Regulations

Browse articles from all of our Newsletters related to Regulations.

August 27, 2014 - IMFnews

Flagstar in Talks with CFPB Over Alleged Loss Mitigation Violations, Default Servicing

Flagstar, which owns roughly $69 billion in mortgage servicing rights, said it has already provided the CFPB with documents and “other information.”


August 27, 2014 - IMFnews

SEC Rule Mandates 3-Day Waiting Period for Non-Agency MBS Issuance

However, non-agency MBS issuers won a slight concession on the matter: the SEC had initially proposed a five-day waiting period.


August 27, 2014 - IMFnews

Moody’s, Urban Institute Want Changes to FHFA’s MI Eligibility Rules

In early July, the FHFA unveiled the new MI eligibility standards, which propose – for the first time – risk-based capital rules that are tied to a measurement called “available assets.”


August 27, 2014 - IMFnews

CFPB Answers Industry Questions on RESPA/TILA Disclosures

Some lenders asked the CFPB if creditors are required to provide revised loan estimates on the same business day that a consumer or LO requests a rate lock.


August 26, 2014 - IMFnews

Short Takes: Will the FHFA Extend the Comment Period for MI Firms? / Some Consumers Believe HARP is a Scam / Freddie (and Fannie) Got Taken by a Wolf / Bill Erbey (Indirectly) Owns a Much Larger Stake in Altisource

Indirectly, Bill Erbey controls about 5.9 million shares of Altisource through a limited liability company called Salt Pond Holdings.


August 26, 2014 - IMFnews

FHFA IG Places Blame for TBW Scandal on Regulators, Counterparties, Investors

The FHFA IG claims a Fannie Mae executive back in 2000 discovered that TBW had pledged the same collateral – mortgages – to both Fannie and another company. But then Fannie took no action until two years later.


August 26, 2014 - IMFnews

Citibank to Refund Millions in Force-Placed Insurance Class Action

The Casey lawsuit also alleged that Citibank increased the amount of force-placed flood insurance required for some borrowers in excess of their unpaid principal balance.


August 26, 2014 - IMFnews

Earthquakes, Hurricanes Not Much of a Risk for Investors in Non-Agency MBS

Barclays said few loans in vintage non-agency MBS were exposed to the recent earthquake.


August 25, 2014 - IMFnews

In Settling with the FHFA, Goldman Will Buyback PLS for $3.15 Billion

According to the Inside Mortgage Finance MBS Database, the original unpaid principal balance of the PLS deals in question was almost $40 billion.


August 25, 2014 - IMFnews

SEC Set to Vote on Non-Agency MBS Rules Requiring Increased Disclosure and Credit Ratings

The Securities and Exchange Commission proposed controversial changes that would place greater burdens on MBS issuers and potentially increase privacy concerns for borrowers.


August 25, 2014 - IMFnews

Most of the Mortgage Industry Does Not Want a G-Fee Hike

SIFMA said the FHFA should view g-fees not as “static amounts,” but rather as compensation for credit enhancements that may vary from time to time.


August 22, 2014 - Inside The GSEs

Enterprise Endnotes

Fannie, Freddie Subprime Holdings Continue to Run Off. The GSEs’ holdings of nonprime mortgages continue to decline, largely due to runoff, according to a new analysis by Inside Nonconforming Markets, an affiliated publication. Fannie Mae and Freddie Mac held a combined $252.2 billion of Alt A and subprime mortgage assets at the end of the second quarter, down 18.3 percent from 2Q13. Purchased/guaranteed mortgages account for 71.9 percent of the holdings, with the rest of the GSEs’ nonprime exposure in non-agency mortgage-backed securities.


August 22, 2014 - Inside The GSEs

IG Dings FHFA for Lax Oversight of Fannie Short Sales Closed at Loss

Delegated servicers hired by Fannie Mae failed on numerous occasions to close short sales at the authorized price, according to a new audit from the Inspector General of the Federal Housing Finance Agency. The IG also found that a Fannie Mae remediation plan does not hold servicers fully accountable for the resulting losses. Issued late last week, the IG audit focused on the effectiveness of the FHFA’s oversight and Fannie’s controls over delegated servicers to ensure that net proceeds for short sales met the authorized reserve established by Fannie. The IG found that both the GSE and its regulator came up short.


