Legislative Issues

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

September 15, 2014 - Inside the CFPB

Legislative Update/Worth Noting/Looking Ahead

Industry Tries to Rustle Up Support for QM Points-and-Fees Legislation. The Mortgage Action Alliance, the grassroots advocacy group of the Mortgage Bankers Association, recently issued a “call to action” to its members to get on the telephone and call their Senators and urge them to pass legislation that would make key changes to the way points and fees are calculated under the qualified mortgage definition in the CFPB’s ability-to-repay rule. S. 1577, the Mortgage Choice Act of 2013, introduced last year by Sen. Joe Manchin, D-WV, exempts any affiliated title charges and escrow charges for taxes and insurance from the QM cap on points and fees. Manchin’s bill is a legislative companion to H.R. 3211, the Mortgage Choice Act, which ...

September 15, 2014 - Inside the CFPB

Rep. Maloney Urges CFPB to Act On Overdraft Fees, Despite Trends

In what looks like an example of a minority party member of Congress trying to outflank the majority party, Rep. Carol Maloney, D-NY, a member of the House Financial Services Committee, wrote CFPB Director Richard Cordray last week and urged the agency take specific steps to address certain checking account overdraft practices. Some of her suggestions are included in legislation she introduced last year that has not been taken up by committee. Maloney’s recommendations come despite indications that most bank customers overall pay little or nothing for their monthly banking services. Referencing a related study issued by the bureau in July, Maloney said the agency’s report provides “indisputable evidence” that consumers who have not opted in to overdraft protection are ...

September 15, 2014 - Inside the CFPB

Waters’ Bill Would Task CFPB With Multiple Credit-Reporting Reforms

The CFPB would have a handful of new oversight responsibilities for the credit-reporting sector under a discussion draft of possible legislation entitled the “Fair Credit Reporting Improvement Act of 2014,” circulated last week by Rep. Maxine Waters, D-CA, the ranking member of the House Financial Services Committee. Among the draft’s provisions is a directive for the bureau to set standards for validating the accuracy and predictive value of credit score algorithms, formulas, models, programs, and mechanisms…

September 12, 2014 - Inside FHA Lending

MMIF in Negative Cash Flow in 2Q14, Says Report

The FHA Mutual Mortgage Insurance Fund account balances fell by $0.5 billion during the second quarter of 2014 to $45.3 billion due to higher claim payments and property expenses. Observers, nonetheless, remain optimistic the fund will return to full stability in 2015 with no further change in the mortgage insurance premium charged to borrowers. The MMIF’s total balances peaked at $48.4 billion in the third quarter of 2013 and then slipped gradually over the last three quarters, according to data in the FHA’s latest report to Congress regarding the financial health of the Mutual Mortgage Insurance Fund. Total revenues from premium collections, property sale, and note sale proceeds were $4.3 billion, while $5.1 billion was paid to cover claims and property expenses in the second quarter. This resulted in a negative$821 million cash flow in the quarter, the smallest outflow since ...

September 12, 2014 - Inside Nonconforming Markets

News Briefs

S. 1217, the Housing Finance Reform and Taxpayer Protection Act of 2014, would decrease federal deficits by a total of $58 billion from 2015 to 2024, according to the Congressional Budget Office. The Senate Committee on Banking, Housing, and Urban Affairs approved the legislation to reform the government-sponsored enterprises earlier this year but the full Senate has yet to consider the bill and there is little support for the legislation in the House.

September 12, 2014 - Inside MBS & ABS

DeMarco Cites ‘Structural Improvements’ in Housing Six Years After GSE Conservatorship, More Needed

Six years after the government takeover of Fannie Mae and Freddie Mac, the former regulator of the government-sponsored enterprises noted that the housing finance system has made “significant progress.” But even as critical structural changes are underway, comprehensive improvement is still several years out. In a policy paper issued last week, Edward DeMarco – new senior fellow-in-residence for the Milken Institute’s Center for Financial Markets – said that house prices, as measured by the Federal Housing Finance Agency, have recovered more than 50 percent since their decline in 2007. “While the damage from the housing crisis has been substantial, we are finally seeing...

