Legislation

Browse articles from all of our Newsletters related to Legislation.

September 23, 2016 - Inside MBS & ABS

Industry Participants Have Difficulty Determining Who’s Responsible for Risk Retention from Certain Issuers

The complex financing arrangements used by certain investors and a lack of clarity from federal regulators can make it difficult to determine the entity responsible for meeting risk-retention requirements in some MBS and ABS, according to Charles Sweet, senior counsel at the law firm of Morgan Lewis. The Dodd-Frank Act generally required the sponsor of a security to retain at least 5.0 percent of the risk from the security. Sweet said determining the sponsor of an MBS or ABS can be fairly straightforward when one company originates the assets, services the receivables and initiates securitization, as in the case of an ABS backed by automobile retail contracts from a captive finance company of a car manufacturer. However, where securitization roles are more dispersed, Sweet said...


September 22, 2016 - Inside Mortgage Finance

Some RMBS Originators are Replacing QC Reviews With Feedback from Whole Loan Investors: Moody’s

Some residential mortgage-backed securities loan originators are moving away from performing internal post-acquisition quality control loan reviews in lieu of obtaining feedback from their whole loan investors, according to a new report from Moody’s Investors Service. “Some aggregators are relying more on their investors for quality control feedback,” said Moody’s. The ratings service identified in particular Redwood Residential Acquisition Corp. and JPMorgan Mortgage Acquisition Corp., which it said “are relying more on feedback from whole loan investors to monitor the quality of due diligence firm loan reviews, as opposed to conducting their own internal reviews, since a large portion of their acquisitions are sold in whole-loan trades.” Moody’s noted...


September 19, 2016 - Inside the CFPB

CFPB Provides Guidance to CSBS on its Mortgage Rules

The CFPB recently provided some written guidance on its mortgage rules to the Conference of State Bank Supervisors. The guidance, in the form of a letter, highlights some of the important changes to the mortgage rules that likely apply to many of the small lenders that CSBS members supervise. The letter, a copy of which was obtained by Inside the CFPB, came in response to a meeting this spring between Texas Department of Banking Commissioner and CSBS Chairman Charles Cooper, members of the ...


September 19, 2016 - Inside the CFPB

Hensarling Bill Also Would Make Revisions to CFPB Mortgage Rules

H.R. 5983, the Financial CHOICE (Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs) Act by Rep. Jeb Hensarling, R-TX, chairman of the House Financial Services Committee, has incorporated the provisions of a number of bills that have either already passed the committee or the full House of Representatives and that would affect ...


September 19, 2016 - Inside the CFPB

Lawmakers Pass Multiple Changes To CFPB, With Industry Support

Republicans on the House Financial Services Committee had enough votes, despite one defection, to pass a comprehensive alternative to the Dodd-Frank Act that includes a host of changes to the CFPB. The most significant them would be replacing the single directorship with a five-member bipartisan commission and subjecting the agency to the congressional appropriations process. The legislative vehicle they used was H.R. 5983, the Financial CHOICE (Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs) Act, formally introduced 10 days ago by committee ...


September 19, 2016 - Inside the CFPB

TRID Was ‘A Beast’ at First, Now ‘A Paper Tiger,’ Experts Say

It’s been almost a year now since the CFPB’s integrated disclosure rule went into effect, and industry participants across the credit spectrum appear increasingly comfortable with the new disclosure regime. But when it first came out, the rule took all the oxygen from the room and caused more fear and anxiety that, in retrospect, appears to be have been justified, according to a handful of experts in the non-prime mortgage origination space. Speaking during ...


September 19, 2016 - Inside the CFPB

TRID 1.0 Blamed for Rise in Mortgage Defects, Study finds

The CFPB’s Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure (TRID) rule has been blamed for a lot, including, most recently, producing more defects in mortgage loans. According to a new industry trends report from ACES Risk Management Corp. (ARMCO), a provider of web-based audit technology solutions for the mortgage industry based in Pompano Beach, FL, the industry experienced “a significant decrease in defects” through the second quarter of 2015. However, ...


September 19, 2016 - Inside the CFPB

Life Under TRID: TRID 2.0 Raises Plenty of Issues In Minds of Industry Commenters

Industry trade groups have yet to weigh in on the CFPB’s TRID clarifying rulemaking, but the grassroots rank-and-file have, and many of them are raising more concerns and questions. For instance, Ross Miller, president of Miller Home Mortgage in Metairie, LA, complained that there are no exceptions for the three-day waiting period when there is an emergency. “I had a client whose father was quickly scheduled for open heart surgery,” he said in a comment letter. “The client was ...


