Legislative Issues

Browse articles from all of our Newsletters related to Legislative Issues.

May 22, 2015 - Inside The GSEs

GSE Roundup

U.S. Mortgage Insurers Supports GSE Risk-Sharing. The USMI wrote a letter this week to Sen. Richard Shelby, R-AL, in support of Shelby’s regulatory relief bill, which calls on the GSEs to engage in front-end risk sharing transactions. “This directive would make greater use of private capital to “de-risk” the GSEs, lower the exposure and costs for the enterprises and taxpayers and should lower costs to borrowers,” the trade group said. Fannie Names Winning Bidders of First NPL Sale. Fannie Mae unveiled the winning bidders on its first-ever sale of non-performing mortgages last week: SW Sponsor LLC and PRMF Acquisition, the latter of which is an affiliate of Neuberger Berman Fixed Income Funds. The GSE...


May 22, 2015 - Inside MBS & ABS

Senate Committee Passes GOP Regulatory Relief Bill, GSE Capital Requirements Amendment Withdrawn

The Senate Banking, Housing and Urban Affairs Committee approved a Republican regulatory relief bill on a strictly partisan vote late this week, with all of the mortgage-finance provisions previously reported intact. Sen. Pat Toomey, R-PA, momentarily offered Fannie Mae and Freddie Mac a “get out of jail free” card, in the form of an amendment addressing capital requirements for the two government-sponsored enterprises, then withdrew it, presumably for use at a future point in time. “This is...


May 22, 2015 - Inside MBS & ABS

Single-Security Is Years in the Distance as CSS Focuses On ‘Getting It Right,’ Bringing All Parties to the Table

Officials involved in the development of the common securitization platform and the single, interchangeable MBS for Fannie Mae and Freddie Mac have vowed not to publicize any timetable for the project. And despite several attempts to get an answer during a panel session at this week’s secondary market conference sponsored by the Mortgage Bankers Association, they stuck to their plan. They went out of their way to stress that they haven’t forgotten about potential non-agency users sometime down the road. But that’s...


May 21, 2015 - Inside Mortgage Finance

Dems’ Alternate Reg Relief Bill Would Confer QM Status on Portfolio Loans Only for Small Lenders

The noise over regulatory relief legislation is getting louder. Over the past week, Republicans in the Senate issued a clarification of sorts about their draft legislation, Democrats came up with a narrower alternative and the industry weighed in as the Senate Banking, Housing and Urban Affairs Committee prepared for a markup scheduled for late this week. A noteworthy provision in the Democrats’ proposal would extend qualified-mortgage status for loans originated and held in portfolio – but only if the depository institution has less than $10 billion in assets. The GOP bill would extend this safe harbor to all banks, thrifts and credit unions. The Democratic proposal would bar...


May 21, 2015 - Inside Mortgage Finance

Analysts See Stronger Market in 2015, But Little Change In Fundamental Problems Facing the Mortgage Industry

Housing is showing some traction, but heavy regulation and enforcement continue to weigh on the mortgage market, according to analysts at this week’s secondary-market conference sponsored by the Mortgage Bankers Association in New York. Charles Gabriel, president of Capital Alpha Advisors, said there are some green shoots in the mortgage market, including signs of more home sales. But he characterized it as “a mature market that is suboptimized.” Lenders have paid massive penalties in lawsuits, he added, and there is no sign that they will expand the credit box. “U.S. Bank was asked...


May 18, 2015 - Inside the CFPB

Bipartisan Pressure Mounts For TRID ‘Hold-Harmless’ Period

If one of the sponsors of the Dodd-Frank Act supports giving mortgage lenders an enforcement break when the CFPB’s integrated disclosure rule kicks in later this year, you know something serious is afoot. Such is indeed the case. Rep. Brad Sherman, D-CA, one of the original backers of Dodd-Frank, has crossed the partisan aisle in the House Financial Services Committee to join Rep. Steve Pearce, R-NM, in introducing H.R. 2213. Their bill would grant lenders a temporary safe harbor from enforcement of the rule integrating the required mortgage disclosures under the Truth in Lending Act and the Real Estate Settlement Procedures Act. More specifically, H.R. 2213 would protect lenders from private lawsuits and regulatory enforcement actions through Dec. 31, 2015, ...


