Legislative Issues

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

April 28, 2016 - Inside Mortgage Finance

Lawmakers Divided on GSE Payments to Affordable Housing Initiatives, Bill Introduced to Halt Payments

Underserved markets will suffer by not allowing Fannie Mae and Freddie Mac to retain capital, according to Rep. Mike Capuano, D-MA, who urged the Federal Housing Finance Agency and Treasury Department to re-examine the terms of their conservatorship. Under the current plan, the government-sponsored enterprises are not allowed to build capital and by January 2018 their reserves are expected to be wound down to zero. Capuano said...

April 28, 2016 - Inside Mortgage Finance

Senate Panel Unveils HUD Funding Bill, Spurns Lender IT Fee, Senate Okays Inclusion of Energy Costs in FHA Underwriting

The Senate Appropriations Committee last week approved funding for several housing provisions in the government’s Transportation and Housing and Urban Development fiscal year 2017 budget proposal, including FHA technological improvements, while the full Senate passed an amendment to include energy costs in FHA underwriting and appraisals. Approved by a unanimous vote of 30 to 0, the T-HUD budget bill, among other things, would provide federal funding for FHA technological upgrades rather than charge lenders an administrative fee as HUD had proposed. The committee appropriated $13 million in specific funds to improve FHA’s information technology. The proposed per-loan fee charged to lenders was projected...

April 22, 2016 - Inside MBS & ABS

As Congress Formally Punts on GSE Reform this Year, Industry Participants Propose a Number of Options

The chairman of the Senate Committee on Banking, Housing, and Urban Affairs signaled this week that Congress is unlikely to take up comprehensive legislation to reform the government-sponsored enterprises before the presidential election this fall. Committee Chairman Richard Shelby, R-AL, asked the Government Accountability Office to publish a report on a variety of issues involving the GSEs and their potential future structure by Nov. 1. Shelby’s deadline could be ambitious for such a complex issue: a report published last week by the GAO on issues with nonbank mortgage servicers was requested back in October 2014. The timeline suggests...

April 22, 2016 - Inside MBS & ABS

Agency MBS Trading Hits Low for the Year; Is Liquidity an Issue or Is This the ‘New Normal’?

The average daily trading volume in agency MBS fell to $189.4 billion in March, the lowest reading of the year, and a sign that liquidity may still be an issue, depending on which seat you’re in. According to figures compiled by the Securities Industry and Financial Markets Association, the trading numbers for 2016, so far, haven’t exactly lit the world on fire. In January and February, the readings were $195.1 billion and $201.4 billion, respectively. Last year, the best reading was...

April 18, 2016 - Inside the CFPB

Republicans Vote to Subject CFPB To Congressional Budget Process

Last week, the House Financial Services Committee approved H.R. 1486, the Taking Account of Bureaucrats’ Spending Act, or TABS Act, which would subject the CFPB to the congressional appropriations process, ostensibly to make the bureau more accountable to taxpayers, and more vulnerable to political opponents, according to supporters of the consumer regulator. “Every government agency should be accountable to the elected representatives of ‘We the People’ and the CFPB should not be an exception to that rule,” said Chairman Jeb Hensarling, R-TX. “We have the Pentagon which is on budget. We have the Justice Department which is on budget,” he added. “There is certainly no greater duty we have than to provide for the common defense, and we do not ...

April 15, 2016 - Inside MBS & ABS

Politicos Spar Over Dodd-Frank’s Impact on Market Liquidity; Regulators Suggest Market is Still Evolving

Republican and Democrat members of the Senate Banking, Housing and Urban Affairs Committee were at odds during a hearing this week over whether there is much of a liquidity problem in the fixed-income markets today, and if so, to what extent the Dodd-Frank Act or Federal Reserve monetary policy may be responsible. Federal regulators, on the other hand, told the lawmakers that markets are functioning well enough and still evolving in a new, post-crisis environment. They suggested the thing to worry about is how much liquidity there will be in five or 10 years and how it will function. Sen. Dean Heller, R-NV, asked...

April 7, 2016 - Inside Mortgage Finance

Housing Policy Experts Continue Probing for Way Out of GSE Limbo, Onerous Credit Underwriting

Housing policy experts at a Washington, DC, forum this week were generally supportive of renewed efforts to address the quagmire in which Fannie Mae and Freddie Mac have been stuck for over eight years, but there was less evidence of movement to expand the credit box. A group of high-profile policy experts led by Urban Institute Senior Fellow Jim Parrott recently tried to re-ignite the mortgage reform effort by calling for the merger of the two government-sponsored enterprises and providing an explicit government guarantee for the new entity’s mortgage-backed securities with private capital taking the first loss. Barry Zigas, director of housing policy at the Consumer Federation of American and one of the co-authors of the paper, said...

April 7, 2016 - Inside Mortgage Finance

Industry Allies Fault CFPB on TRID, ATR, Use of Enforcement Actions to Set Policy

Mortgage lending allies, free-market advocates and Congressional critics of the Consumer Financial Protection Bureau this week took issue with some of the CFPB’s most significant mortgage rules and its use of regulatory enforcement actions to establish policy they said would be more appropriately set in the traditional public notice and comment process. Former Federal Trade Commission official Todd Zywicki, now a law professor at George Mason University, told members of the Senate Banking, Housing and Urban Affairs Committee that many smaller banks have chosen to exit the mortgage market rather than bear the regulatory cost and risk associated with complying with the numerous mortgage regulations promulgated by the CFPB. Citing a survey of small banks conducted by GMU’s Mercatus Center, Zywicki said...

