Browse articles from all of our Newsletters related to Regulations.

December 19, 2014 - Inside FHA Lending

Around the Industry

Proposed Data Collection for Evaluating Impact of Pre-Purchase Homeownership Counseling. The Department of Housing and Urban Development has asked the Office of Management and Budget to clear a proposal to collect information for a national study that would gauge the effectiveness of pre-purchase homeownership counseling. Rather than individual telephone interviews, the study plans to conduct focus groups and to collect data regarding the characteristics and performance of participants’ mortgage loans, even after the end of the study. The information collection will involve an estimated 6,000 borrower-participants, 1,800 co-borrowers, 64 counseling organizations and three FHA lenders. The study will be conducted in three cities at a cost of approximately $521,830. The proposal will be published in the ...

December 19, 2014 - Inside FHA Lending

MBA Boycotts FHA Panel Talk for Being too Biased

The Mortgage Bankers Association this week declined to participate in a panel discussion on FHA hosted by the American Enterprise Institute because the trade group did not believe the discussion would be balanced and though it would favor only a certain point of view. The topic was “FHA from 1934 to 1938: Lessons for Wealth Building,” with Ed Pinto, a resident fellow at AEI, and Dave Stevens, MBA president, as presenters. Stevens, however, decided to pull out of the event when he saw the format. In a letter to the AEI organizers, Stevens said he agreed to be a presenter thinking the debate “would be a balanced approach.” “When I first agreed to do this, I did not expect that the format would be 45 minutes of [Ed Pinto] and then no more than 12 minutes for me to respond,” he wrote. “That’s an extremely lopsided approach that did not appear to be ...

December 19, 2014 - Inside FHA Lending

Ocwen Reports FHA Buyouts from Ginnie II Pools

Ocwen Financial’s dry spell of acquiring nonperforming FHA loans out of Ginnie Mae mortgage-backed securities pools ended in early December with the nonbank servicing giant buying $253.1 million of delinquent product. Speculation, however, is mounting that Ocwen may not be long for the Ginnie Mae business, at least as a servicer. Ocwen’s disclosure of the “early” FHA buyouts came 11 days after it sold to an undisclosed buyer. In the first quarter, the company engaged in $646 million of early buyouts (EBO) and followed up with a $490 million EBO deal in the second quarter. However, EBO volume fell to zero in the third quarter. The December acquisition came in one fell swoop raising cautious, short-term expectations at Ocwen. “We expect to execute more such purchases in the next few months, as long as market conditions are favorable,” said Chief Investment Officer John Britti. As fast as it had ...

December 19, 2014 - Inside FHA Lending

FHA Jumbo Originations Surge in 3Q14

Production of FHA-insured jumbo loans ballooned in the third quarter of 2014 reflecting heightened activity in this loan segment during the period. A 23.7 percent quarter-over-quarter surge helped push FHA jumbo lenders’ total volume to $7.71 billion at the end of the nine-month period ending Sept. 30. It was a significant increase for a segment that represents only a sliver of FHA’s overall business. However, compared to last year’s first nine months, volume was down by almost half (48.8 percent) as lenders struggled to keep pace with last year’s output. Strong purchase demand helped drive FHA jumbo originations (all FHA loans over $417,000 up to $625,500 in high-cost areas), as purchase mortgages accounted for 81.1 percent of all FHA jumbos originated during the first nine months of the year. Fixed-rates comprised 86.4 percent of FHA jumbos originated during ... [1 chart]

December 19, 2014 - Inside FHA Lending

USDA Implements New Definition of ‘Rural’ Area

The Department of Agriculture’s Rural Housing Service (RHS) has issued a final rule implementing a new statutory definition of “rural” or “rural area” that could mean increased origination of rural home loans with a USDA guarantee. The Agricultural Act of 2014, also known as the 2014 Farm Bill, mandated the change. Being a statutory requirement, no public comment was sought for the final rule. According to the statute, an area that has a population of more than 10,000 but not exceeding 35,000, and is rural in character and seriously lacks mortgage credit is a “rural area.” The new definition applies to areas deemed rural before Oct. 1, 1990, and later determined not to be rural after the 1990, 2000 or 2010 census and any area deemed rural anytime between Jan. 1, 2000, and Dec. 31, 2010. They will retain eligibility until the receipt of the ...

