Regulations

Browse articles from all of our Newsletters related to Regulations.

October 23, 2014 - Inside Mortgage Finance

QM ‘Right to Cure’ Approved

The Consumer Financial Protection Bureau this week finalized a rule change that allows lenders to fix inadvertent mistakes that send mortgages over the 3 percent cap on points and fees for qualified mortgages. Under the “right-to-cure” amendment, a lender can, under limited circumstances, re-fund the excess amount of interest to keep the loan a QM.


October 23, 2014 - Inside Mortgage Finance

More Focus on Nonbank Servicers

The Conference of State Bank Supervisors this week formed a task force on mortgage servicing rights to develop options for capital requirements for nonbank servicers. The task force includes representatives from nine state regulators, including the New York Department of Financial Services.


October 24, 2014 - Inside MBS & ABS

SEC Provides Some Details on Its Reg AB II Pilot Project, But Do You Really Want to Participate?

The Securities and Exchange Commission has provided more details about a pilot project to test the revised requirements for shelf registrations that are part of Regulation AB II. ABS issuers must comply with the new rules and forms, other than asset-level disclosures, no later than Nov. 23, 2015. The SEC’s Division of Corporation Finance recently invited ABS issuers to request staff review of their registration statements in draft form, prior to filing. “We will select...


October 24, 2014 - Inside MBS & ABS

Final Rule Setting Risk-Retention Requirements For Non-Agency MBS Features Broad Exemptions

Six federal regulators approved a final rule this week setting risk-retention requirements for residential MBS transactions, exempting the entire agency MBS universe and non-agency securities backed by qualified mortgages. There is not that much left. The risk-retention requirements for residential mortgages will take effect one year after the final rule is published in the Federal Register, which is expected shortly. Regulators opted to align the definition for qualified-residential mortgages with the standards established by the Consumer Financial Protection Bureau for QMs. The sponsor of a non-agency MBS that includes non-QRMs will have to retain at least 5.0 percent of the balance of the security, as required by the Dodd-Frank Act. In 2011, federal regulators proposed...


October 24, 2014 - IMFnews

Final Rule on Risk-Retention For Non-Agency MBS Features Broad Exemptions

Many lenders and some investors pushed for an alignment of QRM and QM, while other investors sought protections beyond the requirements for QMs.


October 24, 2014 - IMFnews

FHFA IG Among Growing List of Financial Regulators with Armed Agents

According to the most recently available data, 33 IG offices had roughly 3,500 agents authorized to carry firearms.


October 24, 2014 - IMFnews

Now the States Want to Develop Capital Standards for Nonbank Servicers

The new nonbank task force includes representatives from nine state regulators, including the New York Department of Financial Services where Benjamin Lawsky is the superintendent.


October 23, 2014 - Inside Mortgage Finance

FHA to Revisit Mortgage Insurance Premiums While Auditors Assess MMIF’s Improving Condition

The FHA has been reviewing the insurance premiums it charges and will do so again later this year as well as in 2015, said a top agency official, but whether this will lead to a reduction is unclear. Speaking at the annual convention of the Mortgage Bankers Association in Las Vegas this week, FHA Deputy Commissioner Biniam Gebre said the agency is “not done” with the premium issue and may revisit it in the next couple of months or perhaps next year. Gebre will temporarily replace FHA Commissioner Carol Galante, who is scheduled to leave the agency at the end of the week to join the faculty at the University of California in Berkeley. Galante headed...


October 23, 2014 - Inside Mortgage Finance

FHA Share of Home-Purchase Financing Falls to Five-Year Low, Borrowers Shift to GSEs and VA

High fees on FHA mortgages have helped push FHA’s market of financing for home purchases to the lowest level since the financial crisis, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. FHA mortgages were used to finance 18.2 percent of home purchases in September, based on a three-month moving average. That was down from a 21.9 percent share in September 2013 and 36.6 percent in May 2010, the highest level for FHA financing in the five-year history of HousingPulse. From 2008 through 2013, the Department of Housing and Urban Development increased...


October 23, 2014 - IMFnews

Short Takes: A ‘Troubling’ Corporate Culture at Ocwen? / IMA Launches Crowd-Funding Unit / Massachusetts Loses Foreclosure Battle with GSEs / Reverse Stock Split for Mortgage REIT

Interactive Mortgage Advisors has launched RealPartner.com, a crowd funding platform giving accredited investors access to performing residential mortgages...


October 23, 2014 - IMFnews

Ocwen Shareholder: Investors Have Been ‘Smoked,’ Will OCN Be Forced to Sell MSRs?