August 22, 2014 - Inside The GSEs

FHFA’s Proposed G-fee Increase Enjoys Little Industry Support

As the Federal Housing Finance Agency mulls over a proposed increase in fees charged by the GSEs to provide guarantees on mortgage-backed securities, so far those advocating for a g-fee hike remain in the minority. The Securities Industry and Financial Markets isn’t flatly opposed to an increase in g-fees under certain conditions but policy makers should “consider the broader context” in which the guaranty fee will be raised.


August 22, 2014 - Inside The GSEs

GSE Shareholder Group Calls on FHFA to End Conservatorship

The head of a group of disenfranchised Fannie Mae and Freddie Mac investors has called on Federal Housing Finance Agency Director Mel Watt to end conservatorship of the two GSEs and undo what stakeholders consider the illegal government “net worth sweep” of Fannie and Freddie profits. Tim Pagliara, executive director of Investors Unite, followed Watt to Atlanta to seek a meeting with and to put pressure on the director to acknowledge the concerns of GSE shareholders.


August 22, 2014 - IMFnews

What We’re Hearing: Banks to FDIC: Drop Dead / FHA and Ginnie Get a Chunk of the Massive BofA Settlement / Should DOJ Sue a Dead Subprime Executive? / LO Profession in Bifurcation Mode / The Pain Caused by Ocwen / DocMagic Gets CFPB Contract

A fair question to ask is this: If DOJ goes after Mozilo, why not go after the owners of Ameriquest/Argent which created so much of the faulty subprime product that Greenwich securitized?


August 22, 2014 - IMFnews

Realtors Prefer ‘Local’ Mortgage Lenders Over Call Centers

Another concern was that out-of-state call center lenders might not know the local lending laws, which can result in delayed closings.


August 22, 2014 - IMFnews

Reverse Mortgages Reportable Under HMDA If CFPB Gets Its Way

Currently, residential lenders only have to report information on a closed-end reverse mortgage if the transaction involves a home purchase, home improvement or refinancing.


August 22, 2014 - IMFnews

CFPB Mortgage Rules Having More Impact on Jumbo, Nontraditional

Among the banks reporting that the rules had no effect on their approval rates, half indicated that lending policies would have been tighter without the safe harbor for mortgages that pass the GSEs’ automated underwriting models.


August 21, 2014 - IMFnews

Short Takes: Manny Friedman Bullish on PennyMac / The Ocwen Mystery: Why All the Spinoffs? / Reverse Loan Officers Clean Up / CTM Has a New Parent / LenderLive Names New Servicing Executive

The average loan officer makes a $4,000 commission on each reach reverse mortgage they originate. Really?


August 21, 2014 - IMFnews

BofA Inks Record $16.65 Billion Global MBS Negligence Settlement

In its statement announcing the settlement, BofA stressed, “The claims relate primarily to conduct that occurred at Countrywide and Merrill Lynch prior to Bank of America's acquisition of those entities.”


August 21, 2014 - IMFnews

Final Tally: Banks Posted Solid Gains in Mortgage Income During 2Q

The second-quarter rebound in mortgage profits was linked to an increase in new lending and loan sales.


August 20, 2014 - IMFnews

Short Takes: Former Subprime CEO Continues On / Privlo Definitely Did Not Raise $350 Million / Comerica Seeks Warehouse Manager for LA / More Regulations Coming from the CFPB? / A Sea Change in Fannie Underwriting Guidelines?

A big deal or ho-hum: Fannie Mae in late July said it will allow for shorter waiting periods involving mortgage debt charge-off accounts and mortgage debt that is discharged through a bankruptcy.


