Regulations

Browse articles from all of our Newsletters related to Regulations.

November 20, 2014 - Inside Mortgage Finance

Sen. Johnson Calls for End of Conservatorships, Dems Push Watt Hard on GSE Principal Reduction

The outgoing chairman of the Senate Banking, Housing and Urban Affairs Committee this week urged the head of the Federal Housing Finance Agency to look to a final resolution of Fannie Mae and Freddie Mac, while the progressives on the panel pressed the regulator and former Democrat congressman hard to approve principal reductions. “Everyone agrees that conservatorship cannot continue forever, so I hope my colleagues will keep working towards a more certain future for the housing market,” said Sen. Tim Johnson, D-SD, during a hearing with FHFA Director Mel Watt this week. But if “Congress cannot agree on a smooth, more certain path forward I urge you, Director Watt, to engage the Treasury Department in talks to end the conservatorship.” Watt did not address...


November 20, 2014 - Inside Mortgage Finance

CFPB Enforcement Actions Highlight What Mortgage Servicers Need to Look Out For

A careful examination of the big-ticket enforcement actions the Consumer Financial Protection Bureau has brought against leading mortgage servicers can help others in the space avoid the same fate and protect their bottom lines, according to top industry legal experts. During an Inside Mortgage Finance webinar earlier this week, Allyson Baker, a former CFPB attorney and partner at the Venable law firm in Washington, DC, discussed the importance of trends seen in a handful of servicing enforcement cases against Ocwen, SunTrust Bank and Flagstar Bank. “I think...


November 20, 2014 - Inside Mortgage Finance

FHA Mutual Mortgage Insurance Fund Capital Turns Positive, But No Change to Mortgage Insurance Premiums

The FHA Mutual Mortgage Insurance Fund has improved from a negative position to a positive $4.8 billion in FY 2014 after gaining nearly $6 billion in value over the last year, thanks to aggressive policy actions that led to improvements in key areas, according to an independent actuarial report sent to Congress this week. Overall, the fund showed a $21 billion improvement over the past two years due to changes the FHA implemented following the housing crisis, the report said. The changes led to improved underwriting standards for single-family mortgages, increased mortgage insurance premiums, stronger loss mitigation policies and higher recoveries, it noted. Aggressive policy actions also led...


November 20, 2014 - IMFnews

Short Takes: Stop Guessing on Lawsky Already / Share Price of Fannie and Freddie Common Soars / Foreclosures on the Rise / Essent Sells More Stock

A GSE bill? Since Congress and President Obama have such a strong track record of working together on legislation we know how that’s going to turn out…


November 20, 2014 - IMFnews

Fannie and Freddie Make it Official on R&W Relief but with Several ‘Exclusions’

In regard to misrepresentations, relief will not be offered if it can be proved that a borrower was misled by the originator. And, of course, any mortgage subject to fraud must be bought back.


November 20, 2014 - IMFnews

FHFA’s Watt: Fewer Than 100 Companies Affected by FHLB Membership Changes

Several weeks back, a FHFA official told IMFnews that just 18 members would be affected by the captive rule, mostly REITs.


November 20, 2014 - IMFnews

CFPB Increasingly Working with Other Law Enforcement ‘Partners’

Mortgage companies may not realize it, but the CFPB is partnering with the state attorneys general, the Department of Justice, and in some cases, the Department of Financial Services in New York.


November 19, 2014 - IMFnews

Short Takes: Any G-Fee News? No / Keeping an Eye on MSR Sales / Why Realtors Will Live Forever / California Home Sales Nothing Special / Jeb Will be Back, Hensarling At Least

After a servicing sale closes, the GSEs must monitor each transaction to make sure the transfer of receivables took place in a timely manner and more…


November 19, 2014 - IMFnews

CFPB Warns Mortgage Firms on How they Treat Borrowers with Disability Income

The new bulletin discusses standards and guidelines on verification of disability income, including those under the CFPB’s ability-to-repay rule.


November 19, 2014 - IMFnews

Senate Banking Chair Urges Watt and Treasury to End GSE Conservatorships

The two GSEs have been in conservatorship for six-plus years now, with no legislative solution to their future in sight.


November 19, 2014 - IMFnews

Morningstar: CMBS Market Notorious for ‘Rating Shopping’

The CMBS market is well known for rating shopping, where issuers will invite up to six CRAs to conduct a preliminary review of an initial asset pool.


November 18, 2014 - IMFnews

Lower FHA Premiums? Dream On…

In a statement, Rep. Hensarling decried last year’s $1.7 billion “taxpayer-funded bailout” of the FHA.


