Dodd-Frank Act

Browse articles from all of our Newsletters related to Dodd-Frank Act.

May 23, 2013 - Inside Mortgage Finance

Adverse SCOTUS Ruling on Recess Appointments Can Result in Further Confusion, Disruption in Government

Whichever way the U.S. Supreme Court rules on the constitutionality of presidential recess appointments, the decision would probably cause more uncertainty and turbulence in the industries the ruling will likely affect, according to legal and policy analysts. SCOTUS is considering a petition filed last month by the Obama administration and the National Labor Relations Board to review a controversial ruling by the District of Columbia Court of Appeals that calls into question the validity of President Obama’s appointment of three new members of the board in January. In Noel Canning v. NLRB, the plaintiff challenged...


May 23, 2013 - Inside Mortgage Finance

Bickering in Congress Over ATR Rule and Qualified Mortgages Continues, Legislative Changes Unlikely

Republicans and even some Democrats in the House are calling for significant changes to the Consumer Financial Protection Bureau’s ability-to-repay rule, but legislative changes appear unlikely as Democrats oppose most of the GOP proposals. One bill that is furthest along the uncertain legislative process is HR 1077, the “Consumer Mortgage Choice Act,” which would exempt certain fees from the 3 percent cap on points and fees for qualified mortgages under the ATR rule. The bill has 34 co-sponsors, including nine Democrats. Sens. Joe Manchin, D-WV, and Mike Johanns, R-NE, introduced companion legislation in the Senate last week. The bills have...


May 17, 2013 - Inside MBS & ABS

Some Agreement Among Non-Agency Participants On Rating Rotation in Lieu of Franken Proposal

While non-agency MBS participants largely oppose a credit rating assignment system proposed by Sen. Al Franken, D-MN, some of the main players in the market endorse a model based on ratings rotation. At a roundtable hosted by the Securities and Exchange Commission this week, Martin Hughes, CEO of Redwood Trust, said issuer-paid rating conflicts could be reduced by requiring non-agency MBS issuers to alternate rating services so that one firm didn’t rate more than two consecutive deals from the issuer. He noted that Redwood has established a self-imposed rotation between Moody’s Investors Service and Standard & Poor’s on its non-agency MBS issuance. “The requirement to frequently alternate among the nationally recognized...


May 3, 2013 - Inside Nonconforming Markets

CFPB Clarifies Non-Agency QM Standards

In response to concerns from industry participants, the Consumer Financial Protection Bureau recently issued proposed clarifications to its ability-to-repay and servicing rules. The proposal includes changes to underwriting standards for non-agency “qualified mortgages.” The debt and income ratio standards for non-agency QMs were included in Appendix Q of the ATR rule. The standards were largely based on the FHA’s underwriting process. “The bureau has received numerous inquiries ...


May 3, 2013 - Inside Nonconforming Markets

Agreement in House on Parts of Non-Agency Bill

A bipartisan group of members of the House Financial Services Committee is coming to agreement on portions of pending legislation to increase non-agency activity. Rep. Scott Garrett, R-NJ, is set to introduce legislation shortly that has some support from Rep. Maxine Waters, D-CA, the ranking Democrat on the committee. Garrett’s “Private Mortgage Market Investment Act” was approved on a party-line vote by the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises ...


April 25, 2013 - Inside Mortgage Finance

After Rushing to Meet Dodd-Frank Deadline, CFPB Proposes Changes to Clean Up its ATR Rulemaking

The Consumer Financial Protection Bureau late last week issued a proposed rule to clarify a number of issues about qualified mortgages and other aspects of its ability-to-repay final rule promulgated in January that is set to take effect in early 2014. The agency proposed to clarify a key issue regarding the QM status of loans originally securitized by Fannie Mae or Freddie Mac, or insured by the FHA or VA, that are later subject to repurchase demands. Lenders have been concerned that such loans might lose their automatic QM status as agency loans, but the CFPB said they will not. “The fact that a [government-sponsored enterprise] or agency demands...


April 18, 2013 - Inside Mortgage Finance

CFPB Compliance Guide on ATR Rule Leaves Large Lenders Chomping at the Bit for Guidance

The Consumer Financial Protection Bureau last week issued a small-entity compliance guide on its groundbreaking ability-to-repay rule promulgated in January. It’s a document that may help smaller firms but leaves big players wanting more. “Our goal with this guide is to provide a comprehensive rule summary in a plain language and Frequently Asked Questions format, which makes the content more accessible and consumable for a broad array of industry constituents, especially smaller businesses with limited legal and compliance staff,” the CFPB said. The bureau recommended...


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What should be done to “reform” Fannie Mae’s and Freddie Mac’s position in the mortgage market?

Wind the two GSEs down as quickly as possible while setting up some new government guarantee program for conservatively underwritten conventional mortgages.
Let the two GSEs continue to funnel money to the Treasury while developing a plan to take them out of conservatorship as private companies.
Do nothing since the housing market is too dependent on the two GSEs and Congress is unlikely to agree on a major change in the status quo anytime soon.

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