May 15, 2015 - Inside FHA/VA Lending

Around the Industry

House GOP’s Proposed Budget Rejects IT Administrative Fee, HTF. House Republicans withheld funding for a proposed administrative fee, which the FHA planned to invest in technology to improve quality assurance and reduce paid-claims losses. The Department of Housing and Urban Development first requested authority to collect the fee in the President’s FY 2015 budget request but was turned down. It appears House Republicans are on track again to reject the proposed fee in the FY 2016 appropriations bill, said HUD Secretary Juan Castro. Castro lambasted the House Republicans’ proposed budget cuts, saying they would hinder HUD from carrying out its mission and from investing in communities that most need help. The GOP bill also rescinds funding to the proposed Housing Trust Fund, which allocates a small percentage of Fannie Mae and Freddie Mac profits to ...


May 15, 2015 - Inside MBS & ABS

Critics Slam Dodd-Frank and the Failure to Reform Housing Finance System, Predict More Failure

Republicans in the House of Representatives continued their efforts to chip away at the Dodd-Frank Act during a hearing this week by rolling out critics who said the act not only was a poor and ineffective response to the 2008 financial crisis, but also created a host of new problems and could be contributing to the next debacle. Rep. Sean Duffy, R-WI, chairman of the House Financial Services Oversight and Investigations Subcommittee, said a major assumption underlying Dodd-Frank – that the primary cause of the financial crisis was misbehavior by securities market participants – was false. “Main Street lenders are being...


May 15, 2015 - Inside MBS & ABS

Shelby Bill Would Open Access to Emerging GSE Securitization Platform, Expand Risk Transfers

A new regulatory relief bill drafted by Sen. Richard Shelby, R-AL, would guarantee that the common securitization platform project managed by Fannie Mae and Freddie Mac would be open to all MBS issuers “as soon as practicable,” and structured as a nonprofit utility. The legislation, which also expands the risk-transfer activities of the two government-sponsored enterprises, lays the groundwork for the CSP being transferred away from the GSEs and managed by a third-party provider. But that doesn’t mean...


May 14, 2015 - Inside Mortgage Finance

Fresh Faces, Ideological Differences Continue To Darken Outlook for GSE Reform Legislation

Realtors want Congress to tackle reform of the government-sponsored enterprises, but they are keenly aware of the huge difficulties facing the effort, according to participants at this week’s annual legislative conference held by the National Association of Realtors. “I think what we want to get through to people in Congress is that these [GSE] programs were designed to be around and to be effective in times of a recession and prosperity in every single section of the country. That’s what they were there to do,” said Jerry Giovaniello, NAR’s senior vice president of government affairs. He said...


May 14, 2015 - Inside Mortgage Finance

CFPB Director Cordray Resists Continued Pressure From Lawmakers to Delay TRID Enforcement

Consumer Financial Protection Bureau Director Richard Cordray continues to tell the mortgage industry and its allies in Congress that the CFPB will not look the other way while the industry grapples with implementation of the integrated mortgage disclosure rule. The director’s latest official rebuff was delivered in a recent letter to Rep. Blaine Luetkemeyer, R-MO, who has been pressing the director for some kind of an enforcement grace period. Cordray historically has been...


May 14, 2015 - Inside Mortgage Finance

FHFA Provokes Critics on Capitol Hill by Weighing Hefty Increases in Fannie/Freddie CEO Compensation

The Federal Housing Finance Agency is drawing flak after asking Fannie Mae and Freddie Mac CEOs to submit executive compensation analyses that could significantly boost pay for top management at the government-sponsored enterprises. The FHFA capped Fannie and Freddie CEO salaries at $600,000 in 2012, but FHFA Director Mel Watt wants to change that. In its first-quarter earnings statement, Freddie revealed that the regulator asked the GSEs’ boards to review CEO compensation. Rep. Ed Royce, R-CA, doesn’t...


May 8, 2015 - Inside The GSEs

Redirecting GSE Funds from One Housing Program to Another

A bill to redirect all 2016 funds from the Housing and Urban Development’s National Housing Trust Fund, which currently receives money from Fannie Mae and Freddie Mac to HUD’s HOME Investment Partnerships Program, was approved by a House subcommittee last week. Affordable housing advocates question the bill approved by the House Appropriations Subcommittee on Transportation, Housing and Urban Development and Related Agencies. In essence, the bill was designed to cover a shortfall in the HOME program funding. Sheila Crowley, president of the National Low Income Housing Coalition, said the bill “expresses a callous disregard for the plight of millions of Americans who labor in the low wage workforce and still cannot find modest housing they can afford to rent.”


