Browse articles from all of our Newsletters related to Legislation.

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 ...

August 12, 2016 - Inside Nonconforming Markets

CFPB’s TRID Proposed Rule Prompts Optimism

The proposed rule from the Consumer Financial Protection Bureau addressing the TILA-RESPA Integrated Disclosure rule will likely help the non-agency market, according to industry participants. However, there’s also some frustration that the CFPB didn’t do as much as it could have to address cures and assignee liability. Industry attorneys note that if enough comments are submitted on the issues, the CFPB might make further changes to TRID. The changes proposed by the CFPB ...

August 11, 2016 - Inside Mortgage Finance

FHFA Stress Test of Hypothetical Crisis Shows Fannie And Freddie Could Need as Much as a $125B Bailout

In the event of a severe economic crisis, Fannie Mae and Freddie Mac could need a bailout of up to $125.8 billion, according to a Federal Housing Finance Agency stress test released this week. The test of severely adverse scenarios, required by the Dodd-Frank Act for companies with total consolidated assets of more than $10 billion, took place in March and is based on Fannie and Freddie portfolios as of Dec. 31, 2015. The bailout would be needed on an incremental basis and would also depend on the treatment of the government-sponsored enterprises’ deferred tax assets. Under this hypothetical economic scenario, situations include...

August 8, 2016 - Inside the CFPB

Other News in Brief

Mortgage Industry Waits for PHH Shoe to Drop. The mortgage industry is awaiting a final ruling from the U.S. Court of Appeals for the District of Columbia Circuit in the case of PHH Corp. v. Consumer Financial Protection Bureau, No. 15-cv-01177.

August 8, 2016 - Inside the CFPB

TRID 2.0 Would Apply Disclosure Requirements to Cooperative Units

The CFPB’s proposed changes to its TILA/RESPA Integrated Disclosure rule also would eliminate a degree of uncertainty by applying the rule’s existing disclosure requirements to cooperative units. Under the current rule, coverage of cooperative units depends on whether cooperatives are classified as real property under state law. Because state law sometimes treats cooperatives differently for different purposes, there may be uncertainty and inconsistency among market actors. As a result, the CFPB is proposing to require the provision of the integrated disclosures in transactions involving cooperative units, whether or not such units are classified under state law as real property. This would apply to closed-end credit transactions, other than reverse mortgages. “In at least some states, ownership of a share in ...

August 8, 2016 - Inside the CFPB

TRID 2.0 to Expand Exemption That Aids Housing Finance Agencies

Another noteworthy part of the CFPB’s TRID 2.0 proposal would extend the applicability of a partial exemption that mainly affects housing finance agencies (HFAs) and nonprofits. The existing rule provides a partial exemption for certain non-interest bearing subordinate-lien transactions that provide downpayment and other homeowner assistance (housing assistance loans). The CFPB said it has learned that the exemption may not be operating as intended. “The bureau has received information that many HFAs are having difficulty finding lenders to partner with in making these loans,” the proposed rule stated. Following the introduction of the TILA/RESPA integrated disclosures, some vendors and loan originator systems no longer support the Real Estate Settlement Procedures Act disclosures. “Although the RESPA disclosures are still required for ...

August 8, 2016 - Inside the CFPB

TRID 2.0 to Create Tolerances For The Total of Payments

One proposed rule change to the TRID could help the secondary mortgage market; that is, the creation of tolerances for the total of payments. As the proposal noted, the Truth in Lending Act establishes certain tolerances for accuracy in calculating the finance charge and disclosures affected by the finance charge. However, “In light of changes to certain underlying regulatory definitions, the bureau believes it would be helpful to establish tolerances for the total of payments to parallel the existing provisions regarding the finance charge,” the CFPB said. Under the proposed rule, the same tolerances that now apply for the finance charge would also apply to the total of payments. The bureau said it is concerned that, absent the explicit application ...

August 8, 2016 - Inside the CFPB

TRID 2.0 Proposal Addresses Lingering ‘Black Hole’ Issue

The biggest win for mortgage lenders in the CFPB’s proposal to clarify certain aspects of its integrated disclosure rule is the apparent closing of what’s known as the TRID’s “black hole.” The black-hole problem stems from the fact that, currently, the integrated disclosure rule requires that the creditor deliver or place in the mail the loan estimate no later than the third “general” business day after receipt of the consumer’s application, and the borrower must receive the final revised LE no later than four business days prior to consummation. Once the closing disclosure has been issued, the LE can no longer be provided. If there is a valid change of circumstance that delays closing and results in a fee change,...