November 18, 2014 - IMFnews

Short Takes: Obama Won’t Give Up on Killing the GSEs / Redwood Sells Debt / More Ocwen Customer Complaints / Carrington Bolts ARMs / The Return of Mike Baldwin

Republicans have never been big fans of the GSEs and there’s plenty of Democrats who aren’t so sure about the government “guaranty” as well...


November 18, 2014 - IMFnews

FHFA: Extensive ‘Testing’ Underway at Common Securitization Platform

In 2015, the team at the GSE common securitization platform will focus on implementation of the remaining software components...


November 18, 2014 - IMFnews

Fannie Continues to Loosen Rules; 990 Days for a Foreclosure in New York

Fannie Mae recently loosened its credit standards on condominium loans. What's next?


November 17, 2014 - IMFnews

FHA’s Mutual Mortgage Insurance Fund in the Black by $4.8 Billion

The FHA’s annual independent actuarial review of the MMIF showed a capital reserve of 0.41 percent at Sept. 30, 2014.


November 17, 2014 - IMFnews

Short Takes: Former FHFA Chief Blasts Mortgage Industry / Who’s Behind the HIC? / More Relief From FHA / Ocwen’s Stock Recovers Slightly / Venable Hires Ex-Hensarling Staffer

So, which groups are behind the "housing-industrial complex"? DeMarco isn't naming names...


November 17, 2014 - IMFnews

FHFA’s Watt Testifies Before Senate Panel This Week; FHLB Membership a Key Topic?

The senate panel is expected to ask questions on guaranty fees and the common securitization platform as well.


November 14, 2014 - Inside The GSEs

Enterprise Endnotes

Ohio Court Sides With Freddie in Pre-Crisis Shareholder Lawsuit. An Ohio federal court late last week tossed out a shareholder class action lawsuit that accused Freddie Mac of lying about its exposure to subprime loans prior to the 2008 financial crisis. The suit, filed in 2008 by the Ohio Public Employees Retirement System, claimed that Freddie artificially inflated the value of its common stock by making false public financial statements that obscured its subprime exposure.OPERS claimed it lost as much as $27.2 million as a result of Freddie’s alleged cover-up of its subprime exposure.


November 14, 2014 - IMFnews

What We’re Hearing: Can Cerberus Finally Do Something Right in Mortgages? / Kinder, Gentler Condo Guidelines from Fannie? / Lower LLPAs from Fannie but Tighter Cash-Out Rules / Ocwen, Ocwen, Ocwen

And there could be some good news on lower LLPAs. Fannie said that come May 2015, it will change how it treats loans where there are two or more borrowers...


November 14, 2014 - Inside MBS & ABS

SEC Rule Ineffective Against Rating Shopping, CRAs Standing Firm on Rating Methodologies

Shopping for credit ratings is alive and well despite the laws and regulations that have been put in place to curb the practice, but so far credit rating agencies have not lowered their standards, according to Morningstar Credit Ratings. “Arrangers and issuers of structured debt continue to tightly control the selection of credit rating agencies,” Morningstar said in a recent analysis. But information quality and transparency fall short of investor expectations, and the general interests of the key stakeholders remain somewhat misaligned, the rating service said. Arrangers and issuers of residential MBS, non-mortgage ABS and commercial MBS continue...


November 14, 2014 - Inside MBS & ABS

SFIG Releases Second Round of Consensus Standards Aimed at Restoring Confidence in Non-Agency RMBS

As part of its RMBS 3.0 initiative, the Structured Finance Industry Group this week released the second installment of its recommended best practices for the non-agency MBS market. New and revised material was released for each of the three major “work streams” in the project, which broadly cover: representation-and-warranty issues and repurchases; due diligence, data and disclosure; and the roles of transaction parties and bondholder communications. The 54 new pages released this week bring the cumulative work to about 125 pages, including appendices. In the reps-and-warranties section, new provisions cover...


November 13, 2014 - IMFnews

Maybe Nationstar Will Buy the $39 Billion (and Shrinking) MSR Package From Wells Fargo

According to one advisor who saw the original bid package, the delinquency rate on the non-agency MSRs are north of 20 percent.


November 14, 2014 - IMFnews

Fannie Says MI Assessment Crucial to Revival of 97 Percent LTV Program

Sources said previous requirements for a standard 97 LTV product, which Fannie offered until November 2013, are being considered.


November 14, 2014 - IMFnews

Treasury’s Point Man on Mortgages: A ‘Benchmark’ Transaction Needed for RMBS Revival

Used in conjunction with the industry’s RMBS 3.0 project, such a mechanism could help clear away the rubble from the market’s collapse...


