Regulations

Browse articles from all of our Newsletters related to Regulations.

January 29, 2015 - Inside Mortgage Finance

On a ‘Per Loan’ Basis, Bank Loan Officers Earn Less Than Nonbank LOs, But…

Not only have nonbank lenders steadily increased their production market share the past two years, but their loan officers, in general, earn more money on a per unit basis than their depository counterparts. At least that was the finding of several interviews conducted by Inside Mortgage Finance during January. “Banks are tiered 50 to 100 basis points [per loan] with qualifiers,” said Paul Hindman, managing director of business development for Grid Financial. “Nonbanks are tiered 75 to 175 basis points with qualifiers.” And LOs who work for net branch operators can earn...


January 29, 2015 - Inside Mortgage Finance

Basel Capital Requirements Unlikely to Prompt Big Banks to Sell Servicing, According to Moody’s

Sales of mortgage servicing rights by big banks will continue to be driven by the desire to reduce the handling of delinquent mortgages – not by Basel III capital requirements, according to analysts at Moody’s Investors Service. Nonbank servicers that have grown in recent years often cite Basel capital requirements as a significant factor in bank sales of MSRs. Warren Kornfeld, a senior vice president at Moody’s, noted that Bank of America, Citigroup and JPMorgan Chase were active sellers of MSRs in recent years. “We believe the sales were primarily motivated by their desire to reduce credit-impaired servicing volume,” he said. Under Basel III, banks face...


January 29, 2015 - Inside Mortgage Finance

Watt Defends GSEs’ Low Downpayment Offerings, Offers Few Clues on Where G-Fees Are Heading

The government-sponsored enterprises’ new low downpayment programs received a vigorous defense from Melvin Watt, the director of the Federal Housing Finance Agency, at a hearing this week by the House Financial Services Committee. Republicans on the committee attacked the programs from a number of angles, including raising concerns about default rates on mortgages with lower downpayments and fears of a “race to the bottom” with the FHA. “If you carefully look at other considerations and take them into account in deciding whether to back that credit, you can ensure...


January 29, 2015 - IMFnews

Short Takes: CFPB Seeks to Expand Credit in Certain Areas / Will Banks Reemerge as MSR Buyers? / What’s Going On With Stonegate? / Fannie Goes Downtown / A New General Counsel for Genworth

Stonegate Mortgage saw its share price fall to a new 52-week low of $9.76 Thursday morning on no major news.


January 28, 2015 - IMFnews

Short Takes: GSE Principal Reduction Rears Its Ugly Head Again / GOP Continues Close Scrutiny of the CFPB / Mr. Cordray, Stop Tearing Down Those Walls / IMA Selling Ginnie Servicing / S&P May Settle for $1.37 Billion

According to the IMA offering circular, the seller is a “Southwest, independent mortgage banking entity with strong financials and a highly experienced senior management team.”


January 28, 2015 - IMFnews

Friday Release of Seller/Servicer Eligibility Guidelines from FHFA Delayed?

It’s unclear what exactly will be addressed in these new standards, though capital requirements for nonbank servicers is said to be a key part of it.


January 28, 2015 - IMFnews

CFPB Tells Banks, Nonbanks to Maintain Confidentiality of Supervisory Info

In other words, the bureau is asserting the primacy of its regulatory authority over the legality of certain private contracts.


January 28, 2015 - IMFnews

FHFA Chief Defends Agency’s Work on the Common Securitization Platform

“The industry seems to be cut out of some of the development of the securitization platform,” said Rep. Scott Garrett, R-NJ...


January 27, 2015 - IMFnews

Short Takes: Rep. Hensarling Cites ‘Fables’ Told by the Left / Some Background on the Affordable Housing Trust Funds / Did the Government Violate the Law Regarding the GSE Conservatorships?

"Contrary to the fable told by the left, the root cause of the financial crisis was not deregulation but dumb regulation," said House Financial Services Committee chairman Jeb Hensarling, R-TX.


January 27, 2015 - IMFnews

FHFA Will Make G-Fee Announcement by the End of March

The FHFA is still evaluating input regarding g-fees and but Watt has no idea if they will be reduced, increased or kept at their current levels.


January 27, 2015 - IMFnews

Mortgage Complaints Drop Yet Again. What’s That All About?