One servicing analyst told IMFnews that if Ocwen continues to get downgraded on its servicer ratings it could be forced to sell MSRs and/or post additional capital.


October 23, 2014 - IMFnews

CFPB Finalizes ‘Right to Cure’ Language for QM Loans

Any refunds paid by the originator must occur within 210 days after the loan is made.


October 23, 2014 - IMFnews

Yes, But Will the Megabanks Loosen Credit?

David Steckel of Bank of America said his institution has focused on capturing more of the customers who fit into the company’s credit box rather than making that box bigger.


October 22, 2014 - IMFnews

Wells’ Sale of $39 Billion in MSRs to Ocwen Imperiled; A $14 Stock?

Ocwen said it has fixed the "back-dating" problem but it may be too late for the company.


October 22, 2014 - IMFnews

FHFA’s Watt Promises a CSP CEO Will be Named by Year-end

One former CEO candidate told IMFnews that back when he was approached about the job, the starting salary for the position was at least $400,000.


October 22, 2014 - IMFnews

GSE Shareholders Look to Iowa Federal Court to Vacate DC Judge’s Dismissal

An investor in GSE stock, Continental’s counsel in the case is Cooper & Kirk, the same law firm that represents Fairholme, a large hedge fund that bought up GSE stock last year.


October 22, 2014 - IMFnews

Flagstar Boosts Originations by 21 Percent, but CFPB Settlement Hammers 3Q Results

However, there was some good news. Flagstar reported residential originations of $7.19 billion, a 21 percent gain from 2Q.


October 21, 2014 - IMFnews

Ocwen’s Stock Plunges After NYS Levies More Allegations Against the Firm

At press time, the firm’s share price was getting crushed, down 25 percent on the day to a new 52-week low of $19.89.


October 21, 2014 - IMFnews

Short Takes: MBA Shows the Love for FHFA’s Mel Watt / Looser Mortgage Credit? Are You Crazy? / The CFPB ‘ePilot’ Moves Closer / The Fear of Running Out of Money / Are You Afraid of Ghosts?

After all, didn’t America suffer a housing “depression” because credit was too loose? Some GOP conservatives in Congress live by the edict: those who can own; those who can’t rent…


October 21, 2014 - IMFnews

Ginnie Mae Will Allow for Supplemental Insurance on the VA Guaranty

HUD's Castro noted that the VA program limits its loan guarantee to a maximum of 25 percent, leaving many lenders exposed and reluctant to offer VA-guaranteed loans.


October 21, 2014 - IMFnews

New Attorney General Likely to Continue Aggressive Use of FIRREA in Mortgage Fraud Cases

FIRREA – ushered in during the nation’s savings and loan crisis – has four notable elements which make it an attractive path to prosecution...


October 21, 2014 - IMFnews

CFPB Promulgates Annual ‘Privacy Notices’ Final Rule

Under the CFPB’s new rule, financial institutions will be able to post privacy notices online instead of distributing an annual paper copy.


October 21, 2014 - IMFnews

QRM = QM; Final Rule on Risk Retention Includes Exemptions for Large Majority of Mortgages

Non-agency MBS sponsors will be allowed to retain the risk portion on vertical or horizontal tranches of the security or a combination of the two.


October 21, 2014 - IMFnews

FHFA’s Olive Branch on Buybacks and HLTVs Welcomed but It Won’t be a Game Changer

One mortgage executive added: “Watt is trying to do the right thing, but I’m not sure he will get there. It’s good to see the government admit that the pendulum went too far.”


October 20, 2014 - IMFnews

FHFA Chief Floats Initiatives Tied to Looser Credit: More Buyback Relief and Higher LTVs

In defining misrepresentations, FHFA will set a minimum number of loans that must be identified with one of the six trigger elements.


October 20, 2014 - IMFnews

Short Takes: Will FHFA’s Mel Watt Deliver the Goods? / Actually, Fannie is Buying 97 Percent LTV Loans, But… / IBM Gets Whacked / First Republic’s GOS / Quicken CEO Sworn in at MBA Show

What does IBM have to do with the mortgage business? Actually quite a bit, IBM is one of Fannie Mae’s largest technology vendors...


October 20, 2014 - IMFnews

A New Player in Mortgage M&A: Mid-sized Commercial Banks

Charbonneau, Klein and other advisors report that mortgage M&A activity is the strongest it has been in years.


October 20, 2014 - IMFnews

Ginnie Mae Ushers in New Capital Rules for Issuers; Firms Will be Scored Monthly

Buyers of “bulk” Ginnie mortgage servicing rights will have to meet the test by January 2015.