August 20, 2014 - IMFnews

More Regulatory Scrutiny Tied to Mortgage Servicing Transfers (Sales)

An agency spokesman told IMFnews that as a “general matter” the CFPB considers transfers significant if they involve at least 5,000 loans.


August 20, 2014 - IMFnews

GSE Shareholder Group Gets Face Time with FHFA’s Watt, But…

Investors Unite now boasts almost 1,000 members, which include both common and preferred stakeholders in Fannie Mae and Freddie Mac.


August 20, 2014 - IMFnews

Compliance Vendor Warns CFPB’s HMDA Proposal Could be the Death Knell for Mortgage Lending

“I’m wondering how many people buy homes outside of buying them with cash,” Ryan said during the webinar. “To me it’s that serious.”


August 19, 2014 - IMFnews

SEC Subpoenas Ocwen Regarding Business with Related Companies

Ocwen received a subpoena from the Securities and Exchange Commission and another subpoena from the SEC appears to be on the way.


August 18, 2014 - Inside the CFPB

Worth Noting/Comments Due This Week/Vendor Update

CFPB Making Its Presence Felt Among Fannie Mae and Freddie Mac Servicers. Fannie Mae’s latest earning filing indicates the CFPB and/or the New York State Department of Financial Services have been reviewing the activities of Fannie Mae’s three largest non-depository servicers (which would be Nationstar, Ocwen and possibly Quicken Loans, according to the latest ranking by Inside Mortgage Finance, an affiliated publication). The scrutiny of Quicken Loans seems to be a new development. The bureau would not comment. Meanwhile, during the first half of 2014, Freddie Mac said in its second quarter earnings announcement that it implemented requirements for its seller/ servicers in response to some final rules from the CFPB, including rules concerning the requirements for borrowers’ ability to ...


August 18, 2014 - Inside the CFPB

OIG Reviewing CFPB Coordination With Joint Supervisory Activities

The Office of Inspector General for the CFPB, the Federal Deposit Insurance Corp., the National Credit Union Administration, and the Treasury Department are evaluating the coordination between the CFPB and other regulatory agencies in conducting supervisory activities, according to the CFPB OIG’s latest work plan. In June 2012, the CFPB and the prudential regulatory agencies issued a memorandum of understanding to clarify how the agencies will coordinate their supervisory activities. “The objective of the evaluation is to confirm that the required coordination is occurring and has been effective in avoiding conflicts or duplication of efforts,” the bureau’s OIG said. The evaluation is currently expected to be completed sometime during the third quarter of 2014. There are a handful of other ...


August 18, 2014 - Inside the CFPB

CFPB Warns Consumers About Virtual Currencies Like Bitcoin

Last week, the CFPB warned consumers about the potential risks associated with “virtual” currencies such as Bitcoin, and indicated it is now accepting consumer complaints about such products and services. Potential issues with virtual currencies identified by the bureau include unclear costs, volatile exchange rates, the threat of hacking and scams, and the possibility that companies may not offer help or refunds for lost or stolen funds. “Virtual currencies may have potential benefits, but consumers need to be cautious and they need to be asking the right questions,” said CFPB Director Richard Cordray. “Virtual currencies are not backed by any government or central bank, and at this point consumers are stepping into the Wild West when they engage in the ...


August 18, 2014 - Inside the CFPB

Rulemaking More Likely After Critical Report on Overdraft Fees

Industry insiders think it’s more likely the CFPB will promulgate a final rule on bank overdraft protection after the bureau released a report that found small debit card purchases often lead to expensive overdraft charges. The study found that the majority of debit card overdraft fees are incurred on transactions of $24 or less and that the majority of such overdrafts are repaid within three days. Put in lending terms, if a consumer borrowed $24 for three days and paid the median overdraft fee of $34, such a loan would carry a 17,000 percent annual percentage rate, according to the CFPB. The report “shows that consumers who opt in to overdraft coverage put themselves at serious risk when they use ...