May 8, 2015 - Inside MBS & ABS

Despite Regulatory Concerns, PACE Programs Continue to be Regarded as Viable Funding Choice

Despite the Federal Housing Finance Agency’s misgivings about Property Assessed Clean Energy programs, ABS issuers are finding investors for deals backed by these loans. Since March 2014, three rated residential ABS transactions and one private unrated commercial deal backed by PACE assessments have been issued for a combined total of $503.65 million. All three residential ABS deals were rated “AA,” with average assessments totaling $59,628. The PACE program was launched in 2008 by the city of Berkeley, CA, as a pilot to promote energy efficiency in residential, commercial, agricultural and industrial properties...


May 7, 2015 - Inside Mortgage Finance

Bipartisan House Bill Would Allow for Bank Loan Officers to More Easily Jump Ship to Nonbanks

Mortgage industry participants are encouraged by a bipartisan bill introduced in the House last week that would provide a temporary license for loan originators transitioning from a bank to a nonbank or between states. H.R. 2121, from Rep. Steve Stivers, R-OH, would change the Secure and Fair Enforcement for Mortgage Licensing Act to allow for a temporary transitional license and give loan originators 120 days to pass testing standards for nonbank LOs when transitioning from a bank or between states. “The SAFE Act inhibits...


May 1, 2015 - Inside FHA/VA Lending

Around the Industry

VA Clarifies HUD-1 Itemization Requirements. The Department of Veterans Affairs’ Home Loan Guaranty office has issued guidance clarifying HUD-1 documentation and itemization requirements. The HUD-1 is a statement lenders furnish to borrowers at closing showing the actual settlement costs, including amounts paid to and by the settlement agent. The guidance clarifies and establishes VA policy regarding the following: itemization of lender/seller credits in the 200 series of the HUD-1; itemization of line 801 on the HUD-1; clarification that credits reflected on line 803 of the HUD-1 cannot offset allowable fees’ and itemization of line 802 on the HUD-1. Ginnie Mae Announces Update to Securitization of USDA Section 538 Multifamily Loans. Ginnie Mae has enhanced the securitization of rural, multifamily housing loans with a Department of Agriculture guaranty to make affordable housing available to ...


May 1, 2015 - Inside FHA/VA Lending

Grassley Seeks HUD’s Explanation For Controversial Appointments

Sen. Chuck Grassley, R-IA, chairman of the Senate Committee on the Judiciary, has asked the Department of Housing and Urban Development to explain the duties and functions of two officials who were appointed as “principal deputy assistant secretary.” The appointments make it appear that HUD is deliberately circumventing the nomination process by creating new official titles for appointees without obtaining Senate confirmation, said Grassley. If that is the case, HUD Secretary Julian Castro may be in violation of the Vacancies Reform Act of 1998, the lawmaker warned. The statute provides several mechanisms to fill job positions that require candidates to be nominated by the President with the advice and consent of the Senate. “The Vacancies Act also declares that those mechanisms are the exclusive means of filling vacancies,” Grassley said. “Creating new job titles is not ...


May 1, 2015 - Inside FHA/VA Lending

Quicken Lawsuit Can Help Clarify FHA Rules, Government Use of FCA

Quicken Loan’s lawsuit against the government could help provide some certainty to lenders as to the proper legal standard for evaluating compliance with FHA rules and whether loan sampling is a permissible post-endorsement review strategy, according to legal experts. The adjudication of Quicken’s case against the Department of Justice in a public forum should clarify FHA policies, procedures, and the degree of future liability risks, experts said. Quicken Loans, the top FHA lender in 2014, sued the Department of Justice in federal court in Detroit April 17, accusing it of high-pressure tactics to admit wrongdoing and of using a small sample of flawed loans as a basis for claims under the False Claims Act. Up to that time, Quicken Loans had been the subject of an ongoing DOJ probe, which began three years earlier, in relation to its FHA lending practices. Quicken also asserted that, before filing its lawsuit ...


