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White House Details Refinance Program That Needs Congressional Action, May Have Limited Impact

President Obama this week called on Congress to enact legislation to refinance non-agency borrowers through the FHA, to be paid for by large financial institutions, and to force Fannie Mae and Freddie Mac to be more accommodating. Most observers say the proposals stand little or no chance in the bitterly divided Congress, and that they might have little more success than earlier FHA refi programs for non-FHA borrowers. Under the latest proposal, borrowers with conforming-balance loans not financed by the government-sponsored enterprises would be able to get refi loans from the FHA. To be eligible, the...

Qualified Mortgage Rule Is CFPB’s Top Priority, Latest Round of Disclosures Come as Project End Nears

Consumer Financial Protection Bureau Director Richard Cordray this week confirmed to members of Congress that the agency’s top mortgage regulatory priority is its forthcoming rule on qualified mortgages – something it expects to finalize this summer. Separately, the agency last week quietly complied with a disclosure practice that all other federal entities involved in rulemaking follow: the release of a regulatory agenda. The CFPB filing, after officials bickered with House Republicans last week over the issue, does not include several key projects, such as devising rules on unfair and deceptive practices...

Industry Groups Raise Concerns About Timing of Key Mortgage Regulations

The six federal agencies that have to respond to massive protests over a proposed qualified residential mortgage definition have offered little guidance on their next step, one that industry groups say is critical given its interaction with a separate rule that sets standards for qualified mortgages that show the borrower has the ability to repay a loan. “We will probably see a QM rule before a QRM rule,” said Joseph Pigg, senior counsel at the American Bankers Association. “Getting six regulatory agencies to agree will make QRM a longer process,” he noted. The QM/ability-to-repay rule is under...

BofA Restructuring Helps Make Wells Fargo Top Mortgage Servicer at the End of 2011

Wells Fargo reclaimed the top ranking in residential mortgage servicing at the end of 2011, a position that the firm last held back in 2006. A new Inside Mortgage Finance ranking and analysis shows that Wells continued to build its mortgage servicing portfolio through robust loan origination activity, but it wasn’t easy. Wells originated $120.5 billion in new loans during the fourth quarter, but managed to increase its servicing portfolio by just $7.5 billion, a 0.4 percent increase. That relatively small increase was enough to move well ahead of Bank of America, which reported a huge $165.8 billion net...

Fannie and Freddie May Spurn Enhanced Incentives To Reduce Principal in Latest HAMP Upgrade

A new Treasury announcement sweetens the deal for Fannie Mae and Freddie Mac to allow principal forgiveness in loan modifications, but it’s not clear whether the government-sponsored enterprises, and their regulator, will abandon their opposition to writedowns. New changes in the Home Affordable Modification Program raise the maximum incentives for principal reduction from the current range – 6 percent to 18 percent of the amount forgiven – to a range of 21 percent to 63 percent. The Treasury Department said it would, for the first time, pay these incentives to the GSEs if they agree to write down the...

House GOP Bill Would Mandate Fair-Value Federal Budget Accounting to Fannie, Freddie Mortgage Market

Fannie Mae and Freddie Mac would be brought “on budget” by adding the two government-sponsored enterprises’ outstanding obligations to the federal deficit, while also mandating the use of “fair value” accounting for the FHA to take into account risk as well as borrowing costs, under legislation sponsored by a high-ranking House Republican. Last week, the House Budget Committee passed H.R. 3581, the Budget and Accounting Transparency Act of 2012, introduced by Rep. Scott Garrett, R-NJ, as part of a comprehensive package of 10 reform bills by House GOP members who are pushing to enforce spending...

States Get a Weekend to Ponder $25 Billion Settlement Over Robosigning Controversy

The deadline for the state attorneys general to determine whether they will join the multistate settlement of mortgage foreclosure and servicing practices has been extended from Feb. 3 to Feb. 6. While some AGs have definitively stated whether they are in or not, Nevada’s Catherine Cortez Masto and others are still seeking more information about the settlement terms. For a settlement that’s taken more than 15 months to negotiate, few are surprised the deadline has been pushed back. If anything, the mere three-day delay is welcome news for observers used to more than a year of back and forth. The new...

Mortgage Lending Trade Groups Ask HUD to Delay Fair Lending Proposed Rule Before Supreme Court Hearing

A group of six real estate finance trade organizations has called upon the Department of Housing and Urban Development to hold off on implementing a proposed rule on the “discriminatory effects standard” of the Fair Housing Act until the U.S. Supreme Court can weigh in on the issue this spring. The American Bankers Association, American Financial Services Association, Consumer Bankers Association, Consumer Mortgage Coalition, Independent Community Bankers of America and Mortgage Bankers Association asked HUD to postpone its rulemaking process to establish uniform standards for discrimination under the...

Home-Equity Lenders Need to Be Vigilant In Assessing Risk, Making Loss Reserves

Federal banking regulators this week reminded banks and thrifts to pay close attention to how they monitor risks and calculate loss reserves in their home-equity loan business. An interagency supervisory memo sent this week does not change the regulators’ policy on allowance for loan and lease losses for closed-end second mortgages and home-equity lines of credit, but it urges lenders to “monitor all credit quality indicators” relevant to junior liens. Although many observers have raised concerns about the risk of second mortgages, delinquency rates on loans held by banks, thrifts and credit unions have been lower...

The Mortgage Market at a Glance

Weekly mortgage rates and application survey data as well as indexes for ARMs.