September 11, 2014 - Inside Mortgage Finance

CBO Report: Senate Bill Proposal to Eliminate GSEs Would Save Billions, Depending on the Accounting

A Congressional Budget Office conclusion that the leading bipartisan mortgage-reform bill could save the government a lot of money likely won’t bring the legislation back to life in this Congress, but it could bolster a similar approach down the road. The CBO estimated that replacing Fannie Mae and Freddie Mac with a new securitization program that couples a first-loss position for private capital with back-end government insurance could reduce “direct spending” by $60 billion over the 2015-2024 period. The Housing Finance Reform and Taxpayer Protection Act of 2013, S. 1217, drafted by Senate Banking, Housing and Urban Affairs Committee Chairman Tim Johnson, D-SD, and Ranking Member Mike Crapo, R-ID, would establish...

September 5, 2014 - Inside The GSEs

Experts: No Chance of Advancing GSE Reform in Remaining Congress

When lawmakers return from their five-week August recess next week, House and Senate members will face a lengthy agenda with just a short period of time to get it done. Conspicuously absent from the Congressional to-do list is housing finance reform. With approximately 12 scheduled legislative days before the Nov. 4 midterm elections, industry observers note that lawmakers won’t get to some things until they return for the lame duck session, while other bills will fade away as the clock runs out.

September 1, 2014 - Inside the CFPB

Legislative Update

Bipartisan Legislation Would Increase Threshold for CFPB Supervision. Right before Congress took off for its summer recess, Republican Sen. Pat Toomey of Pennsylvania and Democrat Sen. Joe Donnelly of Indiana introduced S. 2732, the Consumer Financial Protection Bureau Examination and Reporting Threshold Act of 2014. The act would increase the current $10 billion asset threshold figure at which regulated depository institutions are subject to direct examination and reporting requirements of the CFPB to $50 billion. “The higher threshold would be substantially the same as the threshold for a bank to be designated ‘systemically important’ (i.e., assets of $50 billion or more),” said attorney Barbara Mishkin, of counsel with the Ballard Spahr law firm, in a recent client note. CBO Pegs ...

August 29, 2014 - Inside FHA Lending

State Legislatures Pass Reverse Mortgage Bills

Two states have passed legislation placing varying spins on the Department of Housing and Urban Development’s counseling requirements for lenders and borrowers of FHA-insured reverse mortgages. In California, the state Senate unanimously approved AB 1700, which would mandate a seven-day “cooling off” period between the time a borrower receives counseling and when an application is taken. AB 1700 passed the CA Assembly by a vote of 73 to 1. In addition, the bill would require a lender to provide a worksheet guide that addresses certain issues the borrower should consider and discuss with the counselor, such as income and ability to repay as well as taxes and insurance. The counselor and the borrower are both required under the bill to sign the worksheet guide before any reverse mortgage application is taken. No schedule has been set for ...

August 22, 2014 - Inside The GSEs

Report: Don’t Expect GSE Reform Until At Least 2016

There is little to no chance of legislative GSE reform occurring until at least 2016, so market participants should plan accordingly, predicted a report issued last week. Despite two separate bills awaiting a floor vote in both the House and Senate, Kroll Bond Rating Agency said there’s little chance housing reform legislation will garner enough support to pass until after the next presidential election.

August 15, 2014 - Inside FHA Lending

More Indemnification Demands Anticipated

The False Claims Act (FCA) and the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) not only have become strong enforcement tools in the fight against FHA mortgage fraud but also an efficient means of recovering taxpayer losses. Having used both federal statutes effectively to wrangle huge settlements from large banks, federal prosecutors now have their eyes set on mid-level banks, according to compliance experts during a recent webinar hosted by Inside Mortgage Finance Publications. “Because these FCA [and FIRREA] lawsuits have been a cash cow for the Department of Justice and the Inspector General of the Department of Housing and Urban Development, I think these agencies will target mid-level banks next,” said ...


Over the next six months we plan to hire this many more additional loan officers:

1 to 10 (We're being careful.)
11 to 30 (We're optimistic.)
More than 30 (We're in a growth mode as the banks get out.)
We're cutting back. (Are you nuts? It's ugly out there.)

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