Elsewhere, the latest figures from the CFPB show a big reduction in consumer belly-aching about loan modifications...


January 26, 2015 - Inside the CFPB

Worth Noting

Obama Vows Vetoes to Dodd-Frank Changes. President Barack Obama touted the Dodd-Frank Act during his recent State of the Union speech as well as the growth of the CFPB, and threatened a veto should the Republican-controlled Congress pass any additional fixes to Dodd-Frank. “Today, we have new tools to stop taxpayer-funded bailouts, and a new consumer watchdog to protect us from predatory lending and abusive credit card practices,” Obama said. “We can’t put the security of families at risk by taking away their health insurance, or unraveling the new rules on Wall Street, or refighting past battles on immigration when we’ve got a system to fix. And if a bill comes to my desk that tries to do any of ...


January 26, 2015 - Inside the CFPB

GOP, Industry Look to Clip CFPB Wings in New Congress, 2015

The reconstituted House Financial Services Committee recently adopted an oversight plan for the 114th Congress – and scrutiny of the CFPB remains part of the agenda of the Republican-controlled committee. “The committee will oversee the regulatory, supervisory, enforcement, and other activities of the CFPB, the effect of those activities on regulated entities and consumers, and the CFPB’s collaboration with other financial regulators,” said the plan document. “The committee will also examine the governance structure and funding mechanism of the CFPB.” When it comes to specific sectors of the financial services industry, the committee said it plans to closely review recent rulemakings by the CFPB and other agencies on a variety of mortgage-related issues. “The committee will monitor the coordination and implementation ...


January 26, 2015 - Inside the CFPB

Almost Half of Homebuyers Don’t Shop for Their Mortgages: CFPB

Nearly half of the people who buy a home do not shop for the mortgage they end up with, according to a new report from the CFPB. “When we say that almost half of consumers who take out a mortgage to buy a home fail to shop before applying for a mortgage, this means they seriously considered only a single lender or broker before making their decision,” CFPB Director Richard Cordray said. By contrast, most homebuyers put a lot of effort into weighing their differing housing needs. They generally consider the most basic questions about which house to buy, such as where they want to live, the proximity to good schools, and how many bedrooms or bathrooms they think they ...


January 26, 2015 - Inside the CFPB

CFPB Seeks Public Input on Safe Student Account Scorecard

As part of the growing attention the CFPB is paying these days to the marketing relationships between financial institutions and colleges and universities, the CFPB released for public comment a draft Safe Student Account Scorecard that offers information to institutions of higher learning when soliciting agreements from financial institutions to market safe and affordable financial accounts for their students. “The scorecard builds on prior work by the Federal Deposit Insurance Corp. and is designed to help colleges evaluate the costs and benefits to students of a financial product based on information about its features and how it is marketed,” said CFPB Director Richard Cordray. The bureau is seeking public input on the scorecard, which highlights four areas for schools to ...


January 26, 2015 - Inside the CFPB

Industry Calls for More Oversight Of CFPB Complaint Database

Representatives of the banking industry recently urged the CFPB’s Office of Inspector General to increase its scrutiny of the bureau’s customer complaint database. The OIG is currently auditing the bureau’s public database and performing a security review of the underlying database, but the American Bankers Association has some specific ideas about what the watchdog should be doing in this regard. One of the key considerations at issue, from the ABA’s point of view, is the effectiveness of the CFPB’s controls over the accuracy and completeness of the public complaint database. “[I]f the bureau lacks adequate controls to ensure the accuracy of complaint data, instead of fostering informed and responsible consumer choice, the bureau becomes an official purveyor of unsubstantiated, and ...


January 26, 2015 - Inside the CFPB

Complaints About Mortgage Applications, Originations Plummet

Even though mortgage-related complaints to the CFPB fell 14.5 percent year over year and 16.1 percent percent quarter to quarter, gripes about the mortgage loan application and origination process dropped even further, a new analysis by Inside the CFPB shows. Consumer criticisms about their loan apps and the overall origination process fell 22.8 percent from 2013 to 2014. The fourth quarter drop-off was even better, down 28.0 percent from the third quarter. While those performances are positive on the surface, they may be indicative of larger trouble elsewhere: in the case of the U.S. mortgage market, the fall in complaints about loan apps and originations is most likely largely due to the continued slow-down ... [with exclusive chart]...