August 18, 2014 - Inside the CFPB

CFPB is Pressing Banks to Disclose Campus Marketing Agreements

CFPB Student Loan Ombudsman Rohit Chopra is raising the headline risk for banks that fail to be transparent about the campus financial product marketing agreements they have with colleges and universities. In a recent blog post alerting colleges and students about “secret banking contracts,” Chopra indicated the bureau has been mailing out letters to such educational institutions “to make sure they know that their bank partner has not yet committed to transparency when it comes to student financial products” because the financial institution has not yet posted its marketing agreement with the school on its website. Last year, the CFPB launched an inquiry into financial products marketed to college and university students to determine whether the market is working for...


August 18, 2014 - Inside the CFPB

Incorrect Info Leads the Way in Complaints About Credit Reports

Inaccurate information stands head, neck and torso above any other complaints consumers have about credit reporting, a new analysis of CFPB data by Inside the CFPB finds. Of the big three credit reporting firms – Experian, Equifax and TransUnion – gripes about incorrect data represented 68.7 percent of their combined total of 28,698 submissions. (See chart on following page.) Experian had the highest total of consumer criticisms about inaccurate information, followed by Equifax. But of the three, TransUnion had the largest percentage, 72.2 percent. This category of complaints included sub-issues such as account status, account terms, “information is not mine,” personal information, public record, and “reinserted previously deleted information.” The second largest credit report gripe had to do with “investigation procedure.” This ...


August 18, 2014 - Inside the CFPB

CFPB Rule Impeding Return of Private Capital to Housing Finance

A number of mortgage finance industry groups have expressed concern about how the CFPB’s ability-to-repay rule is interfering with the return of private investor capital back into the sector – mostly because of the rule’s assignee liability provisions. The industry comments came in response to a request from the Treasury Department in June for suggestions to encourage private capital to return to the non-agency mortgage-backed securities space. The Association of Institutional Investors said the ATR rule’s assignee liability provision “unfairly punishes investors who have nothing to do with the origination of loans and oftentimes have limited insight into the origination practices.” The assignee liability provision therefore introduces a risk that is almost impossible to price for those not directly involved in ...


August 18, 2014 - Inside the CFPB

Most Lenders Expect Increased Costs as a Result of QM Rules

Nearly three-fourths (74 percent) of senior mortgage executives surveyed by Fannie Mae’s Economic and Strategic Research Group in June indicated that they expect operational costs to increase as a result of the CFPB’s ability-to-repay/qualified mortgage rule. Most lenders (80 percent) said they “do not plan to pursue non-QM loans” or prefer to “wait and see”. “Larger lenders are more likely to pursue non-QM loans to increase their market share,” Fannie said. Also, most firms (84 percent) reported that they expect at least 90 percent of their single-family mortgage origination dollar volume to still be considered qualified mortgages. Further, “Lenders, on net, expect to tighten credit standards as a result of QM rules,” according to the government-sponsored enterprise, with 36 percent ...


August 18, 2014 - Inside the CFPB

CFPB Mortgage Rule Having More Effect on Jumbo, Nontraditional

The Federal Reserve’s latest senior loan officer survey found the CFPB’s ability-to-repay/qualified mortgage rule is not having much of an effect on the conforming mortgage market but is being felt in the jumbo and nontraditional spaces. The July survey included a set of three special questions on the effects on the approval rates for home-purchase loans of the ATR and QM standards under the Truth in Lending Act, which came into effect early this year. The first question asks respondents to indicate the extent to which the ATR/QM rule is affecting the likelihood of their banks approving applications from individuals for mortgage loans to purchase homes for each of four categories of residential real estate loans. [includes one exclusive data chart] ...


August 18, 2014 - Inside the CFPB

CFPB Tags Finance Company For Alleged Scam of Military Personnel

The CFPB late last week said it shut down what it called a service member fee scam allegedly run by USA Discounters, Ltd., a consumer finance company that operates a chain of retail stores, most of which are near military bases, and offers in-store and online financing for purchases. USA Discounters tricked thousands of American military personnel into paying fees for legal protections they already had under the Servicemembers Civil Relief Act, and for certain services that the company failed to provide, the bureau alleged. The CFPB said it obtained more than $350,000 in refunds for military personnel harmed by the practices in question, and the company will pay an additional $50,000 civil penalty. The company cannot deduct the penalty ...


