Browse articles from all of our Newsletters related to Legislation.

October 27, 2016 - Inside Mortgage Finance

Fannie, Freddie Endorse Aspects of TRID That Foster Support of Their Uniform Closing Dataset

Fannie Mae and Freddie Mac sent the Consumer Financial Protection Bureau a joint comment letter addressing the bureau’s TRID clarifying rulemaking that have to do with the government-sponsored enterprises’ Uniform Closing Dataset, supporting some provisions and opposing others. The UCD is the data standard the pair developed to support accurate disclosures on the closing disclosure and to facilitate the sharing of that information. “The GSEs believe...

October 27, 2016 - Inside Mortgage Finance

Appraiser Shortage Continues to Delay Loan Closings In Market With Strong Purchase-Mortgage Demand

The share of home sales that experienced a delayed closing because of appraisal-related issues remained elevated in September, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. Industry participants suggest that the strong market for purchase mortgages has led to a backlog of appraisals. Appraisal issues accounted...

October 27, 2016 - Inside Mortgage Finance

Cordray Details TRID Exams

Consumer Financial Protection Bureau Director Richard Cordray said agency examiners are conducting “transaction testing” to assess compliance with new TRID disclosure rules. Looking at loan files is necessary to a diagnostic compliance assessment, he told a good-sized audience at this week’s annual convention of the Mortgage Bankers Association. The bureau chief repeated earlier assertions that TRID compliance reviews would be “diagnostic and corrective, not punitive.” Cordray said...

October 21, 2016 - Inside FHA/VA Lending

HUD Urges IG to Reconsider Cost of Delayed Conveyance, Foreclosure

The Department of Housing and Urban Development called on its inspector general to reassess estimated financial losses to the FHA insurance fund, which an IG audit attributed to lengthy delays of servicer foreclosures and property conveyances. A recent audit report by the HUD inspector general alleges that HUD paid approximately $2.23 billion in claims for an estimated 239,000 properties that missed foreclosure and conveyance deadlines. According to the IG report, HUD paid an estimated $141.9 million for servicers’ claims for “unreasonable and unnecessary” debenture interest on the distressed loans, as well as $2.09 billion in servicer claims for holding the properties past their foreclosure and conveyance deadlines. While it was necessary for servicers to pay for property-preservation costs, HUD should not have paid for holding costs, the ...

October 21, 2016 - Inside Nonconforming Markets

Jumbo Share Nudged Slightly Higher in 2015

Jumbo mortgages accounted for 18.3 percent of total first-lien originations in 2015, according to a new Inside Mortgage Finance analysis of Home Mortgage Disclosure Act data recently released by federal regulators. That was virtually unchanged from the 18.1 percent share that jumbo loans held in the 2014 HMDA data. The analyses match conventional loan amounts and county information about the secured property to Fannie Mae/Freddie Mac conforming loan limits, including adjustments for high-cost markets, in effect at the time. Purchase mortgages accounted...[Includes two data tables]

October 21, 2016 - Inside MBS & ABS

Industry Groups Urge CFPB to Adopt More Cure Provisions to Boost Secondary Market Activity

Mortgage industry representatives are calling upon the Consumer Financial Protection Bureau to do more to facilitate the correction of errors made under the enhanced disclosure regime of the agency’s integrated disclosure rule, to reduce or eliminate disruptions in the secondary market as well as boost access to credit. The pleas were made in conjunction with the industry’s broader response to the CFPB’s proposed clarifying rulemaking related to its so-called TRID rule, issued under the authority of the Truth in Lending Act and the Real Estate Settlement Procedures Act. In a comment letter sent this week to the bureau, the Consumer Mortgage Coalition urged...