December 19, 2014 - Inside FHA Lending

OIG Recovers $300M from SunTrust Settlement

The Inspector General of the Department of Housing and Urban Development has announced a $300 million recovery from an earlier settlement between SunTrust Mortgage and the Department of Justice, Consumer Financial Protection Bureau, the HUD Office of the Inspector General, and 50 state attorneys general. The settlement resolved allegations of violations of FHA requirements in a joint complaint filed on June 14, 2014, by federal and state enforcement agencies. The suit against SunTrust alleged misconduct related to the origination and servicing of single-family residential mortgages. The problem loans were uncovered during a routine OIG review of targeted FHA-insured loans. According to the suit, as an FHA direct endorsement lender, SunTrust certified poorly underwritten loans for FHA insurance from January 2006 through March 2012, despite its knowledge of ...

December 19, 2014 - Inside FHA Lending

VA Announces New, Lower Loan Limits in 2015

The Department of Veterans Affairs announced new, lower loan limits for 2015 after Congress decided not to extend the agency’s current maximum lending limits beyond 2014. The current limits will expire on Dec. 31. Under new guidelines, the maximum guaranty amounts for VA loan limits in 2015 will match the lower conforming loan limits established by the Federal Housing Finance Agency for the government-sponsored enterprises next year. These limits range from $417,000 to $625,500, depending on where the borrower is located. VA’s loan limits are tied to the county-based limits established for conforming loans backed by Freddie Mac. Freddie’s loan limits are calculated based on median house prices in counties across the nation. In recent years, VA’s high-cost loan limits have exceeded Freddie’s due to statutory authority granted under the Housing and Economic Recovery Act of 2008. The VA authority was ...

December 19, 2014 - Inside FHA Lending

Congress Shoots Down HAWK, Rejects FHA Fee

Congress denied funding for an enhanced FHA housing counseling initiative for first-time homebuyers and rejected a request for authority to collect a new FHA fee to enhance quality-assurance reviews. President Obama this week signed the FY 2015 Consolidated and Further Continuing Appropriations Act, a comprehensive package of 11 funding bills for federal agencies. The bill does not include the provisions the FHA had sought to toughen enforcement and help lower costs for first-home purchases. The House passed the $1.1 trillion omnibus spending bill, H.R. 83, by a vote of 219-to-206 on Dec. 11, narrowly avoiding a government shutdown. The Senate approved the bill on Dec. 13. The bill allocates $47 million to the Department of Housing and Urban Development’s housing counseling program and $50 million for foreclosure mitigation counseling. It also provides $400 billion in ...

December 19, 2014 - Inside FHA Lending

2015 Outlook: Downward Trend Continues

FHA originations are expected to decline modestly in 2015 unless the agency gives in to industry pressure to lower mortgage insurance premiums and lenders ease up on their overlays, according to analysts. Analysts anticipate no meaningful decline in FHA market share next year but do expect some drop as private mortgage insurance become more competitive, especially among borrowers with 720+ FICO scores. Overall, analysts expect 2015 to be slightly better than 2014 because of increased purchase-mortgage lending, which is partly offset by lower refinance activity. Mortgage volumes should climb to $1.18 trillion in 2015, some say. At Keefe, Bruyette & Woods, analysts Bose George and Chas Tyson predict private MIs will take more market share from the FHA in 2015. They do not expect meaningful policy changes from the FHA this year. For example, FHA has given ...

December 19, 2014 - Inside Nonconforming Markets

Major Servicers Improving, Save for Ocwen

Most major servicers participating in the Home Affordable Modification Program and subject to national mortgage servicing settlements are generally improving their performance, according to officials overseeing the programs. CitiMortgage will receive incentive payments from HAMP that were being withheld due to poor performance, the Treasury Department noted in a report released last week. Citi went from needing “substantial” improvement in HAMP ...