August 8, 2016 - Inside the CFPB

TRID 2.0 Provides Guidance on Sharing Disclosures With Others

Perhaps the most significant change in the proposed rule the CFPB issued late last month to clarify its TRID rule is guidance on sharing disclosures with various parties involved in the mortgage origination process in light of privacy concerns. “The bureau has been asked repeatedly by creditors, settlement agents, and real estate agents about the sharing of the closing disclosure with third parties involved in the mortgage transaction,” the proposal stated. “These inquiries have largely concerned which third parties may receive a copy of the CD but have also concerned whether a combined CD form must be provided to the consumer and seller or whether separate CD forms may be provided to the consumer and the seller.” The CFPB provided ...

August 8, 2016 - Inside the CFPB

Life Under TRID: TRID 2.0 Proposed Rule Omits Any Additional Cure Provisions

The CFPB is not offering additional cure provisions in its proposed rule to update and clarify certain aspects of its Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure rule, otherwise known as TRID. TRID “2.0” was released late last month, fulfilling the bureau’s promise to issue the proposal by the end of July. As widely anticipated, the proposed amendments also essentially codify the bureau’s informal guidance on various issues and include clarifications and technical amendments. (See additional stories on pages 3-6.) “The intent of this proposal is to integrate some of the bureau’s existing informal guidance, whether provided through webinar, compliance guide or otherwise, into the regulation text and commentary of Regulation Z where appropriate,” the agency said....

August 5, 2016 - Inside MBS & ABS

With No Extra Cure Provisions, Industry Reps Split On Effect TRID 2.0 Will Have on Secondary Market

The Consumer Financial Protection Bureau last week released its proposed rule to clarify a number of issues related to its integrated disclosure rule known as TRID – and perhaps the single most significant aspect of the proposal for mortgage investors is what it does not include: any additional provisions to cure loan errors. Some observers believe that could be a negative for the secondary market. On the other hand, the bureau did provide...

August 4, 2016 - Inside Mortgage Finance

Are Megabanks the Winners as Jumbo Conduits Close And CFPB Punts on New TRID ‘Cure’ Language?

Nonbank jumbo originators may soon find themselves at a pricing disadvantage to depositories thanks to recent events beyond their control: two jumbo conduits calling it quits and updated regulatory language that offers no comfort when it comes to curing “TRID” errors. Industry veteran Bill Dallas, who runs nonbank lender Skyline Home Loans, Calabasas, CA, put it bluntly, saying: “Banks appear to be the big jumbo winners – Union Bank and others.” He said jumbo production is a low-margin business but a necessity in California. The CEO noted...

August 4, 2016 - Inside Mortgage Finance

TRID 2.0 Contains No Additional Cure Provisions, Gives Guidance on Sharing Disclosures, Other Issues

The Consumer Financial Protection Bureau is not proposing any additional cure provisions in its proposed rule to update and clarify certain aspects of its Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure rule, known as TRID. The TRID 2.0 proposed rule was released late last week. Former CFPB official Quyen Truong, now a partner in the Washington, DC, office of the Stroock & Stroock & Lavan LLP law firm, told...

July 29, 2016 - Inside MBS & ABS

Commercial Mortgage Securitization Slumped in 2Q16 as Non-Agency Issuance Hits Four-Year Low

New issuance of non-agency commercial MBS fell dramatically during the second quarter of 2016, more than offsetting a modest uptick in the production of agency multifamily MBS, according to a new Inside MBS & ABS analysis. Non-agency CMBS issuance fell to just $12.87 billion in the second quarter, a 29.5 percent drop from the first three months of the year. It was the lowest quarterly output of new CMBS since the second quarter of 2012, when just $10.63 billion of new securities were issued and the market was still finding its legs after the financial meltdown. New CMBS issuance has been...[Includes one data table]

July 28, 2016 - Inside Mortgage Finance

Democratic Platform Would Expand Foreclosure Prevention, Increase Access to Affordable Housing

The Democratic Party wants to expand programs to prevent foreclosure, increase access to affordable housing and preserve the 30-year fixed-rate mortgage, according to its recently released 2016 platform. “Whereas the Republican Presidential nominee rooted for the housing crisis, Democrats will continue to fight for those families who suffered the loss of their homes,” the document says. “We will help those who are working toward a path of financial stability and will put sustainable homeownership into the reach of more families.” Democrats want...

July 28, 2016 - Inside Mortgage Finance

Small Banks Remain Just as Active Under CFPB’s Servicing Rules, GAO Finds

Small community lenders such as banks and credit unions not only have remained active in the mortgage servicing space under the Consumer Financial Protection Bureau’s mortgage-servicing rules, their market share of 13 percent in 2015 was double what it was in 2008 after the financial crisis, according to a new report from the Government Accountability Office. The largest community banks and credit unions accounted for most of the growth in the share of servicing by community banks and credit unions, the report said. Many of the representatives from 16 community lenders that GAO interviewed said...