October 20, 2016 - Inside Mortgage Finance

PHH Ruling Expected to Slow CFPB’s Enforcement Roll, But Just How Much is a Matter of Debate

Last week’s closely-watched appeals court ruling in the wrangling between PHH Mortgage and the Consumer Financial Protection Bureau over Section 8 of the Real Estate Settlement Procedures Act is being widely viewed by many as a clipping of the agency’s wings. But expectations about just how restrained the CFPB will be in enforcement actions going forward vary from compliance attorney to compliance attorney. Lawyers with the Stinson Leonard Street law firm pointed out that the director still holds all of the same enforcement power as before, despite the court’s conclusion that the bureau’s leadership structure, with a sole, independent director who can only be removed for cause, is unconstitutional. “For example, the CFPB administrative appeals process is...

October 20, 2016 - Inside Mortgage Finance

Industry Groups Urge CFPB to Extend the Diagnostic Approach to TRID Enforcement

A number of mortgage trade groups this week called upon the Consumer Financial Protection Bureau to extend its current “diagnostic” approach to enforcing the agency’s Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure (TRID) rule. The groups were responding to the CFPB’s request for public comments on its proposed TRID clarifying rulemaking, which was issued at the end of July. It’s...

October 20, 2016 - Inside Mortgage Finance

Mortgage M&A Market Mostly Subdued; Flagstar in the Hunt for Retail Franchises

According to investment bankers, there continues to be plenty of talk about mergers and acquisitions in the mortgage industry, but deals just aren’t getting done for the simple reason that the primary targets – midsized nonbanks – are posting strong profits and want top dollar for their franchises. “We’re still having conversations with potential buyers,” said Chuck Klein, managing partner with Mortgage Banking Solutions, Austin, TX. “But there continues to be a wide gap between the bid and the asking price.” Klein also noted...

October 17, 2016 - Inside the CFPB

TRID News in Brief

Comments on TRID 2.0 Are Due Tuesday. Representatives of the mortgage industry have until 11:59 p.m. ET Tuesday, Oct. 18, 2016, to submit their comments to the CFPB regarding its TRID 2.0 clarifying proposed rule.... CFPB Issues Revised TRID Guide to CD, LE Forms. The CFPB recently published an updated guide to the TRID loan estimate and closing disclosure forms, which was last revised in July 2015.... Bureau Releases Updated TRID Compliance Guide for Small Entities. Earlier this month, the CFPB put out a revised small entity compliance guide for the TILA/RESPA Integrated Disclosure rule, which was last updated in July 2015....

October 17, 2016 - Inside the CFPB

Supporters, Opponents of Dodd-Frank Put Out Dueling Claims

The White House Council of Economic Advisers put out a report recently downplaying the negative effects that the Dodd-Frank Act has had on community banks. “Economic evidence finds that community banks remain strong across a range of measures, from lending growth to geographic reach, including their performance since financial reform passed in 2010,” the report stated. The Obama administration report also asserts that access to community banks remains robust and their services have continued to grow in the years since Dodd-Frank has taken effect, “though this trend has not been uniform across community banks, with mid-sized and larger community banks seeing stronger growth than the smallest ones,” it conceded. “At the same time, though, many community banks – especially the smallest ...

October 17, 2016 - Inside the CFPB

Lenders Are Adapting to TRID Regime, But at a Big Cost

Now that mortgage lenders have had a year to digest the CFPB’s controversial TILA/RESPA Integrated Disclosure Rule, smaller financial institutions have learned to cope to a certain degree, but there are still challenges and costs. That’s the perspective of Ron Haynie, senior vice president of mortgage finance policy and executive vice president of mortgage services for the Independent Community Bankers of America. “I guess the good news is the market didn’t seize up and mortgage closings didn’t come to a screeching halt or average turn times didn’t get out to 60 days plus,” he told Inside the CFPB recently. “While things slowed down in the beginning, average turn times seemed to have settled around 46 days. And while that’s still ...

October 17, 2016 - Inside the CFPB

Impact of TRID on Industry Won’t Be Known for Years, Attorney Says

One year into the TRID rule, the mortgage industry has gotten used to the new disclosure landscape. But until consistent legal precedents are established by the courts, true certainty will be elusive, and that likely means years will have to transpire before the rule’s full impact will be known. “I think the industry as a whole has met the challenge and settled into the TRID process, which everyone knows was radically different than what it replaced,” said Donald Lampe, a partner in the financial services group in the Washington, DC, office of the Morrison & Foerster law firm. “And so I see the industry settling in to the use of these new forms and the changes that these disclosures imposed ...