April 4, 2016 - Inside the CFPB

GAO Suggests Congress Give CFPB More Power

Congress should consider whether additional changes to the federal financial regulatory structure are needed to reduce or better manage fragmentation and overlap in the oversight of financial institutions and activities to improve the consistency of consumer protections, according to a new report from the Government Accountability Office. “For example, Congress could consider ... transferring the remaining prudential regulators’ consumer protection authorities over large depository institutions to the CFPB ... among other considerations,” the report stated. One of the concerns GAO raised is that a federal financial regulatory system with multiple regulators can result in inefficient and inconsistent safety and soundness and consumer protection oversight, with negative consequences for industry players. “While Congress addressed some of our concerns through consolidating rulemaking ...

April 1, 2016 - Inside The GSEs

Civil Rights Advocates Laud National Housing Trust Payment

Housing advocates and civil rights groups laud the GSEs’ first payment, $180 million, to the National Housing Trust Fund in years. It’s part of Fannie Mae’s and Freddie Mac’s efforts to support underserved markets through affordable housing, which organizations have long been calling for. But many are also worried about what the future holds for the GSEs. Wade Henderson, President and CEO of The Leadership Conference on Civil and Human Rights calls it “another significant measure taken by FHFA Director Mel Watt to shore up the commitments made to communities of color that expand affordable and sustainable housing finance.” He added that strengthening...

March 25, 2016 - Inside FHA/VA Lending

Around the Industry

House Financial Services Committee Passes Flood Insurance Bill. The House Financial Services Committee recently voted to advance legislation that would provide a private flood insurance alternative to the federal National Flood Insurance Program for homeowners required to purchase flood insurance. H.R. 2901, the Flood Insurance Market Parity and Modernization Act, passed by a unanimous vote of 53-0 and was sent to the House floor for consideration. A Senate counterpart bill, S. 1679, which was reintroduced by Sen. Dean Heller, R-NV, last year, is awaiting action in the Committee of Banking, Housing and Urban Affairs. Both bills were introduced jointly in both the House and the Senate in 2015. Currently, due to uncertainty as to whether the coverage satisfies federal requirements, many lenders are reluctant to issue mortgages for homes with ...

March 25, 2016 - Inside FHA/VA Lending

VA Provides Updated Guidance on Flint, MI Water Contamination

The Department of Veterans Affairs has issued additional lender guidance for dealing with the public water contamination problem in Flint, MI. The guidance expands on the agency’s minimum requirements for properties backed by VA loans. The guidance refers to policy in the VA Lender’s Handbook which requires properties to have “a continuing supply of safe and potable water for drinking and other household uses,” before being approved for a VA-backed home loan. In the VA’s view, safe and potable water also refers to water used for bathing, showering and sanitary uses. Properties not in compliance with this requirement will not be eligible for the VA guaranty. Proper mitigation of lead-contaminated water must include a central filtering system that is acceptable to local health authorities and that can provide safe and potable water. Appraisers must comment and adjust for any ...

March 25, 2016 - Inside MBS & ABS

Experts Propose Merging Fannie and Freddie, Outsourcing All the Risk and Making Explicit Government Guaranty

Five mortgage industry veterans – including two who worked in the Obama White House – this week floated a new plan aimed at preserving the government guaranty on conventional MBS and ending, once and for all, the uncertainly plaguing the secondary market. In a new white paper entitled “A More Promising Road to GSE Reform,” the authors aim to preserve the government-backed MBS market while merging Fannie Mae and Freddie Mac into a new institution called the National Mortgage Reinsurance Corp. But the proposal might be...

March 24, 2016 - Inside Mortgage Finance

House Committee Unanimously Approves Bill Allowing Private Carriers to Go Head-to-Head with Federal NFIP

The House Financial Services Committee recently voted to advance legislation that would provide a private flood insurance alternative to the federal National Flood Insurance Program for homeowners required to purchase flood insurance. H.R. 2901, the Flood Insurance Market Parity and Modernization Act, passed by a unanimous vote of 53-0 and was sent to the House floor for consideration. A Senate counterpart bill, S. 1679, which was reintroduced by Sen. Dean Heller, R-NV, last year, is awaiting action in the Senate Banking, Housing and Urban Affairs Committee. Both bills were introduced...

March 24, 2016 - Inside Mortgage Finance

Congressional Republicans Introduce Legislation to Block Implementation of DOL’s Revised Overtime Rule

Republican members of the House and the Senate have introduced legislation that would nullify the Department of Labor’s much-anticipated white-collar overtime exemption rule now under review at the Office of Management and Budget. Introduced jointly by GOP members of the House Committee on Education and the Workforce and the Senate Committee on Health, Education, Labor and Pensions, the bill would stop the DOL’s proposed expansion of mandatory federal overtime pay in its tracks. The bill, Protecting Workplace Advancement and Opportunity Act, would provide...

March 18, 2016 - Inside The GSEs

NAR Urges Senate to Support BIll that Limits G-Fee Usage

Full Senate to cosponsor a bipartisan bill that aims to make sure guaranty fees from Fannie Mae and Freddie Mac will not be used for other purposes. Legislation, S.752, was introduced by Sens. Bob Crapo, R-ID and Mark Warner, D-VA, in March 2015, to establish a scorekeeping rule so g-fee increases aren’t going toward offsetting spending that increases the deficit. Tom Salomone, president of the NAR, said any time g-fees are extended, increased and diverted for unrelated spending, homeowners are charged more for their mortgage and taxpayers are exposed to additional long-term risk. He emphasized that the purpose of g-fee revenue is to guard against GSE credit losses and should only be used to protect taxpayers from mortgage losses.


Does your lending shop have any plans to make non-jumbo, non-QM loans this year? These would be loans similar to "Alt A" and subprime products made BEFORE standards were loosened severely in the 2004 to 2007 era.





It’s under consideration, maybe by 3Q or 4Q.


We were going to until the TRID "error" mess hit.


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