November 13, 2014 - Inside Mortgage Finance

Relaxing Re-disclosure Timing Requirement to Three Days Would Best Serve Consumers, Industry Says

One key point that much of the mortgage lending industry is contesting in the Consumer Financial Protection Bureau’s proposed amendments to its integrated disclosure final rule is the timing requirement for re-disclosing the loan estimate. The proposal would amend a final rule to integrate disclosures required by the Truth in Lending Act and the Real Estate Settlement Procedures Act that itself won’t be implemented until August 2015. The CFPB tried to make the so-called TRID more workable by giving lenders more time to revise loan estimate disclosures. Revisions based only on changes in rates would have to be made by the next business day after the rate locks, instead of on the same day, which is the current requirement. A number of lender representatives told...


November 13, 2014 - Inside Mortgage Finance

Wells Fargo Seeking Resolution of FHA Fraud Allegations, Experts Doubt DOJ Will be Less Aggressive Going Forward

Wells Fargo is in discussions with the Department of Justice about a possible resolution of alleged improper origination and servicing of FHA loans that resulted in huge paid claims and significant losses to the agency’s Mutual Mortgage Insurance Fund. The ongoing talks are related to a complaint filed by the government in federal district court in Manhattan on Oct. 9, 2012, alleging, among other things, that Wells Fargo improperly certified FHA mortgages between 2001 and 2010 for insurance even though it knew the underwriting was flawed. The complaint said that the bank’s insurance claims should not have been paid when some of the loans later defaulted. It further alleged that Wells Fargo did not disclose the loans’ deficiencies to the FHA before making insurance claims. On Dec. 1, 2012, Wells Fargo filed...


November 13, 2014 - Inside Mortgage Finance

Private MIs See Huge Gain in Market Share As FHA Continues to Fall Behind in 3Q14

Private mortgage insurers reported hefty increases in the volume of new insurance written during the third quarter of 2014, according to a new Inside Mortgage Finance ranking and analysis. The seven active private MIs wrote primary insurance coverage on $53.95 billion of new mortgage originations during the third quarter, a gain of 22.8 percent from the previous period. On a year-to-date basis, total new primary insurance by the MIs was still down 22.4 percent from the first nine months of last year, mostly because activity in the Home Affordable Refinance Program has declined sharply. HARP accounted...[Includes three data charts]


November 13, 2014 - IMFnews

Wells Fargo Seeks Settlement With DOJ Over FHA Allegations

Wells Fargo estimates that a settlement could cost the bank at least $950 million.


November 13, 2014 - IMFnews

Trade Groups Complain to Fed Chief Yellen About the Mortgage Damage Caused by Basel III

“Banks of all sizes are having problems with the new limits,” the three trade groups argue.


November 13, 2014 - IMFnews

SFIG Releases More Standards to Promote Non-Agency RMBS

The new documentation was released in conjunction with a non-agency RMBS reform symposium held in New York by SFIG and Information Management Network.


November 12, 2014 - IMFnews

Short Takes: Subprime Vet Jon Daurio Back in Biz? / Don’t Get Drunk on the Lawsky ‘News’ / Can the GOP ‘Fix’ the CFPB? / Nationstar Disappoints Some / Gateway Hires BB&T Mortgage Official

Will former Long Beach Mortgage executive Jon Daurio finally launch a new nonprime venture?


November 12, 2014 - IMFnews

Ocwen Affiliate Altisource Exits Force-Placed; Stock Gets Crushed

As IMFnews went to press, the share price of Altisource was getting slammed, down 20 percent on the day.


November 12, 2014 - IMFnews

CFPB on Servicer Exams: Compliance is Mixed

On the other hand, examiners cited violations based on policies and procedures reviewed at other servicers.


November 11, 2014 - IMFnews

Short Takes: HUD and DOJ Trouble for PrimeLending? / Such Legal Matters are Unpredictable / The Lawsky Effect: Nice Gain for Ocwen’s Stock / Good Riddance? / Thanks for the Stock, But…

Are investors in Ocwen jumping for joy now that word is out that NYDFS chief Benjamin Lawsky might be leaving next year?


November 11, 2014 - IMFnews

Lenders Express Deep Concerns About Additional Reporting Under HMDA

Lenders are fearful the HMDA proposal does not adequately ensure consumer privacy and that additional costs will be passed onto borrowers.


November 11, 2014 - IMFnews

NYDFS on the Lawsky ‘Leaving’ Rumors: He Loves His Job

Stock analysts have claimed that Lawsky has been aggressively investigating Ocwen so he can make headlines, paving the way for an eventual run for public office.