October 17, 2016 - Inside the CFPB

Former TRID Architect Shares His Perspective on Rule’s Anniversary

Earlier this month, the CFPB’s controversial TILA/RESPA Integrated Disclosure rule – TRID – turned one year old. In an email exchange with Inside the CFPB, former bureau official and TRID architect Richard Horn, who now heads his own law firm in Washington, DC, addressed the progress the industry has made in adopting the rule, and the challenges that remain. Horn began by saying he thinks the industry has generally done a great job with the extremely difficult task of implementing TRID. Also, “I am very pleased that some of the recent industry surveys of consumers after TRID have shown that consumers are experiencing the intended benefits,” he said. “There are challenges still, but it’s a good sign that the CFPB issued the ...

October 17, 2016 - Inside the CFPB

Life Under TRID: As TRID 2.0 Deadline Approaches, Support Emerges From Industry

With the public comment period about to close on the CFPB’s TRID clarifying proposed rule, a few industry voices of support have emerged among the comment letters submitted so far by rank-and-file industry representatives. For instance, Debbie Ingle, executive director of mortgage and real estate lending for Alaska USA Federal Credit Union, commended the bureau for issuing the proposed amendments to clarify the federal mortgage disclosure requirements under the Truth in Lending Act and the Real Estate Settlement Procedures Act. “The proposed amendments are beneficial and will provide mortgage lenders with clarification and improved guidance,” said Ingle. “The amendments serve as a good first step to help mortgage lenders resolve the complex implications of the TILA/RESPA Integrated Disclosure Rule (TRID) ...

October 17, 2016 - Inside the CFPB

PHH Wins Big Showdown With CFPB, Agency Likely to Appeal

PHH Mortgage – and the rest of the mortgage industry, for that matter – came out with a clear and decisive win against the CFPB last week when the U.S. Court of Appeals for the District of Columbia Circuit vacated the $109 million disgorgement order imposed on the lender by the director of the bureau, Richard Cordray. PHH argued that the CFPB incorrectly interpreted RESPA Section 8 to bar so-called captive reinsurance arrangements involving mortgage lenders such as PHH, their affiliated reinsurers and private mortgage insurers. The lender also asserted that, in any event, the CFPB departed from the consistent prior interpretations issued by the Department of Housing and Urban Development, and that the bureau then retroactively applied its new interpretation of ...

October 17, 2016 - Inside the CFPB

Court Declares CFPB Leadership Structure Unconstitutional

Last week, the U.S. Court of Appeals for the District of Columbia Circuit brought the powerful CFPB down to earth in its legal wrangling with PHH Mortgage, ruling that two aspects of the bureau’s structure – the dismissal of the director of the agency only for cause, and the single directorship as opposed to a multi-member bipartisan commission – were unconstitutional. “As an independent agency with just a single director, the CFPB represents a sharp break from historical practice, lacks the critical internal check on arbitrary decision-making, and poses a far greater threat to individual liberty than does a multi-member independent agency,” wrote Circuit Judge Brett Kavanaugh on behalf of the court. “All of that raises grave constitutional doubts about the CFPB’s ...

October 17, 2016 - Inside the CFPB

PHH Ruling Seen as a Big Threat To CFPB Enforcement Actions

The CFPB took a whipping last week in the long-awaited court ruling in its dispute with PHH Mortgage – so much so, in fact, that not only are its future enforcement actions likely to be curtailed, but even past actions might be challenged by the affected industry participants. “The ramifications of this case go far beyond restricting the CFPB’s reach, clarifying the interpretation of the Real Estate Settlement Procedures Act, and resolving the question of how statutes of limitation apply to the CFPB’s enforcement actions,” said Craig Nazzaro, of counsel with the Baker Donelson law firm in Atlanta, in a review of the case. As he sees it, this case makes clear that the bureau has exceeded its bounds and that ...