September 16, 2016 - Inside MBS & ABS

Oversight Seen as Protecting Investors in Expected MBS From Marketplace Lenders, Rating Implications Unclear

Regulations and practices in the mortgage market will help protect investors in MBS backed by residential mortgages from marketplace lenders, according to Moody’s Investors Service. However, it’s not clear if the protections will be enough to offset the rating penalties often applied to originators and assets that lack historical performance records. Moody’s published its analysis last week, noting that while no residential MBS has been issued by a marketplace lender as yet, the firm expects issuance at some point. Marketplace lenders – the most prominent of which is Social Finance – connect...


September 16, 2016 - Inside MBS & ABS

House Panel Passes Dodd-Frank Reform Alternative That Would Eliminate Risk-Retention Requirements for ABS

Republicans running the House Financial Services Committee had enough votes, in spite of one defection, to push through a legislative markup this week a comprehensive overhaul of the Dodd-Frank Act that would eliminate the pending risk-retention requirements for ABS other than residential mortgages, among other provisions. The GOP’s preferred legislative vehicle is H.R. 5983, the Financial CHOICE (Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs) Act, dropped in the legislative hopper a week ago by Rep. Jeb Hensarling, R-TX, committee chairman. “Many post mortems of the financial crisis posit...


September 15, 2016 - Inside Mortgage Finance

Single Women Borrowers Better at Keeping Up With Mortgage Than Single Males in Recent Years

Although single-women borrowers are more likely to pay their mortgages on time than single-male borrowers, they tend to pay higher mortgage rates and are more often denied credit. Those findings come from a new Urban Institute study that merged Home Mortgage Disclosure Act data for 2004-2014 with CoreLogic data on loan performance. A combination of a male and female borrower (usually in that order) accounted...


September 15, 2016 - Inside Mortgage Finance

HFSC Passes Dodd-Frank Replacement, Bill Would Foster Portfolio Lending, Make Mortgage Changes

The House Financial Services Committee this week marked up, mostly on party lines, a comprehensive alternative to the Dodd-Frank Act that would, among other things, create a legal safe harbor for mortgage loans that are originated by a lender and then held in portfolio on its balance sheet. Democrats unanimously opposed the bill and refused to offer a single amendment, continually railing against Wells Fargo and accusing the Republicans of wanting to take the nation “back to the regulatory Stone Age.” The bill passed...


September 8, 2016 - Inside Mortgage Finance

Title Agents Bash TRID Clarification Proposal, Real Estate Agents Love Getting Access to Docs

Hundreds of industry participants have written to the Consumer Financial Protection Bureau to express their opposition to or support of the bureau’s attempt to resolve some of the ambiguity associated with its Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure Rule. Title insurers say the CFPB missed a chance to fix a major problem: confusion about title premium charges. Real estate agents say the bureau is making things better for consumers by allowing lenders to share disclosures. One title insurance professional noted...


September 5, 2016 - Inside the CFPB

TRID Compliance Issues Disclosed on New Nonprime MBS

The new nonprime mortgage-backed securities deals from Angel Oak Capital Advisors and Deephaven Mortgage contain a number of mortgages reflecting a range of issues in terms of complying with the CFPB’s TILA/RESPA Integrated Disclosure rule (TRID), a review of the offering documents revealed. Part of the compliance issues stem from the ongoing uncertainty about cures for minor errors. While the CFPB issued a proposed rule in July attempting to clarify some of these TRID uncertainties, and the Structured Finance Industry Group has worked with industry participants on a set of guidelines, it is still not clear whether some TRID errors can be cured. The $132.65 million nonprime MBS from Angel Oak included 251 mortgages subject to TRID, representing 59.4 percent ...


September 5, 2016 - Inside the CFPB

Real Estate Agents Report Mixed Experience With TRID 1.0

The TILA-RESPA Integrated Disclosure rule helped improve communications with no impact on closing times, according to some real estate agents. But other agents reported that the new disclosure rule caused significant delays in closing purchase mortgages. The disparity in findings is contained in the newest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey, which asked real estate agents to describe their best/worst experience with lenders this year. TRID, as might be expected, received a number of mentions. An agent in California said lenders have been much better at communication since TRID took effect in October. “I feel that TRID keeps them more aware of the timelines they need to adhere to,” the agent said. And a sales professional in Maryland said homebuyers’ ...