December 19, 2014 - Inside MBS & ABS

Global Coalition of Securities Regulators Proposes Standards for Simple, Transparent Securities

A coalition of global securities-market regulators proposed criteria late last week to assist the financial industry’s development of “simple, transparent and comparable” securitization structures. The proposed criteria from the Basel Committee on Banking Supervision and the International Organization of Securities Commissions would apply to many types of MBS and ABS. The extent of involvement by the Securities and Exchange Commission regarding the proposed criteria is unclear. The SEC declined to comment on the proposal and the Bank for International Settlements wouldn’t reveal the members of the taskforce that worked to develop it. However, the SEC is a member of IOSCO and the agency noted that standards issued by IOSCO become the benchmark against which an IOSCO member’s regulatory practices are assessed. The BCBS and IOSCO said...

December 19, 2014 - Inside MBS & ABS

Most Consumer ABS Asset Classes to Hold Up Well In 2015, With Subprime Auto a Question Mark

Wall Street analysts are generally projecting a year of stability for most asset classes in the consumer ABS space for 2015, despite a few more losses and an anticipated increase in interest rates. The one exception might be subprime auto. Analysts at Standard & Poor’s Ratings Services cited a favorable overall environment characterized by a strengthening economy, healthy consumer credit fundamentals, and robust structural protections in ABS transactions. “We expect...

December 19, 2014 - IMFnews

Lawsky Faults Nonbank Servicer for Relying on Technology, Falling Behind Performance of Peers

Lawsky didn't name names, but the servicer he singled-out shares a number of characteristics with Ocwen Financial.

December 18, 2014 - Inside Mortgage Finance

President Obama Signs FY 2015 Omnibus Spending Bill, Some Rue Failure to Fund HAWK, FHA IT Upgrades

President Obama this week signed a comprehensive package of spending bills, providing funding to federal agencies through fiscal 2015 but missing two initiatives that would have toughened FHA enforcement and benefited new homeowners through enhanced housing counseling. The FY 2015 Consolidated and Further Continuing Appropriations Act is comprised of 11 funding bills for all federal agencies, including the Department of Housing and Urban Development. The bill provides...

December 18, 2014 - Inside Mortgage Finance

Subservicing Volumes Stay Relatively Flat, But Big Drops for BofA, Nationstar, Ocwen

The nation’s subservicers, as a whole, reported a modest decline in their business volume during the third quarter, though some firms experienced large declines compared to a year ago, according to exclusive survey figures from Inside Mortgage Finance. The biggest year-over-year decline came at Bank of America, which had just $5 billion in subservicing contracts at Sept. 30, a 78.3 percent drop compared to the same period last year. BofA’s decline in the subservicing sector is...[Includes one data chart]

December 18, 2014 - IMFnews

Fed Chief Yellen Surprised at Lagging Housing Recovery

Meanwhile, the FOMC indicated it will continue to reinvest principal payments from its holdings of agency debt and MBS.

December 17, 2014 - IMFnews

Short Takes: Okay, Is Mortgage Credit Tighter or Looser? / A Management Shakeup at a Texas Lender / Quick, Rehire All the People You Fired / Tax Extender Bill Passed / Ex-CFC LO Headed to ‘The Big House’

A mid-sized nonbank based in Texas saw two of its top officers resign last week, industry sources confirmed to IMFnews.

December 17, 2014 - IMFnews

FHA MMIF Will Get $300MM From SunTrust Settlement

When settlements are first reported rarely does the money change hands right away.

December 17, 2014 - IMFnews

CBO: Private Capital Can Replace the GSEs but Not Much Savings for Uncle Sam

Advocates for GSE reform looking for savings in the federal budget will be disappointed...

December 17, 2014 - IMFnews

Quicken Completed Mortgage Broker LPMI ‘Sale’ in 60 Hours

A handful of other large national wholesalers offer LPMI, including United Wholesale Mortgage.

December 17, 2014 - IMFnews

OCC: Banks Are Actually Tightening Underwriting Standards

The OCC said two banks exited the residential mortgage business in 2014 and another two plan to exit in the coming year.

December 16, 2014 - IMFnews

Short Takes: Can it Get Any Worse for Ocwen? / JPM Makes Progress on Loan Mods / Skyline Will Double its Capital Base / No Love for Russia / #1 in St. Louis?