May 1, 2015 - Inside MBS & ABS

HUD Appropriations Bill Cracks Down on Eminent Domain, Blocks Federal Involvement

The House Appropriations Subcommittee on Transportation, Housing and Urban Development this week approved a fiscal 2016 HUD appropriations bill, with language that would bar FHA, Ginnie Mae or HUD from deploying federal funds to foster the use of eminent domain to seize mortgages. “None of the funds made available in this act shall be used by [the three agencies] to insure, securitize or establish a federal guarantee of any mortgage or MBS that refinances or otherwise replaces a mortgage that has been subject to eminent domain condemnation or seizure, by a state, municipality or any other political subdivision of a state,” states Section 229 of the legislation. The Structured Finance Industry Group said...


April 30, 2015 - Inside Mortgage Finance

Senate Panel to Mark Up Reg Relief Bill Shortly; Meanwhile, All is Silent on the GSE Reform Front

Republican leaders in the Senate and the House plan to press ahead with legislation to provide regulatory relief for mortgage lenders, especially for small community banks. It’s likely that provisions to automatically designate mortgages held in portfolio as qualified mortgages will be included in a legislative package the Senate Banking, Housing and Urban Affairs Committee will mark up sometime in the middle of May. And Republicans might use...


April 20, 2015 - Inside the CFPB

Looking Ahead/Worth Noting

CFPB Community Bank Advisory Council Meeting April 22. CFPB Director Richard Cordray plans to discuss credit scores and credit reporting and the related implications for community banks when the bureau convenes the next meeting of its Community Bank Advisory Council on April 22, from 3:00 p.m. to 4:30 p.m., in Washington, DC. The event is scheduled to be held at the bureau’s location at 1275 First Street, N.E., and is open to the public, but an RSVP is required to attend. CFPB to Hold Research Conference May 7-8. The CFPB plans to host its first research conference May 7-8, 2015. The conference will focus on high-quality consumer finance research, with academic and government researchers presenting their research papers. “The goal ...


April 20, 2015 - Inside the CFPB

Warren Wants Auto Dealers’ Scalp, Says CFPB Should Get Oversight

The CFPB doesn’t have enough power as currently authorized under the Dodd-Frank Act and should be given oversight over auto dealers, according to the “mother” of the bureau, Sen. Elizabeth Warren, D-MA. “The consumer agency’s early results have been good for consumers and good for the economy as a whole, but there’s more to be done,” Warren said in a speech last week. “Right now, the auto loan market looks increasingly like the pre-crisis housing market, with good actors and bad actors mixed together.” As the senator sees it, the market is now “thick with loose underwriting standards, predatory and discriminatory lending practices,” and increasing repossessions. She then cited one study that estimated that these kinds of auto dealer markups ...


April 20, 2015 - Inside the CFPB

Congresswoman Says Bureau Needs to Create Clear Rules

Congresswoman Krysten Sinema, D-AZ, said that the CFPB can be a source of confusion for many in the mortgage industry. Although the overall idea of the bureau is sound, the implementation has been difficult, she said. “It’s been particularly frustrating for folks working in the industry,” she said at last week’s Mortgage Bankers Association’s National Advocacy Conference in Washington, DC. “Part of the frustration is that the CFPB is set up as an independent organization where Congress doesn’t have any kind of official oversight.” Sinema, a member of the House Committee on Financial Services, believes there’s a lot of room for growth in terms of accountability with the bureau, and said creating clearer rules is a part of it. “One ...


April 20, 2015 - Inside the CFPB

Mortgage Lenders Support Modifying CFPB Structure

The Mortgage Bankers Association sent a letter to House Republican leadership recently in support of three bills that would restructure the CFPB. The bills include H.R. 1266, the Financial Products Safety Commission Act, which would replace the CFPB’s single-director governance structure with a five-member commission. “A commission structure assures judicious consideration of a range of viewpoints in carrying out regulatory functions with appropriate involvement of representatives of both parties and a range of interests including those of both consumers and industry,” the MBA said. There is also H.R. 1261, the Bureau of Consumer Financial Protection Accountability Act, which would subject the bureau to the congressional appropriations process. “It is important to note the legislation does not limit funding for the ...