January 26, 2015 - Inside the CFPB

Bureau Position Upheld as SCOTUS Sides With Borrower on Rescission

When it comes to legal cases at the Supreme Court of the United States, score one for the CFPB. Earlier this month, in Jesinoski v. Countrywide, the SCOTUS essentially upheld the bureau’s position on borrower rescission of a mortgage under the Truth in Lending Act. Specifically, the high court unanimously ruled that TILA only requires written notice to a mortgage lender within three years in lieu of requiring a borrower to formally file a lawsuit within that time span. Under TILA, a borrower may rescind a mortgage within the first three days of consummation of the transaction or the delivery of the mandated disclosures required. However, if a lender fails to make the disclosures demanded under TILA, this right is ...


January 26, 2015 - Inside the CFPB

CFPB Enforcement Tool Hangs in Balance as SCOTUS Hears Case

The legal doctrine of disparate impact is a powerful arrow in the enforcement quiver the CFPB can bring to bear across a number of sectors in the broad financial services industry – and it may get a big boost if the Supreme Court of the United States says it is legal. Last week, the SCOTUS heard oral arguments in Texas Department of Housing and Community Affairs, Et Al., v. The Inclusive Communities Project Inc. (No. 13-1371). The crux of this case is whether disparate impact claims are cognizable under the Fair Housing Act of 1968, where a plaintiff alleges discrimination based on the disparate impact that a defendant’s “facially neutral” practice has on members of a demographic group of society, the ...


January 26, 2015 - Inside the CFPB

Bureau Tries to Calm PR Storm Over Online Interest-Rate Checker Tool

The CFPB stirred up a hornet’s nest of industry anger and opposition earlier this month when it released an unfinished version of an interest-rate checker, part of a suite of new online tools dubbed “Owning a Home” to help homebuyers better shop around for a mortgage. “One critical feature contained in Owning a Home is the Rate Checker, a tool currently in beta release that helps consumers understand what interest rates may be available to them,” said bureau Director Richard Cordray. “It incorporates information from lenders’ internal rate sheets, information they use to calculate what interest rate is available for a particular consumer. In other words, we are giving consumers direct access to the same type of information that the ...


January 26, 2015 - Inside the CFPB

Wells, JPMorgan Settle With CFPB Over Mortgage Kickback Claims

Wells Fargo and JPMorgan Chase settled with the CFPB and the Maryland Attorney General last week, resolving allegations of participating in an illegal marketing kickback scheme with Genuine Title, a title company that has since gone out of business. The government agencies alleged that Genuine Title gave the banks’ loan officers cash, marketing materials and consumer information in exchange for business referrals. The CFPB and the Maryland AG also took action against former Wells Fargo employee Todd Cohen and his wife, Elaine Oliphant Cohen, both of Baltimore, for their alleged involvement. The two government agencies are seeking $24 million in civil penalties from Wells Fargo and $600,000 in civil penalties from JPMorgan Chase. They also want $10.8 million from Wells ...


January 26, 2015 - IMFnews

Short Takes: Titan Says: Give Us Your Rejects / Ocwen Rising / UWM Rolls Out LOS Platform / DocMagic Keeps Software Developers Happy / Leon Loves Altisource?

Thanks to its settlement with California regulators, Ocwen's share price is on the rise. But for how long?


January 26, 2015 - IMFnews

FHA Warns of Processing Delays Due to Upsurge in Case Number Assignments

FHA told lenders that if a new case number is replacing an old one, the old case cancellation must have been completed before the system will allow for a new one.


January 26, 2015 - IMFnews

Ocwen Fights Back, Blasts Latest Claims from Non-Agency MBS Investors as ‘Baseless’

Ocwen denied that there is any basis for a default under the trust agreements...


January 26, 2015 - IMFnews

Ginnie Mae Ready to Launch Issuer Scorecard

Final testing and training for IOPP began this winter, with deployment expected “in early 2015,” Ginnie Mae said.


January 23, 2015 - IMFnews

Ocwen Settles With California DBO, Will Pay $2.5 Million; Stock Soars After Hours

As part of the settlement, the DBO will drop its effort to suspend Ocwen’s license in the state.