The subordinated debt deal will double the capital base of Skyline Lending.

December 16, 2014 - IMFnews

More Regulatory Woes for Ocwen – This Time From the National Servicing Monitor; Stock Hit

The servicing monitor then hired an independent accounting firm, McGladrey, to retest Ocwen’s performance on a number of metrics tied to the national servicing settlement.

December 16, 2014 - IMFnews

Servicing Settlement Monitor Sees Improvement at Everyone but Ocwen

The monitor said Green Tree is working toward addressing issues that caused the servicer to fail eight metrics that were tested in the fourth quarter of 2013.

December 15, 2014 - IMFnews

Short Takes: CMLA Wants GSEs to Retain Net Earnings / Cantor Expands Whole Loan Trading Desk / Carrington Hires Orman / Some Nice Words for Ocwen / FCI Shows Strong Growth

Moreover, CMLA wants lower guaranty fees for seller/servicers...

December 12, 2014 - IMFnews

What We’re Hearing: Does Impac Have Money for a Big M&A Deal? / Ocwen Catches the Eye of Treasury / A 480 FICO Score Lender? / How Fannie and Freddie Really Feel About Nonbanks

What do Fannie and Freddie really think of nonbanks? Read their SEC filings.

December 12, 2014 - Inside MBS & ABS

Secondary Market Reps Discuss Reg AB II Concerns With SEC Officials, Work Projects Moving Forward

Structured Finance Industry Group staff and some investor members met recently with the Securities and Exchange Commission’s Office of Structured Finance to talk about the initial reaction that investors had to the final Regulation AB II rule. Among topics addressed were market trends, operational aspects and scope of applicability of the final rule, according to an update SFIG provided its members recently. Meanwhile, the SFIG is...

December 12, 2014 - Inside MBS & ABS

FINRA Set to Propose ‘Conservative and Measured’ Increase to Transparency on Pricing of MBS Trades

The Financial Industry Regulatory Authority will soon propose increasing transparency on trading of certain MBS, but officials say it won’t the market. Late last week, the FINRA board of governors authorized issuance of a regulatory notice soliciting comment on a proposal to amend rules for Trade Reporting and Compliance Engine, or TRACE. The proposal would provide for public dissemination of transaction information in real time for deals valued under $1 million, and in aggregate weekly and monthly reports for transactions valued at $1 million or more. FINRA Chairman and CEO Rick Ketchum said...

December 12, 2014 - IMFnews

CitiMortgage Gets Its HAMP Payments, Treasury Looking Into Ocwen’s Misdated Letters

Nationstar, Ocwen, Select Portfolio Servicing and Wells Fargo all need moderate improvement in their HAMP performance.

December 12, 2014 - IMFnews

Waiver of Condo Approval Requirements Extended by FHA Until August 2016

The FHA temporary waiver was issued in November of last year and now has been extended to Aug. 31, 2016.

December 12, 2014 - IMFnews

Treasury Joins the Chorus of Government Institutions Fretting About Nonbank Servicers

The Conference of State Bank Supervisors is working on capital requirements for nonbank servicers, a story first reported by Inside Mortgage Finance last month.

December 11, 2014 - Inside Mortgage Finance

Treasury Increases Incentives for Non-Agency HAMP, GSE Program Differences Remain

The Obama administration announced increased incentive payments for borrowers in the non-agency Home Affordable Modification Program along with an increase in funds for borrowers that need relocation assistance as part of a short sale or deed-in-lieu of foreclosure. Meanwhile, there are concerns that the HAMP program for mortgages serviced by the government-sponsored enterprises hasn’t been extended to match the non-agency program. The changes to the non-agency HAMP were announced late last week by the Treasury Department and the Department of Housing and Urban Development. HAMP borrowers will be eligible...

December 11, 2014 - IMFnews

Short Takes: Mortgage M&A Trend Hits Utah / GSEs Can’t Pass On the Cost to Lenders / No More Flips With FHA Loans / A Nice Dividend From PennyMac / A Coming Refi Boom? Yes or No?