July 28, 2016 - Inside Mortgage Finance

Time Running Out for July Release of TRID 2.0, Industry Hopes Clarifications Solve Some Problems

As of press time, it’s not clear whether the Consumer Financial Protection Bureau will release its proposed rule clarifying certain aspects of its Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure Rule – TRID – before the end of July, the agency’s original timeframe. Joe Ventrone, vice president and deputy chief for regulatory affairs at the National Association of Realtors, said his organization is now looking at an August release and does not anticipate major changes. “However, the CFPB will put in writing all previous informal guidance [it has] given heretofore,” he said. “I think all the guidance will be important if it gives lenders and vendors comfort against enforcement reprisals.” NAR is...

July 22, 2016 - Inside MBS & ABS

Republican Platform 2016 Talks of Reduced Government Role, Ending Mandates

The Republican platform, released this week during the Republican National Convention, would scale back the government’s role in housing and make borrowers and lenders more responsible. But it offered a somewhat vague prescription for what to do with Fannie Mae and Freddie Mac. “Our goal is to advance responsible homeownership while guarding against the abuses that led to the housing collapse,” the platform states. The GOP said housing reform should include clear underwriting standards and guidelines on predatory and acceptable lending practices – standards that are arguably at the core of the Dodd-Frank Act that’s roundly criticized by the party. Republicans blamed...

July 21, 2016 - Inside Mortgage Finance

Small Banks and Nonbanks Applaud H.R. 5907, Seek Relief from Increased Regulatory Oversight

Smaller banks and nonbanks are rallying behind legislation recently introduced to relieve community mortgage lenders from some of the scrutiny placed on larger banks. Rep. Roger Williams, R-TX, authored H.R. 5907, the Community Mortgage Lenders Regulatory Act of 2016, and emphasized that community mortgage lenders engaged in traditional mortgage lending were not responsible for the recent mortgage crisis. Scott Olson, director of the Community Home Lenders Association, told...

July 21, 2016 - Inside Mortgage Finance

With CFPB Mortgage Servicing Amendments Expected Shortly, Industry Braces for Compliance

The Consumer Financial Protection Bureau any day now could release its long-awaited regulation finalizing its proposed amendments to its 2013 mortgage servicing rules, posing yet another compliance challenge and requiring one more round of systems upgrades from the industry as a result. According to a consensus of industry experts, the two biggest subject areas have to do with bankruptcy proceedings and successors in interest. “On the eve of the servicing rules taking effect, the bureau made...

July 15, 2016 - Inside MBS & ABS

Secondary Market for TRID Scratch & Dent Loans Begins to Mature; Offerings Steady but Sales Slow

The secondary market for mortgages with TRID mortgage-disclosure errors has stayed fairly constant the past few months, but there are new signs the business is getting a bit long in the tooth. According to interviews with investors and brokerage firms involved in the scratch-and-dent market, the auction of mortgages with disclosure problems (of all varying degrees) continues, but fewer sales are closing. Mid America Mortgage, Addison, TX, one of the most active buyers in the space, said...

July 15, 2016 - Inside MBS & ABS

Industry Participants Seek Exemption From Related- Party Debt Taxes that Could Apply to MBS and ABS

A new tax policy proposed by the Internal Revenue Service in April aimed at corporate “earnings stripping” tax avoidance maneuvers could cause significant problems for the MBS and ABS markets, according to industry participants. The proposed rule from the IRS under Section 385 of the Internal Revenue Code of 1986 would treat related-party debt as equity, aiming to reduce internal restructurings at foreign corporations by establishing new taxes. The Structured Finance Industry Group’s Tax Policy Committee submitted...

July 14, 2016 - Inside Mortgage Finance

Sharp Divisions as House Considers Bill that Would Repeal DFA Provisions, Provide QM Status to Portfolio Loans

The debate on what caused the financial crisis and how the federal government should respond continued this week in the House Financial Services Committee. At a hearing on the Financial CHOICE Act sponsored by Rep. Jeb Hensarling, R-TX, Republicans and banking-industry participants largely supported the bill while Democrats and a consumer advocate offered dire warnings. The Financial CHOICE Act would allow banking institutions to opt in to a regulatory system that puts an emphasis on capital. Under the bill, firms with an average leverage ratio of at least 10 percent would be functionally exempt from provisions in the Dodd-Frank Act, Basel III capital and liquidity standards and other regulations. “Freeing well-capitalized, well-managed financial firms from the chokehold of an overly intrusive, heavily politicized regulatory regime will help create...


The yield on the benchmark 10-year Treasury fell to all-time low of 1.34% recently. How much better will originations be at your shop in the second half compared to 1H, if at all?

Better by 1% to 10%.


Better by 11% to 25%.


Off the charts better. Applications are great now.


Worse than 1H, but not by much.


A lot worse. But not sure on the damage.


Housing Pulse