January 23, 2015 - Inside FHA Lending

Around the Industry

Ginnie Mae Allows Rate-Change Dates in HMBS Annual ARM Pools. Ginnie Mae has decided to permit annual adjustable-rate Home Equity Conversion Mortgage pools to contain participations with different interest-rate adjustment dates. The participations in a pool must have the same adjustment date as the individual HECM loans to which they are related and an interest rate that adjusts on annual basis. In addition, participations must have a rate adjustment that will take place within 12 months following the month of pool issuance. This policy change is effective with Jan. 1, 2015, issuances and, thereafter, for both Constant Maturity Treasury and LIBOR index-based loan pools. Rescission Dates for Electronic Signatures/VA Guaranteed Home Loans, SCRA Requirements Extended. The Department of Veterans Affairs has extended the rescission date for ...


January 23, 2015 - Inside FHA Lending

Streamlined FHA Refinances Increase in 3Q14

Streamlined FHA refinance volume increased slightly in the third quarter of 2014 as incentives put in place in 2013 continued to attract FHA borrowers, according to an Inside FHA Lending analysis of agency information. Streamlined refi production rose 2.4 percent in the third quarter of last year, closing a nine-month period with $14.2 billion in new loans. A comparison of nine-month FHA-to-FHA refinance activity, however, shows volume falling a hefty 79.6 percent year over year. As of Sept. 30, 2014, streamlined refinances accounted for 14.3 percent of total FHA originations. The FHA announced a revised streamlined refi program in December 2013 to help FHA borrowers with underwater mortgages to refinance without added cost or penalty. The loan does not require an appraisal or verification of job, income or credit. A perfect, three-month payment history is required and ... [ 1 chart ]


January 23, 2015 - Inside FHA Lending

GNMA to Launch Issuer Scorecard in the Spring

Ginnie Mae will soon introduce the third prong of a strategy to improve its oversight of participants in its mortgage-backed securities program – a performance scorecard for issuers – and monitoring of its risk. Essentially a “scorecard,” the Issuer Operational Performance Profile (IOPP) will enable issuers to better understand and comply with Ginnie Mae’s expectations. It also provides a way for issuers to measure and improve their performance and compare it to the performance of their peers. Final testing and training for IOPP began this winter, with deployment expected “in early 2015,” the agency said. Issuers will be scored monthly based on a series of metrics. Each issuer will be rated against its peers by applying a weighting algorithm and, in some cases, adjusting for certain control factors. Each issuer will receive two scores: one for operational management and ...


January 23, 2015 - Inside FHA Lending

HUD Clarifies Protections for HECM Spouses

The Department of Housing and Urban Development has made further clarifications to policy guidance related to the treatment of eligible and ineligible non-borrowing spouses of deceased Home Equity Conversion Mortgage borrowers. According to Mortgagee Letter 2015-02, FHA lenders must identify at application any current non-borrowing spouses and must determine whether they are eligible for protection against “due and payable” requirements that kick in upon the death of the HECM borrower. This protection is a provision in the HECM document requiring that full payment of the entire mortgage be deferred for as long as a non-borrowing spouse continues to meet all the requirements of the provision. Specifically, the eligible, non-borrowing spouse must establish, within 90 days from the death of the HECM borrower, legal ownership or other ongoing legal right to ...


January 23, 2015 - Inside FHA Lending

FHA Tweaks Rules for Doing Business with Agency

The FHA has proposed key changes to rules for 203(k) consultants, direct endorsement (DE) underwriters and nonprofit groups that do business with the agency. The changes are part of a draft section, “Doing Business with FHA – Other Participants,” which will be incorporated into the overall Single Family Policy handbook. The draft contains information regarding eligibility, approval and recertification requirements for 203(k) program consultants, direct endorsement (DE) underwriters and nonprofit groups. The FHA posted the draft versions of “Doing Business with FHA – Other Participants in FHA Transactions” and “Quality Control, Oversight and Compliance – Other Participants in FHA Transactions” on its SF Housing Policy Drafting Table for public review and comment. The draft consolidate various existing Department of Housing and Urban Development handbooks, mortgagee letters, housing notices and ...