October 14, 2016 - Inside Mortgage Trends

A Good News/Bad News October for PHH

PHH Corp. this week scored a key legal victory in its battle with the Consumer Financial Protection Bureau over captive reinsurance and the Real Estate Settlement Procedures Act. But despite this good news, there are still clouds over the nonbank. The “worst” of the recent spate of bad news for the company surrounds the early October disclosure that Merrill Lynch is breaking all ties to PHH when it comes to private-label originations and servicing. The effective date for the end of the contract is...

October 14, 2016 - Inside MBS & ABS

Next Non-Agency MBS ‘Green Paper’ From SFIG Will Focus on Reps and Warrants

The Structured Finance Industry Group is preparing to publish standards that aim to increase transparency for representations and warranties on new non-agency MBS, according to officials at the trade group. Eric Kaplan, a managing partner at Ranieri Strategies, said SFIG will release one or two “green papers” this year as part of the group’s RMBS 3.0 effort to revive issuance of non-agency MBS. Kaplan detailed the plans along with Daniel Goodwin, director of mortgage policy at SFIG, at the recent ABS East conference produced by Information Management Network. SFIG has released...

October 13, 2016 - Inside Mortgage Finance

Traditional Interpretation of RESPA Sec. 8 Gets a Boost as Court Sides With PHH in CFPB Dispute

The traditional interpretation of Section 8 of the Real Estate Settlement Procedures Act that the mortgage industry has relied on for decades was vindicated this week when a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit sided with most of the arguments advanced by PHH Mortgage in its dispute with the Consumer Financial Protection Bureau. The crux of the dispute has been the bureau’s assertion that PHH violated RESPA by steering business to private mortgage insurers that purchased reinsurance from a captive insurer owned by PHH. Most large lenders and all private MIs engaged in these arrangements prior to the housing market collapse. Early on in the case, an administrative judge agreed...

October 7, 2016 - Inside Nonconforming Markets

Sales of Higher-Priced Mortgages Declined in 2015

Some $41.77 billion in higher-priced mortgages were sold in 2015, down 19.9 percent from 2014, according to an Inside Nonconforming Markets analysis of recently released data under the Home Mortgage Disclosure Act. Their share of total loan sales also decreased in 2015 to 3.3 percent. Higher-priced mortgages are sometimes seen as a proxy for nonprime mortgages. First-lien higher-priced mortgages are defined as loans with an ... [Includes one data chart]

October 6, 2016 - Inside Mortgage Finance

HMDA Report Shows Huge Jump in Refi Business in 2015, Growing Government Role in Purchase Market

Home Mortgage Disclosure Act data released last week show a somewhat more efficient mortgage market in 2015 as fewer loan applications were declined and more turned into originated loans. Lenders processed $2.576 trillion in mortgage applications filed in 2015, converting them into $1.651 trillion in purchase and refinance originations, a 32.9 percent increase from the previous year. Some 56.5 percent of loan apps turned into closed loans, up from 53.8 percent in 2014, and the overall denial rate fell 2.9 points to 20.1 percent. Most of last year’s origination surge came...[Includes one data table]

October 6, 2016 - Inside Mortgage Finance

Modifying TRID to Facilitate Additional Cure Provisions Could Require Congressional Action

Many participants in the mortgage industry remain concerned that the Consumer Financial Protection Bureau did not address additional cure provisions in its proposed rulemaking to clarify the integrated consumer disclosure known as TRID. Lenders would love to see the bureau respond to these concerns when it finalizes its so-called TRID 2.0 rule. But that might not happen without Congress getting involved. During a webinar last week sponsored by Inside Mortgage Finance, some attendees inquired...

October 6, 2016 - Inside Mortgage Finance

With TRID’s First Year in the Rear View Mirror, Industry Hopeful Compliance Continues to Improve

The Consumer Financial Protection Bureau’s integrated disclosure rule has now been in effect for a full year, and industry officials hope the potholes and speedbumps in the TRID road will continue to smooth out. Former CFPB official Benjamin Olson, now a partner with the BuckleySandler law firm in Washington, DC, noted that the first year of the TRID rule has been eventful. “In its early stages, the TRID rule proved to be far more disruptive than many envisioned, largely because of extraordinarily high rates of real and perceived errors and pervasive uncertainty over the liability associated with those errors,” he told Inside Mortgage Finance. Over time, the mortgage industry has been...