August 18, 2014 - Inside the CFPB

CFPB Orders Amerisave to Pony Up $19.3 Million Over Alleged Scheme

In its first case regarding deceptive mortgage advertising, the CFPB has ordered Atlanta-based Amerisave Mortgage Corp., an online mortgage lender, and its affiliate, Novo Appraisal Management Co., to pay $19.3 million in damages and a fine. The consent order settles charges the firms engaged in a deceptive bait-and-switch mortgage-lending scheme said to have harmed tens of thousands of consumers. Of the total payout, $14.8 million will be in the form of refunds to harmed consumers. The companies also agreed to pay a $4.5 million fine. Patrick Markert, the owner of both companies, as an individual, will pay an additional $1.5 million penalty. According to the CFPB, between mid-2011 and 2014, Amerisave advertised its interest rates and terms using online banner ...


August 15, 2014 - Inside FHA Lending

Reverse Mortgages Reportable Under HMDA

Reverse mortgages would be included in Home Mortgage Disclosure Act reports under a proposed rule published recently by the Consumer Financial Protection Bureau. The proposed rule would expand the definition of a “covered loan” under HMDA to include reverse mortgages and home-equity lines of credit (HELOCs), which include reverse mortgages structured as open-end HELOCs. Currently, HMDA regulations do not require reporting of HELOCs, although lenders may do so if they choose. Currently, financial institutions only have to report information on a closed-end reverse mortgage if the transaction involves a home purchase, home improvement or refinancing. Among other things, the CFPB has proposed to require that all reverse mortgages and HELOCs be identified by loan type to distinguish them from other categories of ...


August 15, 2014 - Inside FHA Lending

GNMA’s Conversion Plan: Devil is in the Details

Two industry trade groups expressed support for consolidating Ginnie Mae’s mortgage-backed securities program and creating a new MBS but they are at loggerheads on some of the details. Commenting on the Ginnie Mae proposal, the Securities Industry and Financial Markets Association (SIFMA) and the Mortgage Bankers Association (MBA) said the disagreements are mostly on how to resolve issues related to winding down the Ginnie Mae I MBS program and providing a conversion option for existing securities. “It is clear that further discussion is warranted, and direct engagement with key stakeholders should be beneficial,” the trade groups suggested. Ginnie Mae has received considerable support from a variety of industry players for its “straw man” proposal to shift to a single MBS program based on the existing Ginnie II. The program now accounts for more than 90 percent of all ...


August 15, 2014 - Inside FHA Lending

Private MIs, VA Overtake Faltering FHA Program

Weighed down by high premium costs and lender overlays, FHA lost more primary market share to private mortgage insurers and the Department of Veterans Affairs during the second quarter of 2014. Although June’s FHA endorsement numbers have not yet been released, the trend seen in April through May, along with Ginnie Mae securitization data, suggest that FHA business was up a modest 11.5 percent from the first quarter. But that increase provides no comfort to FHA, which saw its market share go down to 33.7 percent, a six-year low. From April to May, FHA forward endorsements rose by 2.4 percent to $10.61 billion. On a year-over-year basis, however, endorsements were down from $21.9 billion in May 2013, according to an Inside FHA Lending analysis of agency data. On the other hand, private MI companies reported a total of $44.19 billion of new insurance written (NIW) during the ... [2 charts]


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 ...