January 23, 2015 - Inside FHA Lending

Low Rates, High Demand Power VA’s 3Q14 Surge

Production of loans with a VA guaranty was moderately strong in the third quarter of 2014, thanks to lower rates and increased demand for the no-downpayment loans, according to Inside FHA Lending’s analysis of the latest agency data. A 14.1 percent quarter-to-quarter surge helped the industry end last year’s first nine months with a total of $76.3 billion in VA loans, mostly purchase home mortgages taken out by a younger generation of war veterans. VA streamline refinancing also accounted for a substantial chunk of originations, 19.2 percent. Volume jumped from $19.5 billion in the first quarter of 2014 to $26.5 billion the following quarter. Lenders closed out the third quarter with $30.2 billion. Stanley Middleman, chief executive officer of Freedom Mortgage, said VA lending is on the upswing, driven by low interest rates. He thinks the VA home loan guaranty program has been ... [ 1 chart ]


January 23, 2015 - Inside FHA Lending

FHA Likely to Reclaim Share with Premium Cut

The half-percent annual premium reduction the FHA announced recently will likely enable the agency to reclaim the high loan-to-value segment of the mortgage market from Fannie Mae and Freddie Mac, according to analysts. Speaking with some originators that have been looking at the best way to securitize high LTV loans, Deustche Bank securities analysts said the lower FHA annual premium would put pressure on the government-sponsored enterprises to lower the cost of their guarantees. “The grapevine has anticipated for months that [g-fees] have little chance of going up and more chance of going down,” the analysts said. “But the specific risk triggered by the FHA move is that the cost of credit will now drop for high-LTV conventional borrowers.” Even before the FHA policy shift, private mortgage insurers have been pressuring the Federal Housing Finance Agency to ...


January 23, 2015 - Inside FHA Lending

Lenders Expect Modest Refinance Wave

FHA lenders are gearing up to meet an anticipated increase in demand for purchase and refinance loans with mortgage rates falling to near-historic lows coupled by a 50 basis point cut in FHA’s annual insurance premium. Lenders hope the combination of lower mortgage rates and the revised FHA pricing structure will create sufficient incentive for more borrowers to purchase a home or refinance an existing mortgage. For example, Freedom Mortgage, 32nd in Inside FHA Lending’s 2014 ranking of FHA lenders, is looking to hire as many as 500 new employees to handle the anticipated surge following the FHA action. Stanley Middleman, chief executive officer of Freedom Mortgage, expects a robust FHA refinance market during the first half of 2015, tapering off in the second half. “Lower rates, coupled with premium reduction, put a lot of FHA borrowers in a position to get their ...


January 23, 2015 - IMFnews

What We’re Hearing: Ocwen’s New Headache: BlueMountain / But Will it Work? / The Nationstar MSR Mystery / Yes, Loan Applications are Booming / Whatever Happened to Jon Daurio’s Capital Raise?

Just because a notice of default is signaled, that doesn’t mean the trustee has to yank the servicing away from Ocwen.


January 23, 2015 - Inside MBS & ABS

FDIC Proposes Clarification on Interplay Between Risk Retention and Securitization Safe Harbor

The Federal Deposit Insurance Corp. took an action this week aimed at reducing confusion regarding the interplay between the banking regulator’s securitization safe harbor and risk-retention requirements recently set by federal regulators. Under the FDIC’s securitization safe harbor, if certain requirements are met, the FDIC, in its capacity as receiver or conservator of an insured depository institution, won’t recover or reclaim securitized assets when exercising its authority to repudiate contracts. In 2010, the FDIC added a risk-retention requirement to the safe harbor. For securitized assets to qualify for the FDIC’s safe harbor, sponsors of deals issued in 2011 and beyond must retain...


January 23, 2015 - Inside MBS & ABS

S&P Settles Certain MBS Rating Issues, But Regulators Hint More Actions Are Pending

Standard & Poor’s agreed this week to a settlement with the Securities and Exchange Commission and two state attorneys general regarding ratings on commercial MBS and non-agency MBS. Regulators suggest that further actions involving the ratings services are in the works, likely including a much larger settlement with S&P regarding activity before the financial crisis. S&P’s settlement this week involved post-2010 activity. The rating service agreed to pay the SEC and attorneys general for New York and Massachusetts more than $77 million. S&P will also take a one-year “timeout” from rating conduit/fusion commercial MBS. “They lied...


January 23, 2015 - IMFnews

Wells Fargo, JPM Will Settle Kickback Allegations with CFPB

The CFPB and the Maryland AG also took action against former Wells Fargo employee Todd Cohen and his wife, Elaine Oliphant Cohen, for their alleged involvement.