April 20, 2015 - Inside the CFPB

Lawmakers Join Growing Chorus Calling for Eased TRID Enforcement

The odds that the CFPB will publicly announce or tacitly concede some degree of soft enforcement of its integrated disclosure rule, known as TRID, may have improved recently when two Republican Congressmen called on the bureau to give the mortgage industry such a break when the rule kicks in Aug. 1, 2015. “We strongly encourage you to make the August 1, 2015, to December 31, 2015, timeframe a ‘hold harmless’ period of restrained enforcement and liability,” said Reps. Blaine Luetkemeyer, R-MO, and Randy Neugebauer, R-TX, in a letter recently sent to CFPB Director Richard Cordray. “This would allow all parties to better understand the changes associated with TRID and help ensure consumer confidence and stability in the nation's housing market,” ...


April 20, 2015 - Inside the CFPB

House Points-and-Fees Bill Faces Resistance in Senate

Days after the full House of Representatives passed legislation that would amend the points-and-fees calculation in the CFPB’s ability-to-repay rule, the bill ran into some sudden resistance on the other side of Capitol Hill. H.R. 685, the Mortgage Choice Act, is a bipartisan bill that would clarify that certain affiliated title costs do not count against the “qualified mortgage” 3 percent cap on points and fees under the bureau’s ATR rule. H.R. 685, introduced by Rep. Bill Huizenga, R-MI, with dozens of co-sponsors from both parties, would exclude from the definition of points and fees all title charges, regardless of whether they are charged by an affiliated company, provided they are bona fide and reasonable. Lawmakers in the House passed ...


April 17, 2015 - Inside Nonconforming Markets

Little Movement on GSE Reform, G-Fees

The Obama administration and the head of the Mortgage Bankers Association, among others, agree that the ongoing conservatorship of the government-sponsored enterprises is unsustainable. However, with a strong divide between political parties regarding the level of government support needed in a system that replaces Fannie Mae and Freddie Mac, GSE reform remains a notion years away from completion. “Market participants are truly uncertain about the government’s longer-term ...


April 16, 2015 - Inside Mortgage Finance

Treasury Official Says GSEs, Housing Market Better Off Under Current Conservatorship Plan

Fannie Mae and Freddie Mac are legally bound to poverty and to remain instruments of the federal government in perpetuity, but Treasury officials argue that the current conservatorship arrangement is better for the government-sponsored enterprises and the housing market. At a seminar in Washington, DC, this week, Treasury Counselor Michael Stegman said that the GSEs benefit from the agreement under which nearly all of their profits are siphoned off by the government ...


April 16, 2015 - Inside Mortgage Finance

House Passes Points-and-Fees Legislation With Solid Bipartisan Support, But Veto Looms

The House of Representatives early this week passed H.R. 685, the “Mortgage Choice Act,” bipartisan legislation which would clarify that certain affiliated title costs do not count against the “qualified mortgage” cap on points and fees under the ability-to-repay rule. H.R. 685, introduced by Rep. Bill Huizenga, R-MI, with 37 co-sponsors from both parties, excludes from the definition of points and fees all title charges, regardless of whether they are charged by ...


April 10, 2015 - Inside The GSEs

Former FDIC Chief Criticizes Treasury Sweep Decision

Conservatorship has left Fannie Mae and Freddie Mac in a state of flux, according to former Federal Deposit Insurance Corp. Chairman William Isaac, who recently criticized the federal government’s verdict to let the Treasury Department take the bulk of the GSEs profits. As anxiety continues to grow about the sustainable profitability of Fannie and Freddie, Isaac said there doesn’t appear to be light at the end of the tunnel. “We need to bring some fresh thought to this issue,” he said during a teleconference sponsored by Investors Unite last week. Although he said there has been very little movement on the issue within the past year. Isaacs said until a resolution is reached, “it’s very important that the government treat...


April 10, 2015 - Inside The GSEs

Sen. Grassley Demands PSPA Third Amendment Transparency

Sen. Chuck Grassley, R-IA, chairman of the Judiciary Committee, sent letters on April 7 to the Department of Justice and the Treasury requesting documents and details regarding the government’s 2011 decision to take the bulk of Fannie Mae’s and Freddie Mac’s profits. This comes on the heels of reports suggesting President Obama has invoked executive privilege over some of the documents pertaining to the decision. While admitting that he’s unclear whether or not the president asserted executive privilege, Grassley emphasized the importance of transparency and said taxpayers have a right to know what transpired that resulted in billions of dollars going to the Treasury. “But instead of transparency, there appears to be an invocation of executive privilege,” he said. “If true, this is cause for concern.”


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