwide, the per capita debt is about $46,170, the Federal Reserve Bank of New York said in its most recent report.