November 10, 2014 - Inside the CFPB

Worth Noting/The Week Ahead

Disparate Impact Theory of Legal Liability Struck Down. Last week, the U.S. District Court for the District of Columbia dealt a heavy blow to the position of the Department of Housing and Urban Development – as well as the CFPB – that disparate impact claims are cognizable under the Fair Housing Act. In American Insurance Association v. U.S. Department of Housing and Urban Development, the judge struck down HUD’s disparate impact rule, determining that the Fair Housing Act prohibits “disparate treatment only.” In promulgating its disparate impact rule, the court said HUD exceeded its authority under the Administrative Procedures Act. “The ruling is in line with what we have long believed the law to be and consistent with what we argued in ...


November 10, 2014 - Inside the CFPB

Castle & Cooke Mortgage Files For Dismissal in RESPA, TILA Dispute

Castle & Cooke Mortgage late last month filed a motion to dismiss a putative class-action brought by one of the aggrieved parties who had already been compensated under the terms of the settlement the lender reached late last year with the CFPB. In Luis Cabrales v. Castle & Cooke Mortgage LLC, plaintiff Luis Cabrales contends that the lender improperly compensated its loan officers by giving them bonuses for putting customers in more expensive loans than what they qualified for. The plaintiff sued for violation of the Truth in Lending Act – a claim that Castle & Cooke is not challenging at this point. However, Cabrales also brought other causes of action: violation of Section 8 of the Real Estate Settlement Practices ...


November 10, 2014 - Inside the CFPB

CFPB Asks Court to Permanently Bar Morgan Drexen from Debt Biz

Last month, the long-running dispute between the CFPB and Morgan Drexen, a debt settlement firm, took another turn – this time with the bureau filing a motion for summary judgment in which it seeks an injunction permanently barring the firm and its owner and CEO, Walter Ledda, from providing debt relief services in the future. The bureau also is pushing for $90.7 million from the defendants in restitution, as well as a civil money penalty in an unspecified amount. The CFPB said it brought this action to stop a nationwide debt settlement “scheme that preys on financially distressed consumers who are in debt.” Defendants Morgan Drexen and Ledda and the attorneys with whom they are affiliated promise consumers that they will ...


November 10, 2014 - Inside the CFPB

Sidestep Common Pitfalls to Avoid UDAAP Enforcement Actions

There are a host of legal land mines that mortgage lenders must avoid if they want to keep from becoming the target of a CFPB enforcement action under its unfair, deceptive or abusive acts or practices (UDAAP) authority, according to top legal experts. Andrea Mitchell, a partner with the BuckleySandler law firm, told attendees at an Inside Mortgage Finance webinar last week that there are a number of representations lenders should stay away from in their marketing pitches. “Say what you mean and mean what you say,” Mitchell said. She then rattled off a list of potentially problematic terms to avoid, such as “free” or “no cost,” “best rates available,” “fastest” or “faster than…,” “improve/repair your credit” or “eliminate your ...


November 10, 2014 - Inside the CFPB

CSBS Should Delay MCR Changes Pending CFPB Rules, Groups Say

Numerous mortgage banking trade groups from across the U.S. urged the Conference of State Bank Supervisors to hold off on making changes to the Nationwide Mortgage Licensing System mortgage call report (MCR) until after the CFPB’s Home Mortgage Disclosure Act rulemaking is final and the bureau’s integrated disclosures have been implemented. The MCR proposal, released Oct. 1, 2014, would expand the current data collected to create a new definition of “application,” and it would require reporting on the amount and count of closed loans classified as qualified mortgages under the CFPB’s ability-to-repay rule. Further, the proposal would require additional nationwide and state-specific servicing reporting, along with additional fields to capture changes in loan amount between the time of application and ...


November 10, 2014 - Inside the CFPB

Mortgage Complaints to CFPB Fall for Fifth Time in Six Quarters

Total mortgage-related complaints filed by borrowers with the CFPB dropped again in the third quarter of 2014, the fifth drop in the last six quarters, according to a new analysis by Inside the CFPB. Data contained in the CFPB’s consumer complaint database show that such consumer gripes fell 17.6 percent in the third quarter of the year, and were down 23.6 percent from the same period in 2013. Total mortgage complaints have been trending downward since they peaked at 15,239 in the first quarter of 2013. Third quarter 2014 grumblings came to 8,995. A closer inspection of the data reveals that consumer gripes about their home loans are down across the board [With two exclusive data charts] ...