October 3, 2016 - Inside the CFPB

Other News in Brief

SFIG Meets With CFPB Officials to Discuss TRID. Staff and key members of the Structured Finance Industry Group, a securitization trade group, recently met with regulators at the CFPB to discuss the bureau’s integrated disclosure rule known in as TRID and reviewed the trade group’s RMBS (residential mortgage-backed securities) 3.0 TRID Compliance Review Scope document.... CFPB Releases Updated Exam Procedures for the Military Lending Act. Late last week, the bureau issued the revised procedures its examiners will use in identifying consumer harm and risks related to the Military Lending Act rule, which was updated in July 2015...

October 3, 2016 - Inside the CFPB

Credit Union Mortgage Originations ‘Thriving’ Under CFPB Regime

CFPB Director Richard Cordray appeared before credit union representatives recently and touted the performance of their industry’s mortgage operations under the bureau’s mortgage rules. “Our first set of mortgage rules have been in place for over two and a half years, and we are seeing great progress,” Cordray told the National Association of Federal Credit Unions. “In 2014, the first year of our ability-to-repay rule on mortgage origination, owner-occupied home purchase mortgages increased by 4 percent, according to HMDA data, and growth was even stronger last year: home purchase mortgages increased by an estimated 13 percent to 14 percent.” In fact, as it turns out, the mortgage industry overall actually did slightly better than Cordray said. According to analysis of ...

October 3, 2016 - Inside the CFPB

Dodd-Frank Mortgage Rules Benefitted Wealthy, Professors Say

Two academics assert in a new white paper that the Dodd-Frank Act mortgage rules promulgated by the CFPB that were designed to protect consumers actually harmed middle-class borrowers and benefitted the wealthy. “Dodd-Frank aimed at reducing mortgage fees and abuses against vulnerable borrowers, but increased the costs of originating mortgages,” said University of Maryland professors Francesco D’Acunto and Alberto Rossi in their new paper. “We find it triggered a substantial redistribution of credit from middle-class households to wealthy households.” A back-of-the-envelope calculation that keeps constant the mortgage demand characteristics of 2010 shows financial institutions reduced their production of medium-sized loans by 15 percent in 2014, and increased making large loans by 21 percent, they said. D’Acunto and Rossi also found ...

October 3, 2016 - Inside the CFPB

Bureau Approves Collection of HMDA Ethnicity, Race Data in 2017

The CFPB has formally authorized the collection of expanded Home Mortgage Disclosure Act information on race and ethnicity, as per the Equal Credit Opportunity Act and Regulation B, in 2017. “At any time from Jan. 1, 2017, through Dec. 31, 2017, a creditor may, at its option, permit applicants to self-identify using disaggregated ethnic and racial categories as instructed in appendix B to Regulation C, as amended by the 2015 HMDA final rule,” the bureau said in a Sept. 29, 2016, notice in the Federal Register. During this period, a lender permitting applicants to self-identify using these categories shall not be deemed to violate Regulation B Section 1002.5(b). Further, the lender shall also be deemed to be in compliance with ...

October 3, 2016 - Inside the CFPB

TRID Compliance Reviews Now Underway at CFPB, Other Agencies

Official regulatory reviews for compliance with the CFPB’s TILA/RESPA Integrated Disclosure Rule are now underway at the bureau and among the prudential regulators, according to top industry attorneys. Speaking during a webinar last week sponsored by Inside Mortgage Finance, former CFPB official Benjamin Olson, now a partner with the BuckleySandler law firm in Washington, DC, stated, “We can confirm that, yes, the CFPB and the other regulators, as part of their mortgage origination exams, are including TRID modules and looking at TRID compliance.” He reminded the audience that the bureau has been emphatic that these will be diagnostic reviews. “I haven’t seen anything inconsistent with that with respect to the reviews of our clients out of the CFPB,” Olson said...