October 20, 2014 - IMFnews

CFPB Throws the Industry a Few Bones on theTRID Rule

This could mean lenders would require borrowers to lock interest rates only during business hours or even early in the day.


October 17, 2014 - Inside Mortgage Trends

New Regs Pressure Lender Profitability

New regulations in the mortgage industry have wreaked havoc on the business, with lenders facing higher compliance risk and growing compliance costs, according to Fannie Mae’s third quarter survey of mortgage lender sentiment. The results show that 72 percent of lenders reported that recent regulations, among them the qualified-mortgage rule and the risk-based capital rules for banks, have had a “significant” impact on their business. Only 22 percent reported “minimal” impact ...


October 17, 2014 - Inside The GSEs

Enterprise Endnotes

IG Recommends FHFA Upgrade Its Recordkeeping. The Federal Housing Finance Agency is in compliance with its recordkeeping procedures but the policy and infrastructure of its records management could do with an upgrade, concluded an evaluation by FHFA’s Inspector General last week. The IG said that the Finance Agency’s Division of Enterprise Regulation’s recordkeeping practices “have limitations that impede the efficient retrieval” of examination workpapers by agency staff and by IG auditors.


October 17, 2014 - Inside The GSEs

FHFA-IG Among Growing List of Agencies Employing Armed Agents

The Inspector General of the Federal Housing Finance Agency is among a growing list of official government watchdog agencies authorized to employ armed investigators when ferreting out waste, fraud and abuse, according to a recent report. The report issued by the Congressional Research Service listed some three dozen IGs that possess law enforcement authority, which legally empowers them to make arrests, seek warrants and carry firearms.


October 17, 2014 - Inside The GSEs

Moody’s: FHFA Shouldn’t Increase Fannie, Freddie Guaranty Fees

The Federal Housing Finance Agency “should not appreciably change” guaranty fees charged by Fannie Mae and Freddie Mac, according to a new paper by Moody’s Analytics. The paper, “A General Theory of G-Fees,” by Mark Zandi, chief economist at Moody’s Analytics, and Cristian deRitis, a senior director of consumer credit analytics, noted that the two GSEs are currently charging an average g-fee of approximately 60 basis points across all new loans they insure.


October 17, 2014 - Inside The GSEs

FHFA Proposed Rule Would Define FHLBank ‘Former Member’

A proposed Federal Housing Finance Agency rule would define a Federal Home Loan Bank “former member” as an institution whose membership has been terminated but which must still maintain FHLBank stock. Published in the Oct. 8 Federal Register, the proposal’s definition would apply to institutions whose membership has ended but which continue to hold stock in the FHLBank as required by the Bank’s capital plan. …


October 17, 2014 - Inside The GSEs

GSE’s Common Securitization Solutions Still Has No CEO

After a year of searching for a chief executive to lead Common Securitization Solutions, the Federal Housing Finance Agency is still looking, but it continues to hire staff. “The search continues,” said a government official close to the matter. “We even have a search firm.”Although the FHFA is keeping a tight lid on information regarding CSS, it’s now common knowledge that the search firm in question is the Washington-based Spencer Stuart, which bills itself as “one of the world’s leading global executive search and leadership consulting firms.”


October 17, 2014 - Inside MBS & ABS

Experts: New AG Likely to Continue Aggressive Use of FIRREA Against Industry, Individual Executives Targeted

Mortgage industry executives should be aware and expect continued – and perhaps even more muscular – use of a 1989 federal law by government prosecutors to pursue mortgage-related claims. At the direction of Attorney General Eric Holder, the Department of Justice embraced the use of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) in MBS lawsuits. Despite Holder’s announcement late last month that he is stepping down after six years as AG, there is...


October 17, 2014 - IMFnews

Judge Won't Give Former Fannie CFO Access to Documents in Hedge Fund Case

Government attorneys sought to block Howard’s access on the grounds that he owns Fannie shares and would be biased.


October 17, 2014 - IMFnews

Small Mortgage Lenders Renew Call for Lower FHA Premiums; A Healthier MMIF?

The fiscal 2014 audit report on the health of the FHA MMIF is expected to be released in mid-November.


October 17, 2014 - IMFnews

Wall Street Says ‘Not so Fast’ On Single GSE Security; Lenders Say Full Speed Ahead

Creation of a single GSE MBS would eliminate Freddie Mac's pricing disadvantage and improve liquidity in the to-be-announced market.