September 5, 2016 - Inside the CFPB

Real Estate Agents Support CFPB Plan to Share Closing Documents

Scores of real estate professionals have written to the CFPB to express their support of the TRID 2.0 provision that would enable the sharing of mortgage origination documents between lenders and real estate professionals. Carol Barkstrom, principal broker/owner at Connections Realty in Richmond, VA, told the CFPB, “Thank God you are proposing to make this change. We as agents being denied access to closing documents has been a huge problem.” Previously, real estate professionals “have always had access to disclosure documents to catch possible mistakes and omissions and to explain the meaning of all the pieces and parts of the closing documents to our selling and buying clients,” she added. However, with the original TRID rule, the bureau’s attempt to ...


September 5, 2016 - Inside the CFPB

Life Under TRID: Title Agents Slam CFPB’s TRID Clarifying Rulemaking

Hundreds of title agents across the U.S. responded in an organized letter-writing campaign and flooded the CFPB’s inbox with negative comments about the bureau’s attempt to clarify a number of issues related to its controversial TILA/RESPA Integrated Disclosure Rule, otherwise known as TRID. One title insurance professional commented that the CFPB missed an opportunity to change the closing disclosure’s calculation of title fees. “Consumers around the country continue to receive inaccurate information at the closing table about their title insurance costs,” she said. “This provision of the rule defeats the bureau’s own mission to provide consumers with a better understanding of their transaction.” The title agent urged the CFPB to fix this problem immediately so consumers will have a clear ...


August 26, 2016 - Inside MBS & ABS

Pressure for GSEs to Expand Role in Manufactured Housing Grows, Freddie Forms MH Task Force

Manufactured housing advocates are pushing for more government-sponsored enterprise support for manufactured lending, especially for chattel loans that are not considered mortgages because the loan is not secured by a dwelling and land. The issue has gathered steam as the Federal Housing Finance Agency works to finalize a “duty-to-serve” regulation for Fannie Mae and Freddie Mac that focuses on mortgage financing for very low-, low- and moderate-income families in rural areas and manufactured housing. Back in May, the Manufactured Housing Institute and representatives from both GSEs had discussed...


August 22, 2016 - Inside the CFPB

Does TRID Definition of Application Trigger HMDA Reporting? Maybe

One mortgage lender recently inquired of Michael Goldhirsh, director of legal and regulatory compliance for the Lenders Compliance Group, as to whether the definition of “application” in the CFPB’s TILA/RESPA Integrated Disclosure rule (TRID) triggers or otherwise affects reporting under the Home Mortgage Disclosure Act. In a recent blog posting, he replied: “The short answer is that receipt of some or all of the six pieces of TRID application information does not necessarily trigger an application for purposes of HMDA reporting.” Goldhirsh went on to explain that Regulation C defines an application for HMDA reporting purposes as an oral or written request for a home purchase loan, a home improvement loan, or a refinancing that is made in accordance with ...


August 22, 2016 - Inside the CFPB

Most Small Lenders Felt Rushed by CFPB’s SBREFA Process, GAO Finds

Most of the small-entity participants in the review processes run by the CFPB before it came out with four major mortgage rules felt they were hurried by the process and unsatisfied with the final results, the Government Accountability Office said in a recent report. The GAO took a look at the experience of the 69 Small Business Regulatory Enforcement Fairness Act (SBREFA) panel participants involved in evaluating the likely effects of the CFPB’s TILA/RESPA Integrated Disclosure rule (TRID), the mortgage servicing regulation, its loan originator compensation rule, and the Home Mortgage Disclosure Act regulation. Of the 57 small-entity representatives GAO interviewed, “two-thirds stated not enough time was allotted to discuss at least one of the topics on the panel agenda ...


August 22, 2016 - Inside the CFPB

Life Under TRID: Delays Ease, Costs Rise, Smaller Loans Less Desirable

The CFPB’s TILA/RESPA Integrated Disclosure Rule continues to have mixed results, at least from the perspective of the nation’s mortgage originator community. According to the recently released results of a survey by the National Association of Realtors of mortgage originators during the second quarter of 2016, delays attributed to TRID eased between the first and second quarters of the year, as did lenders’ reluctance to offer pre-approval letters, while cancellations ticked up. Originators were asked, since April 1, what share of their company’s mortgage transactions had been delayed or cancelled due to a TRID-related issue versus non-TRID issues. Mortgages delayed due to TRID ticked barely down, from 1.8 percent in 1Q16 to 1.7 percent in 2Q16. In the fourth quarter ...


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After the November elections, how long will it take for a new Congress and White House to pass GSE reform legislation?

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2 to 3 years. GSE reform is complicated.
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