November 10, 2014 - Inside the CFPB

CFPB Faces Major Management Challenges, Inspector General Says

The CFPB has a handful of significant managerial hurdles to overcome that threaten to hamper the bureau’s accomplishment of its strategic objectives, according to a new report from the agency’s Office of Inspector General. The first major challenge is improving the operational efficiency of its supervisory program for depository and non-depository institutions. The OIG started by saying the bureau has made significant progress towards developing and implementing its program in this regard. Still, more can be done. The OIG said the bureau’s management will focus on this as the agency works to “clear a considerable number of draft examination reports that have yet to be issued, improve its reporting timeliness, ensure the timely recording of data in its tracking system, ...


November 10, 2014 - Inside the CFPB

Empowered GOP Likely to Raise Pressure on CFPB Come January

The consensus among political observers is that last week’s big Republican wave on Election Day will result in a lot more political bluster from critics of the CFPB on Capitol Hill. However, it’s unlikely to have enough short-term intensity or long-term staying power to effect any big changes that could get past the veto pen of a strongly supportive President Barack Obama. “While there may be a push for the elimination of the CFPB, such a change is highly unlikely given the [Obama] administration’s support for the bureau,” the American Bankers Association said in a post-election analysis. “Expect increased scrutiny in the Senate on the CFPB’s proposals and a continued push to change the structure of the CFPB from a ...


November 10, 2014 - Inside the CFPB

Mortgage Servicer Compliance Mixed, Supervisory Report Shows

In the first half of 2014, CFPB examiners conducted targeted reviews for compliance with the bureau’s new mortgage servicing rules and found mixed results, according to the agency’s latest supervisory highlight report. For example, the new rules require servicers to maintain policies and procedures to achieve specific objectives in areas such as loss mitigation, servicing transfers and service provider oversight. “In reviewing this area, examiners found that the policies and procedures at several servicers appeared to be reasonably designed to meet the specific objectives laid out in the rule,” said the new report. For instance, some servicers’ policies and procedures clearly outlined the ways in which they access and provide timely and accurate information. “These policies and procedures included specific ...


November 10, 2014 - Inside the CFPB

Bureau IDs Unfair, Deceptive Student Loan Servicer Practices

CFPB examiners have identified a number of unfair or deceptive acts or practices on the part of an unspecified number of bank and nonbank servicers of federal and private student loans, according to the latest supervisory highlights report released recently by the bureau. One problematic practice involved “one or more supervised entities” allocating partial payments in a way that maximizes late fees. CFPB examiners have reviewed how servicers allocate payments when a borrower pays less than the total amount due on all of the loans in the borrower’s account, according to the report. “Examiners found that partial payments were being allocated proportionally ... among all the loans, resulting in all of the loans in a borrower’s account becoming delinquent,” said ...


November 10, 2014 - Inside the CFPB

Consumer Advocates Want CFPB To Demand More in HMDA Rule

Consumer advocacy groups say the CFPB isn’t going far enough to expand mortgage industry reporting requirements under the Home Mortgage Disclosure Act. The California Reinvestment Coalition and 41 other state organizations suggested a handful of changes to the proposal, each of which would likely add to the reporting burden for companies. Among the changes the California groups want is requiring loan modification data to be reported by banks and servicers, along with disaggregating the overly broad “Asian” race category to allow for more accurate reporting. They also would like to see the CFPB capture more information about languages spoken during a loan transaction, and have companies disclose if a borrower is going to own a property with somebody who is ...


November 10, 2014 - Inside the CFPB

Industry Wants Lighter HMDA Burden, Groups Tells CFPB

Now that the mortgage lending industry has had about three months to comb through the details of the CFPB’s proposed expansion of reporting requirements under the Home Mortgage Disclosure Act, it has found more cause to dislike it than upon first glance. “While we support the purpose of HMDA – to provide information on the availability of credit in the home mortgage market – we are concerned that the proposal to markedly increase HMDA data reporting and coverage goes beyond the law’s purposes in some areas and will unduly harm competition and increase costs in others,” a handful of leading industry groups told the bureau in a joint comment letter last week. “At the same time, we do not believe that the ...


November 10, 2014 - IMFnews

Short Takes: LoanDepot-Mortgage Master Deal? / RPM? / Loretta Lynch, Not Lynn / Ex-LIME Executives May Land / Indiana Wants Me

Mortgage M&A activity remains red hot. We understand that RPM Mortgage of California is working on another acquisition...


Poll

What is it going to take to convince lenders to loosen the credit box (i.e., remove underwriting overlays)?

The recent rep and warranty changes announced by the Federal Housing Finance Agency should go a long way in protecting lenders from future buybacks and help expand mortgage credit.
There won’t be any significant elimination of underwriting overlays until the government stops seeking huge mortgage-related penalties and settlements from lenders.
There shouldn’t be any expansion of the mortgage credit box since looser underwriting is what caused the recent mortgage crisis.

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