October 16, 2014 - Inside Mortgage Finance

ATR Rule Not Impairing Access to Credit, But Other Regs Are Raising Costs, Hurting Customer Service

The Consumer Financial Protection Bureau’s high-profile ability-to-repay rule has had “little to no impact” on borrower access to mortgage credit, officials at the bureau said this week. But other regulations are certainly forcing compliance costs to go up while pushing the quality of customer service down, according to community bankers. Speaking during a meeting of the CFPB’s Community Bank Advisory Council in Washington, DC, this week, Brian Webster, program manager for the bureau’s Office of Mortgage Markets, said he was glad to see that mortgage lending did not grind to a halt the day after the ability-to-repay rule took effect in January. “Over the past months, we have heard...


October 16, 2014 - Inside Mortgage Finance

Small Mortgage Lenders Renew Call for Lower FHA Premiums, in Anticipation of Healthier Insurance Fund

A group of small and mid-sized lenders this week renewed their request to the Department of Housing and Urban Development to cut FHA’s annual premiums to improve borrower access to credit, a change that likely depends on the annual audit of the Mutual Mortgage Insurance Fund. Sources expect the next annual audit report to show further improvement in the health of the MMI Fund, which had a negative economic value of $1.3 billion in September 2013, the end of the government’s 2013 fiscal year. Beyond getting back into the black, the MMIF still must reach a 2.0 percent statutory capital reserve requirement, which the last audit predicted would occur next year. The fiscal 2014 audit report is expected...


October 16, 2014 - Inside Mortgage Finance

CFPB Throws Industry a Few Bones on TRID Rule; Are There More to Come and, If So, Exactly When?

The Consumer Financial Protection Bureau last week proposed two narrow revisions to its complex mortgage origination disclosure rule, leaving the industry guessing what further changes could come as lenders gear up to implement a massive rule known as TRID: the Truth-in-Lending/Real Estate Settlement Procedures Act integrated disclosure. For most lenders, the most significant proposed change would relax the requirement that lenders provide a revised loan estimate on the same day that a consumer’s rate is locked. After considering industry feedback, CFPB staff concluded that such a short turnaround may be challenging for lenders that allow consumers to lock interest rates late in the day or after business hours. This could mean...


October 16, 2014 - Inside Mortgage Finance

State Regulators Propose Major Expansion Of Data Collection for Lending, Servicing

State regulators recently proposed expanding the data that state-licensed lenders must report on the Nationwide Mortgage Licensing System and Registry’s mortgage call report. The State Regulatory Registry said the data help state regulators supervise licensees, determine examination schedules, monitor compliance and calculate assessments. The SRR was established by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators. The SRR owns and operates the NMLS and has required state-licensed lenders to submit quarterly call report data since 2011. On Oct. 1, the SRR proposed...[Includes one data chart]


October 16, 2014 - IMFnews

Short Takes: Short Sellers Target Walter / But Walter Gets a Disclosure Exemption / Will QRM be Aligned with QM? We’ll Know Next Week / NTC Finds Flaws in Servicing Records / DocMagic Makes an Acquisition

More trouble for Walter Investment Management? Meanwhile, according to NTC, as many as 490,000 homeowners could be affected by faulty servicer database records.


October 16, 2014 - IMFnews

Moody’s Zandi: FHFA Shouldn’t Increase G-Fees, But FHA Can Lower Premiums

Zandi and deRitis believe that the FHA is on track to be able to lower its mortgage insurance premiums by 50 basis points to an average of 120 basis points for total upfront and annual premiums.


October 16, 2014 - IMFnews

Lender: CFPB Appraisal Rule Costing His Shop an Extra $50K a Month

Timothy Zimmerman, president and CEO of Standard Bank, said he’s bothered by too small a percentage of lenders making loans outside the QM parameters.


October 16, 2014 - IMFnews

State Regulators Propose Major Expansion of Data Collection for Lending, Servicing

Under the proposal, lenders would be required to report the originations of QMs and non-QMs.


October 15, 2014 - IMFnews

FSR, NAFCU Weigh In on the Single GSE Security

Officially launched a year ago, the Bethesda, MD-based Common Securitization Solutions has no chief executive officer or chairman but continues to hire staff.


October 14, 2014 - IMFnews

Short Takes: Walter Joins the ‘New Low’ Club / When Will the ‘Dark Days’ End for the Public Nonbanks? / ETA on Wingspan Announcement? / MBA Wants Faster Action on a Single Security / In MI We Trust

Specialty servicer Wingspan is expected to issue a press release this week, providing some clarity about a change of control at the company and the future of its founder...


October 14, 2014 - IMFnews

Walter Reveals Additional Scrutiny on its Servicing Practices; It Met With AGs

The $17 million reserve will be booked as part of Walter's third quarter earnings.


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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