January 23, 2015 - IMFnews

CFPB Defends ‘Rate-Checker’ Product as Fallout Continues

MBA's Dave Stevens did not mince words, calling the CFPB product "the most misleading and inaccurate tool that will do anything but help prospective homebuyers.”


January 22, 2015 - IMFnews

Short Takes: JPM Sold Servicing to Nationstar? / IMA Will Still Sell Distressed Product / Ocwen Quietly Peddling Servicing? / Head of Retail at Guaranteed Rate Walks / $7MM to Get Deals Rated? / FHA Update

Thomas Gamache, national director of retail sales for Guaranteed Rate, has left the company and accepted a position with Citizens Financial Group...


January 22, 2015 - Inside Mortgage Finance

SCOTUS Hears Oral Arguments in Disparate-Impact Case; Scalia’s Comments Suggest He May ‘Go Rogue’

Trying to handicap a forthcoming ruling from the highest court in the land is notoriously fraught with difficulty and unpredictability, given that the justices of the U.S. Supreme Court have a penchant for playing devil’s advocate on both sides of a legal issue. But comments made this week by one of the conservative justices, Antonin Scalia, during the high court’s consideration of the latest disparate-impact case to reach it made it clear he believes the legal doctrine of disparate impact is a part of the contemporary legal landscape. And that could prove to be pivotal to the ultimate outcome. The central legal question in Texas Department of Housing and Community Affairs, et al., v. The Inclusive Communities Project Inc. (No. 13-1371) is whether disparate-impact claims are cognizable under the Fair Housing Act of 1968. The state of Texas is challenging...


January 22, 2015 - IMFnews

Supreme Court Justice Scalia May ‘Go Rogue’ in Disparate-Impact Case

Compass Point Research told clients that the case not only directly affects mortgage originators, but has implications for other lending sectors as well.


January 21, 2015 - IMFnews

Short Takes: Leon Cooperman Feels the Altisource Pain / CFPB Mum on Fixing Lender-Paid Comp / Former S&P Chief Under Fire

Regarding Altisource, the phrase “catch a falling knife” comes to mind. Cooperman is the Chairman and CEO of Omega Advisors…


January 21, 2015 - IMFnews

S&P Settles Charges Regarding Ratings for Commercial MBS, Non-Agency MBS

In settling, S&P did not admit or deny any of the allegations levied against the firm.


January 21, 2015 - IMFnews

CFPB Cements Two Small Changes to the TRID

After hearing from the industry, the CFPB determined that the short turnaround could pose challenges for lenders that allow consumers to lock rates late in the day or after business hours.


January 20, 2015 - IMFnews

Short Takes: No Minimum FICOs for this FHA Lender / More Mortgage Gifts from President Obama? / Warehouse Mentioned in Earnings from Republic / DocMagic Expecting a Busy Year / Altisource Adds Vella

Assisting DocMagic with its work on RESPA-TILA disclosures is Richard Horn, a former senior advisor at the Consumer Financial Protection Bureau...


January 20, 2015 - IMFnews

After Stepping Down, Ocwen Founder Erbey Set to Reap at Least $1.2 Million in Cash

The separation agreement prohibits the mortgage industry veteran from competing with Ocwen for at least 24 months.


January 20, 2015 - IMFnews

FHFA PMIER Rule Could be Accompanied by LLPA Announcement

“It’s hard to believe the FHFA will release the PMIER rules without doing something on LLPAs,” said one official.


January 20, 2015 - IMFnews

Fannie Mae’s New Appraisal Product Causing Anxiety

Fannie's "Collateral Underwriter" will provide up to 20 comparables and appraisers will have to defend the comps they use...


January 20, 2015 - IMFnews

Citing FHA Premium Cut, Freedom Mortgage May Hire 500

The 50 basis point cut in FHA premiums is spurring some firms, including Freedom Mortgage, to increase hiring.


Poll

The FHA is cutting its annual premium by 50 basis points. How much of a difference will this cut make in your FHA business?

Not much at all—maybe 10 percent at best.
Modestly. We expect a 10 percent to 25 percent gain in applications.
This is a real game changer, 25 percent or better.
Hard to say. This cut may just steal business away from the new Fannie/Freddie 97 LTV effort.

vote to see results
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