But there's one little wrinkle: the GSEs cannot pass the cost of funding the HTF onto lenders…

December 11, 2014 - IMFnews

Funding for FHA’s HAWK Initiative Killed, Higher Premiums Nixed Too

A proposed FHA administrative fee as high as 4 basis points to fund quality assurance enforcement and technology upgrades also went down in flames.

December 11, 2014 - IMFnews

Affordable Housing Contribution Will Cost GSEs $300 Million a Year; Some Pols Mad

Rep. Ed Royce of California: "Money coming in from the GSEs should go to the taxpayers instead of a slush fund for ideological housing groups to play around with.”

December 11, 2014 - IMFnews

A Storm is Coming and It’s Called Fair Lending Enforcement

The data to be reported under the CFPB’s proposal likely will inflame the current fair lending regulatory environment.

December 10, 2014 - IMFnews

Short Takes: Are Investors Done Selling Ocwen’s Stock? / Who Might DocMagic Buy Next? / How is CitiMortgage Like Ocwen? / CFPB Budget Rises / Fannie Mum on Reinsurance Partners

But is DocMagic president and CEO Dominic Iannitti done buying? Stay tuned…

December 10, 2014 - IMFnews

Nonbank Trade Group Wants Depository Parity on Loan Officer Testing, More

The new plea from the CHLA comes at a time when depositories are losing origination market share to fast growing nonbanks like Freedom Mortgage, United Wholesale Mortgage and others.

December 10, 2014 - IMFnews

Key Democrat Predicts GSE High LTVs Will be Under ‘Siege’ in the Next Congress

Sen, Menedez added: “These [programs] were not the drivers of the financial crisis. We’re going to hear the opposite of that in the next session of Congress.”

December 10, 2014 - IMFnews

In 2015, Half of All CFPB Staffers Will be in Supervision, Enforcement or Fair Lending

Compared to two years ago, staffing levels at the CFPB have increased a whopping 55 percent. Of course, Congress has no say over the agency’s budget.

December 9, 2014 - IMFnews

HUD Inspector General: FHA Accounting on Legal Recoveries Sloppy

Because of the irregular nature of legal settlements and contractor backlogs, the FHA did not properly recognize its receivables, the IG said.

December 9, 2014 - IMFnews

FHFA Still Working on Capital, Liquidity Standards for Nonbanks

One source told IMF that in some instances, certain nonbanks have been asked by the agencies to hold “more capital” in reserve accounts than other seller/servicers.

December 8, 2014 - Inside the CFPB

Worth Noting

Senate, House to Wrap Up 113th Congress This Week. The U.S. Senate and the House of Representatives are expected to wrap up the affairs of the 113th Congress this week, but it was unclear as of press time whether any pending CFPB-related legislation might make its way through the national legislature’s gauntlet and wind up on the desk of President Barack Obama. Last week, the House passed a large package of tax extenders. This week, House and Senate negotiators are expected to be busy working on appropriations legislation to keep the government funded for the remainder of the fiscal year. The 114th Congress is expected to convene on Jan. 6, 2015, with Republicans firmly in control of both chambers, presenting ...

December 8, 2014 - Inside the CFPB

Results of OIG Audits of CFPB Expected Sometime This Month

The most recent work plan issued by the CFPB's Office of Inspector General indicates the results of a handful of audits are expected to be completed sometime during the fourth quarter, indicating that either they will be released within the next few months or held over until sometime after the start of 2015. One such review has to do with a joint evaluation of coordination between the CFPB and other regulatory agencies. The inspectors general of the Federal Reserve, the Federal Deposit Insurance Corp., the National Credit Union Administration, and the Department of the Treasury are conducting “an evaluation of the coordination between the CFPB and other regulatory agencies with respect to conducting supervisory activities,” said the OIG’s work plan. ...

December 8, 2014 - Inside the CFPB

New Report Highlights Treasury’s OFR Cooperation With CFPB

Industry representatives might be interested to know that the Treasury Department’s Office of Financial Research is working with the CFPB on some key regulatory initiatives. For instance, the OFR is providing technical support to the CFPB and other regulators to create a universal mortgage loan identifier to promote transparency, data aggregation, comparability, and analysis in the home mortgage market, the office said in a new report. The Dodd-Frank Act authorized the bureau to collect more data about individual mortgage loans and to mandate that entities reporting data under the Home Mortgage Disclosure Act provide a universal loan identifier for each loan or application that they are required to report. The OFR published a working paper on this subject in late ...