October 3, 2016 - Inside the CFPB

TRID Confusing or Alienating Borrowers, ALTA Survey Finds

With the one-year anniversary of the CFPB’s TRID rule now upon us, a new survey from the American Land Title Association finds that a vast swath of the homebuying population is either confused or feels taken advantage of by the calculation of title insurance fees on the new mortgage disclosures. Among the survey’s chief findings, 40 percent of consumers are confused by the new closing disclosure calculation of title insurance. “Under TRID, consumers are disclosed a price for their two title insurance policies that is different than the actual price they will pay at closing,” ALTA said. Also, homeowners want a detailed breakdown of all the costs for a service, the survey found. “At the closing table, homebuyers expect the ...

October 3, 2016 - Inside the CFPB

Are ALTA and Its Members Going to ‘Break the Internet’ Over TRID 2.0?

One of the fascinating things about sifting through all of the 1,200+ industry comments on the CFPB’s TRID clarifying proposed rulemaking as they are posted on the regulations.gov website is to notice the success the American Land Title Association and its membership are having in flooding the agency’s inbox with their concerns. The overwhelming majority of individual comment letters submitted to the CFPB to date all start with the same introductory language, including the reproduction of a typo, as follows: “I am [sic] title insurance professional and I am contacting you today about the proposed rulemaking on TRID. As a settlement agent, it’s important that I am not penalized for compliance errors made by a lender.” This suggests that commenters ...

October 3, 2016 - Inside the CFPB

Life Under TRID: TRID 2.0 Continues to Raise a Host of Questions and Concerns

Rank-and-file mortgage lending industry participants continue to submit to the CFPB a range of problems and issues they are encountering with the bureau’s Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure Rule, commonly known as TRID, and its clarifying rulemaking. One credit union official wrote that members (and borrowers served by community banks) are being coached by loan officers to “be patient and trust” that their final fees will be lower than what is shown on the loan estimate (LE). And the larger issue is that consumers are becoming less engaged in understanding their finances due to the complexities of the rule, she said. “Somehow, in trying to make lending conditions better for the consumer, something far worse ...

September 30, 2016 - Inside Mortgage Trends

TRID Complexity Limits Tech’s Compliance Role

The inherent complexity and ambiguity of many of the provisions of the Consumer Financial Protection Bureau’s integrated disclosure rule are stymying the ability of technology to aid in lender compliance, top industry experts said this week. Speaking during a webinar sponsored earlier this week by Inside Mortgage Finance, former CFPB official Benjamin Olson, now a partner with the BuckleySandler law firm in Washington, DC, detailed the obstacles that lenders are confronted with ...

September 30, 2016 - Inside Mortgage Trends

Fresh HMDA Data Show Surge in Refi And Government Purchase Loans in 2015

A strong tide of refinance activity lifted mortgage origination volume in 2015, according to a new Inside Mortgage Trends analysis of Home Mortgage Disclosure Act data released late this week by federal regulators. Aggregate national data released by the Federal Financial Institutions Examination Council show a total of $1.651 trillion in first-lien mortgage originations for home purchase and refinance. That was up 32.9 percent from 2014 but failed to ... [Includes one data chart]

September 30, 2016 - Inside MBS & ABS

A Year After TRID, the ‘Scratch & Dent’ Market For Such Loans Isn’t Going Away. But It is Slowing

The scratch-and-dent market for residential loans that have TRID-related errors is still alive and (mostly) well, even though originators have had almost a year to adjust to the new disclosure regime introduced by the Consumer Financial Protection Bureau. “This market will never be exhausted,” said Jeff Bode, chairman and CEO of Mid America Mortgage, Addison, TX, one of the most active buyers of mortgages that have errors related to consumer disclosures tied to the Truth in Lending Act and the Real Estate Settlement Procedures Act. Of course, it’s...

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...


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

I’m confident a bill will be passed the first year.


2 to 3 years. GSE reform is complicated.


Sadly it won’t happen in a Clinton or Trump first term.


Not in my lifetime.


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