Dodd-Frank Act

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

November 10, 2014 - Inside the CFPB

Empowered GOP Likely to Raise Pressure on CFPB Come January

The consensus among political observers is that last week’s big Republican wave on Election Day will result in a lot more political bluster from critics of the CFPB on Capitol Hill. However, it’s unlikely to have enough short-term intensity or long-term staying power to effect any big changes that could get past the veto pen of a strongly supportive President Barack Obama. “While there may be a push for the elimination of the CFPB, such a change is highly unlikely given the [Obama] administration’s support for the bureau,” the American Bankers Association said in a post-election analysis. “Expect increased scrutiny in the Senate on the CFPB’s proposals and a continued push to change the structure of the CFPB from a ...


November 7, 2014 - Inside FHA Lending

HUD Rejects CFPB’s QM Cure Provision

The Department of Housing and Urban Development will not take on the new points-and-fees cure provision for qualified mortgages adopted by the Consumer Financial Protection Bureau. The agency is concerned that lenders might inadvertently violate the FHA’s statutory 3.5 percent downpayment requirement. HUD adopted other changes in the CFPB’s revised final rule on ability to repay and qualified mortgages (ATR/QM) to maintain consistency but saw no need for any further ability to cure points-and-fees errors. Reimbursement of any excess points and fees to the borrower could take away from the mandatory 3.5 percent downpayment and render the loan ineligible for FHA insurance, the agency explained in a notice published in the Nov. 3 Federal Register. HUD said it would provide lender guidance under its own QM rule on ...


November 6, 2014 - Inside Mortgage Finance

Lessons Learned From Enforcement Trends Help Lenders Cope With New UDAAP Environment

As mortgage lenders continue to feel their way around the world of unfair, deceptive or abusive acts or practices (UDAAP) as defined by the Dodd-Frank Act and the Consumer Financial Protection Bureau, there is much they can learn from a close examination of recent enforcement actions. During a webinar this week sponsored by Inside Mortgage Finance, Mercedes Tunstall, a partner with Pillsbury Winthrop Shaw Pittman, said CFPB consent orders show that the bureau is watching telemarketing practices very closely. The CFPB is...


October 31, 2014 - Inside MBS & ABS

Critics Find Plenty to Stew Over in New Risk- Retention Requirements for MBS and ABS

Participants in the residential mortgage market were largely pleased with the risk-retention requirements finalized last week for certain non-agency MBS. However, the requirements, which also cover commercial MBS and other ABS, drew a wide range of criticism from others. “The short version is that the rule doesn’t require meaningful credit risk retention where it counts, and imposes significant market-shaping safe-harbor requirements where skin in the game isn’t so important,” said Adam Levitin, a professor of law at the Georgetown University Law Center. He noted...


October 24, 2014 - Inside MBS & ABS

Final Rule Setting Risk-Retention Requirements For Non-Agency MBS Features Broad Exemptions

Six federal regulators approved a final rule this week setting risk-retention requirements for residential MBS transactions, exempting the entire agency MBS universe and non-agency securities backed by qualified mortgages. There is not that much left. The risk-retention requirements for residential mortgages will take effect one year after the final rule is published in the Federal Register, which is expected shortly. Regulators opted to align the definition for qualified-residential mortgages with the standards established by the Consumer Financial Protection Bureau for QMs. The sponsor of a non-agency MBS that includes non-QRMs will have to retain at least 5.0 percent of the balance of the security, as required by the Dodd-Frank Act. In 2011, federal regulators proposed...


October 23, 2014 - Inside Mortgage Finance

Change in Control of Capitol Hill Could Spur Some Legislative Activity; GSE Reform Still Lacks Traction

If Republicans take control of the U.S. Senate in the upcoming elections, Congress next year may actually produce some mortgage-related legislation, according to political analysts participating on a panel at the Mortgage Bankers Association’s annual convention in Las Vegas this week. Any successful legislation will be narrowly targeted and not address complex problems like building a new mortgage finance system or resolving the status of Fannie Mae and Freddie Mac, analysts agreed. Over the last four years, the Democrats’ top priority has been preserving...


October 16, 2014 - Inside Mortgage Finance

CFPB Throws Industry a Few Bones on TRID Rule; Are There More to Come and, If So, Exactly When?

The Consumer Financial Protection Bureau last week proposed two narrow revisions to its complex mortgage origination disclosure rule, leaving the industry guessing what further changes could come as lenders gear up to implement a massive rule known as TRID: the Truth-in-Lending/Real Estate Settlement Procedures Act integrated disclosure. For most lenders, the most significant proposed change would relax the requirement that lenders provide a revised loan estimate on the same day that a consumer’s rate is locked. After considering industry feedback, CFPB staff concluded that such a short turnaround may be challenging for lenders that allow consumers to lock interest rates late in the day or after business hours. This could mean...


October 13, 2014 - Inside the CFPB

Dodd-Frank Rules Uniquely Affecting Manufactured Housing

The CFPB issued a report earlier this month finding, more often than not, that owners of manufactured homes pay higher interest rates for their loans than borrowers whose homes were built onsite. “In 2012, about 68 percent of all manufactured-housing purchase loans were considered ‘higher-priced mortgage loans,’ compared with only 3 percent of site-built home loans,” the CFPB said. Two out of three manufactured-home owners eligible for mortgages finance with more expensive personal property (“chattel”) loans instead. That’s good and bad. On the one hand, chattel loans have lower origination costs and quick closing timelines, as the bureau noted. But on the other hand, they also have “significantly fewer consumer protections than mortgage loans,” the bureau said. For example, only ...


Poll

What is it going to take to convince lenders to loosen the credit box (i.e., remove underwriting overlays)?

The recent rep and warranty changes announced by the Federal Housing Finance Agency should go a long way in protecting lenders from future buybacks and help expand mortgage credit.
There won’t be any significant elimination of underwriting overlays until the government stops seeking huge mortgage-related penalties and settlements from lenders.
There shouldn’t be any expansion of the mortgage credit box since looser underwriting is what caused the recent mortgage crisis.

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