December 8, 2014 - Inside the CFPB

Ombudsman Report IDs Multiple Concerns of Industry, Advocates

The CFPB ombudsman’s third annual report highlighted a number of concerns from industry representatives as well as consumer advocates on a range of issues critical to both constituencies. For instance, some of the industry issues the ombudsman’s office heard about in the past year were the need for additional clarity on CFPB points-of-contact for industry, a desire for more clarity on regulatory compliance for business planning and operations, and a concern about broad examination information requests. The office also received industry input about the need for normalization of data in the public consumer complaint database, the differences between the language used in consent orders and their corresponding CFPB press releases, and issues related to the formal or informal nature of ...

December 8, 2014 - Inside the CFPB

Execs Expect Consumer Complaint Costs to Rise Due to CFPB Regs

Almost all (92 percent) financial services executives surveyed by Aptean, an enterprise application software vendor based in Atlanta, expect the costs of handling complaints to increase as a result of the regulations and enforcement activities of the CFPB, the firm said in a new study. Aptean’s new national survey also found that almost three out of four (73 percent) organizations say they already have experienced a jump in regulatory compliance costs since the CFPB started its regulatory and supervisory roles. Also, a majority (57 percent) of financial service executives said that the complexity of complaints has increased since the CFPB started operations in 2011. Meanwhile, 39 percent say complaint complexity has stayed about the same and only 4 percent say ...

December 8, 2014 - Inside the CFPB

Complaints About Debt Collection Down Again by Double Digits in 3Q

Debt collectors showed an even larger double-digit decline in consumer complaints filed about them with the CFPB in the third quarter of 2014 than they did in the second – a 20.5 percent drop versus a 11.5 percent decline – but the latest numbers in the bureau’s database show a huge 85.7 percent jump year-over-year. Among the top 50 ranked by Inside the CFPB, 17 companies saw triple-digit increases YOY, and one even saw a quadruple-digit increase for the period. Part of the surge could be explained by the fluid nature of the CFPB’s data collection and classification processes, which tends to reflect retroactive adjustments. For instance, back on April 1, first quarter data showed 9,140 debt collection complaints. But by July 1, ...

December 8, 2014 - Inside the CFPB

Special Servicers Beat Banks on Handling Distressed Mortgages

Special servicers continue to outperform the big banks when it comes to dealing with distressed mortgages, and that bodes well for the future of transferring distressed servicing rights, according to a new report by analysts at Compass Point Research & Trading. “Servicers have been under a ton of scrutiny in the past several quarters due to their servicing practices,” the analysts said, based on their review of homeowner complaints to the CFPB. “However, as the complaint data show, the special servicers screen as being significantly better at servicing distressed mortgages compared to the big banks.” According to their analysis, US Bank (18.2 percent), PNC Financial (14.8 percent) and SunTrust (11.3 percent) have had the highest level of complaints per delinquent ...

December 8, 2014 - Inside the CFPB

AMC Minimum Requirements Final Rule Expected This Month

The CFPB’s updated semi-annual regulatory agenda is out, and one of the tidbits it contains is that the joint agency final rule on minimum requirements for appraisal management companies is expected sometime this month. The CFPB is working on the rule with the Federal Housing Finance Agency, the Federal Reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp., and the National Credit Union Administration. The rule is designed to implement the appraisal-related amendments to the Financial Institutions Reform, Recovery, and Enforcement Act mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act. “Work to issue a final rule to implement the Dodd-Frank Act’s AMC amendments to FIRREA is ongoing,” said the CFPB’s updated agenda. ...


What will Fannie Mae’s and Freddie Mac’s new 97 LTV programs mean for your business?

It will give our business a big boost as there is a lot of pent up demand for the product.
It will have only a minor impact on our overall business as we already are doing high LTV business through FHA and some of our high LTV FHA business is likely to shift to Fannie and Freddie.
It won’t have any impact on our business as we plan to steer clear of all high LTV business – particularly in the GSE market.

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