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Fannie Mae and Freddie Mac are pulling back on some mortgages meant to make homeownership more affordable, their latest effort to rein in risk at the behest of their regulator, the Wall Street Journal reported. The two companies are cutting back on the proportion of loans they back to borrowers with small down payments, for example, and mortgages to deeply indebted borrowers. The regulator, the Federal Housing Finance Agency, says it wants Fannie and Freddie to be prepared for a possible economic downturn. Tamping down risk could limit their defaults and produce bigger profits, which in turn could help them appeal to potential investors. The FHFA has made it a priority to get Fannie and Freddie out from under government control, but doing so will likely require the firms to raise billions of dollars from investors. Critics say the changes could run counter to Fannie’s and Freddie’s mission of making homeownership more accessible and affordable.

A reverse mortgage bill aiming to change the way industry professionals do business in the state of New York was signed into law on Friday by Governor Andrew Cuomo, Reverse Mortgage Daily reported. This has codified the bill into New York state law, and Governor Cuomo’s office confirmed to RMD that he had signed it. Assembly Bill 5626 was first passed by the New York State Assembly in May, and takes sweeping aim at what it calls “deceptive practices,” requiring reverse mortgage lenders to provide supplemental consumer protection materials while imposing additional restrictions on lenders related to their payment of insurance premiums and property taxes. The bill also requires that both lenders and borrowers be represented by an attorney at the time of closing, and at least one attorney must be present to conduct the closing itself. Sponsored in the New York State Assembly by Helene E. Weinstein, who represents Assembly District 41 in Brooklyn, the intent of the new law was detailed in a memo circulated to New York state lawmakers as answering the necessity of regulating a complex product that is sold to a protected class with current regulations that are described by the memo as “inadequate.”

Thanks to increases in home prices in 2019, the Federal Housing Administration loan limit will increase for nearly all of the country in 2020, HousingWire.com reported. According to an announcement from the FHA, the 2020 FHA loan limit for most of the country will be $331,760, an increase of nearly $17,000 over 2019’s loan limit of $314,827. That loan limit applies to much of the country, with the figure determined as a percentage of the national conforming loan limit for Fannie Mae and Freddie Mac, which is increasing in 2020 to $510,400. FHA is required by the National Housing Act, as amended by the Housing and Economic Recovery Act of 2008, to set single-family forward loan limits at 115 percent of median house prices, subject to a floor and a ceiling on the limits. FHA calculates forward mortgage limits by Metropolitan Statistical Area and county. FHA’s 2020 minimum national loan limit, or “floor,” of $331,760 is 65 percent of the national conforming loan limit of $510,400. This floor applies to “low-cost areas,” which are counties where 115 percent of the median home price is less than the floor limit.

One of Wall Street’s biggest bundlers of mortgage bonds has moved into rentals, the Wall Street Journal reported. Redwood Trust Inc., which specializes in packaging jumbo home loans into securities, recently sold a $376 million bond backed by rent payments. The deal was its first since acquiring CoreVest American Finance LLC, a lender to landlords, in October. Redwood’s $490 million purchase of CoreVest—as well as a smaller deal in March for fix-and-flip lender 5 Arches—marks a concession to the rise of renters since last decade’s housing crash and the growing slice of the housing market being bought by landlords and flippers. Purchases by such investors accounted for more than 11 percent of U.S. home sales in 2018, their highest share on record, according to CoreLogic Inc. With its acquisitions, Redwood could originate more than $3 billion of loans to landlords and house flippers in 2020, said Matthew Howlett, an analyst with Nomura Instinet. Doing so wouldn’t only produce fees for bundling the bonds, but also more than $300 million of securities—the lowest-rated 10 percent segment of each deal—that produce high yields.

The Federal Housing Finance Agency announced yesterday that it is raising the conforming loan limits for Fannie Mae and Freddie Mac to more than $510,000, HousingWire.com reported. In most of the U.S., the 2020 maximum conforming loan limit will be raised to $510,400, up from 2019’s level to $484,350. This marks the fourth straight year that the FHFA has increased the conforming loan limits after not increasing them for an entire decade from 2006 to 2016. In 2016, the FHFA increased the Fannie and Freddie conforming loan limit for the first time in 10 years, and since then, the loan limit has gone up by $93,400. Back in 2016, the FHFA increased the conforming loan limits from $417,000 to $424,100. Then, the next year, the FHFA raised the loan limits from $424,100 to $453,100 for 2018. And in 2018, the FHFA increased the loan limit from $453,100 to $484,350 for 2019.

A storied $125 million mansion in Beverly Hills that was featured in “The Godfather” is in bankruptcy protection, Bloomberg News reported. Real-estate investor and attorney Leonard Ross filed for chapter 11 protection for the business that holds title to the estate on Sunday, listing $75 million in liabilities. A hearing is scheduled today in Los Angeles Superior Court where creditors are seeking the appointment of a receiver for the property in a separate lawsuit. Ross has been embroiled in a dispute with private lenders who hold a mortgage on the property. He sued them in September, claiming he was manipulated into a loan agreement four years ago. According to his complaint, the lenders took advantage of Ross when he was going through a personal tragedy after the loss of his daughter. The lenders filed a cross-complaint and asked for the appointment of a receiver because, they said, the mansion is filled with period furnishings and artwork that is part of the collateral for the loan and is easily removed. The lawsuit will likely be put on hold as a result of the bankruptcy filing. Known as the Beverly House, the mansion was built in 1927 for Milton Getz, executive director of the Union Bank & Trust Co. In 1946, it was bought by William Randolph Hearst who lived there with Marion Davies until his death in 1951. It’s where John F. Kennedy and his wife Jacqueline spent their honeymoon. And in the 1972 Francis Ford Coppola movie, it’s where “consigliere” Tom Hagen visits a Hollywood studio mogul to persuade him to give a movie role to Don Corleone’s godson, Johnny Fontane. When reason doesn’t prevail, the studio boss wakes up in the morning with the severed head of his favorite stallion in his bed.