August 15, 2014 - Inside FHA Lending

IG Audit Finds Flaws in Indemnification Recovery

The Department of Housing and Urban Development failed to bill lenders for 486 loans with enforceable indemnification agreements that created losses for the FHA, according to the HUD Inspector General. The loans were originated between 2004 and 2014 and were either in the Accelerated Claims Disposition program or the Claims Without Conveyance of Title program, or they went into default before an indemnification agreement expired. Due to procedural errors and apparent lack of oversight, HUD failed to recover $37.1 million for 486 loans that had enforceable indemnification agreements. The unbilled loans represented 8.0 percent of total activity in the programs during that period. In addition, HUD did not ensure that indemnification agreements were extended to 64 of 2,078 loans that were streamline financed. As a result, HUD incurred losses of ...


August 15, 2014 - Inside FHA Lending

FHA Chief Galante to Resign in the Fall

FHA Commissioner Carol Galante has announced plans to step down from her current post, leaving behind a Mutual Mortgage Insurance Fund that appears well on its way to recovery and a slumping FHA business. Industry response to Galante’s Aug. 12 announcement was mixed. Some stakeholders applauded her toughness and resolve in steering FHA through hard times, while others criticized her for policies that made it more difficult and costly for first-time homebuyers to obtain an FHA-insured mortgage loan. Galante’s nearly three-and-a-half year stint as FHA commissioner was highlighted by her efforts to stabilize the FHA’s ailing Mutual Mortgage Insurance Fund, reduce losses and improve lender oversight. She achieved these goals by creating a comprehensive risk-management structure at FHA, revamping FHA pricing and credit policies, and ...


August 15, 2014 - IMFnews

Pershing Square Sues U.S., GSEs for ‘Brazen’ Profit Sweep

The hedge fund contends the government’s actions short change investors and amounts to a de facto liquidation of Fannie Mae and Freddie Mac...


August 15, 2014 - IMFnews

What We’re Hearing: Maybe Ocwen Should Go Private / A $750 Million Stock Buyback for Ocwen? / Why It’s Hard to be Bullish on the Nonbank ‘Big Three’ / Who the Heck is Privlo? / No Wonder the MBA Likes Mel Watt

We only bring up the “going private” issue because class action attorneys have finally woken up to the fact that Ocwen’s shares have been clobbered over the past year...


August 15, 2014 - IMFnews

SIFMA Bucks Industry Trend, Calls for Increase in Fannie/Freddie G-Fees

SIFMA's call for higher guaranty fees might sound like heresy in the mortgage industry, but the trade group clearly wants the non-agency market to revive.


August 15, 2014 - IMFnews

Galante Departing FHA Amid Gripes About Premiums, HUD IG Report

The HUD IG found the Federal Housing Administration failed to bill lenders for 486 loans with enforceable indemnification agreements that created losses for the FHA.


August 14, 2014 - Inside Mortgage Finance

Delinquencies Increase in Second Quarter, Servicers Grapple with Regulatory Issues

Mortgage delinquencies increased slightly in the second quarter of 2014 compared with the previous quarter, according to the Inside Mortgage Finance Large Servicer Delinquency Index. However, delinquency rates adjusted for seasonal factors showed a decline from the first three months of the year, and the unadjusted rate was down from a year. The total delinquency rate for 23 large servicers, with no seasonal adjustment, hit 6.59 percent at the end of the second quarter, up from 6.52 percent the previous quarter but down from 7.33 percent in the second quarter of 2013. “We have returned...[Includes one data chart]


August 14, 2014 - Inside Mortgage Finance

The ‘Legacy’ MSR Market is Drying Up And It’s Not All Tied to Regulatory Scrutiny

The market for “legacy” mortgage servicing rights has been on ice since earlier this year because of regulatory scrutiny, but there’s a new school of thought that suggests the halcyon days of mega transactions might be over for good. Servicing advisors who work in the MSR market note that the “Lawsky effect” is still being felt by Ocwen Financial and some of its peers, but as time goes on it will be less of a factor. “There’s...


Poll

Home-equity lending is beginning to show new life. My company (pick one):

Plans to enter this market over the next 12 months.

25%

Is already making home equity loans and hopes to increase the offerings.

45%

Is in the market but don’t expect much growth.

15%

Is not making second liens and has no plans to do so.

15%

Housing Pulse