Regulations

Browse articles from all of our Newsletters related to Regulations.

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.


October 14, 2014 - IMFnews

Consumer Complaints Filed with the CFPB Fell by Double Digits in 3Q

When it comes to individual lenders, most of the top 50 targets of consumer gripes generally either stay in the same ranking or move up or down one or two levels.


October 14, 2014 - IMFnews

NAR Goes to Bat for ‘Mini-Corr’ Lending Channel

Under a “mini-corr” arrangement, a warehouse lender provides a line of credit to a loan broker, transforming that broker into an actual funder instead of just a loan facilitator.


October 13, 2014 - Inside the CFPB

Worth Noting/People on the Move/Looking Ahead

Bureau Updates Its Reverse Mortgages Guide With Words of Caution. The CFPB has updated its reverse mortgage guide to reflect some recent, potentially important changes to such loan products. The bureau is urging caution, noting such mortgages can be risky and expensive. “It’s a complicated type of loan that works best for homeowners who carefully consider all of their options,” the agency said. One of the highlighted changes limits the amount of money a homeowner can draw from the loan in the first year. “Borrowers often get into trouble by taking a lump-sum payment early on,” said the CFPB. “It may feel great to get a big payment up front, but borrowers can outlive this money – which spells financial trouble for borrowers who live longer lives.” ...


October 13, 2014 - Inside the CFPB

CFPB Updates Mortgage Rules Readiness Guide, Including TRID

In another bid to help mortgage bankers better assess their compliance capabilities, the CFPB has updated its mortgage rules readiness guide to include the Truth in Lending Act and Real Estate Settlement Procedures Act integrated mortgage disclosures, otherwise known as “TRID.” Version 3.0 of the guide, dated September 2014, summarizes the mortgage rules finalized by the CFPB as of Aug. 1, 2014, but it is not a substitute for the rules. “Only the rules and their official interpretations can provide complete and definitive information regarding their requirements,” the bureau reminds. Each rule description includes a hyperlink with additional information, including Small Entity Compliance Guides, which may make the rule easier to digest. The guide consists of four parts: a summary of the rules ...


October 13, 2014 - Inside the CFPB

CFPB Could Enhance Its Small Biz Review Process, OIG Report Finds

The CFPB generally complies with portions of the Dodd-Frank Act requiring it to gauge the impact of any of its proposed rules on small business, but some of its interim policies and procedures should be enhanced, according to a new report from the agency’s Office of Inspector General. At issue is Section 1100G of Dodd-Frank, which requires the CFPB to assess the impact of any proposed rule on the cost of credit for small business entities through regulatory flexibility analyses, and to convene panels to seek direct input from small business entities prior to issuing certain rules. “Overall, we found that the CFPB complied with the provisions of section 1100G of the Dodd-Frank Act as well as the two interim policies and procedures issued by the CFPB’s Division of Research, Markets and Regulations,” the report ...


October 13, 2014 - Inside the CFPB

Dodd-Frank Rules Uniquely Affecting Manufactured Housing

The CFPB issued a report earlier this month finding, more often than not, that owners of manufactured homes pay higher interest rates for their loans than borrowers whose homes were built onsite. “In 2012, about 68 percent of all manufactured-housing purchase loans were considered ‘higher-priced mortgage loans,’ compared with only 3 percent of site-built home loans,” the CFPB said. Two out of three manufactured-home owners eligible for mortgages finance with more expensive personal property (“chattel”) loans instead. That’s good and bad. On the one hand, chattel loans have lower origination costs and quick closing timelines, as the bureau noted. But on the other hand, they also have “significantly fewer consumer protections than mortgage loans,” the bureau said. For example, only ...


October 13, 2014 - Inside the CFPB

Realtors’ Group Goes to Bat for ‘Mini-Corr’ Lending Channels

The National Association of Realtors recently urged the CFPB not to unnecessarily restrict consumer access to credit by effectively eliminating the so-called “mini correspondent” lending channel. In a letter to the CFPB, the NAR said it supports efforts to prevent evasion of the bureau’s ability-to-repay/qualified mortgage rules. However, it also supports access and choice in credit provider channels, including affiliated business arrangements and joint ventures properly established under the Real Estate Settlement Procedures Act. “These arrangements are most often entered into to provide greater service to consumers,” said the NAR. “Capital constraints of small but growing businesses often govern the type of arrangement that is entered into. Mini correspondents are one such arrangement.” The trade group ...


October 13, 2014 - Inside the CFPB

CFPB Eyeballing Checking Account Screening, Special Credit Reports

The CFPB is scrutinizing the way financial institutions screen potential new checking account customers, including the specialty credit reports they use to evaluate them, the agency revealed at a public forum last week. “The bureau has three areas of concern. First, we are concerned about the information accuracy of these reports,” said CFPB Director Richard Cordray. “Second, we are concerned about people’s ability to access these reports and dispute any incorrect information they may find. Third, we are concerned about the ways in which these reports are being used.” The CFPB identified some possible steps to improve checking account screening policies and practices, such as increasing the accuracy of data furnished to and reported by consumer reporting agencies. The bureau also expressed interest in identifying how ...


October 13, 2014 - Inside the CFPB

Consumer Complaints Again Fall By Double Digits in Third Quarter

After a rough first quarter in which consumer complaints filed with the CFPB rose by 29.1 percent (mostly because of credit reports), the second and the third quarters have seen double-digit declines, 14.8 percent in 2Q14 and 14.6 percent in 3Q14, according to a new analysis by Inside the CFPB. Of the nine categories of gripes tracked, seven showed declines, all by double digits, with the money transfer sector leading the drop-off, down 28.4 percent from the second quarter. Debt collection criticisms slid 20.5 percent, followed by mortgages (17.6 percent), bank accounts (15.4 percent), student loans (14.5 percent), credit cards (12.1 percent) and credit reports (10.0 percent). The two rough spots were grievances about consumer loans, which were up 28.4 percent [with two exclusive data charts] ...


October 13, 2014 - Inside the CFPB

Disparate Impact Returns to SCOTUS; Will CFPB Weigh In?

Earlier this month, the Supreme Court of the United States agreed to accept Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc., the latest legal dispute over disparate impact to reach it corridors. However, a ruling by the SCOTUS could extend beyond the mortgage space. The TDHCA distributes the tax credits associated with the Low-Income Housing Tax Credit Program throughout Texas. The ICP is a 501(c)(3) non-profit that works to place low-income, mostly African-American Section 8 tenants in Dallas’s more affluent and largely white suburban neighborhoods. The ICP brought suit against TDHCA back in 2008, accusing the housing agency of disproportionately authorizing LIHTCs for affordable housing developments in largely minority ...


October 13, 2014 - Inside the CFPB

Legal Experts Vary in Opinion of Bureau’s UDAAP Action on Flagstar

The CFPB’s recent, high-profile $35 million enforcement action against Flagstar Bank over its mortgage servicing practices got the attention not only of the industry but also many legal professionals serving it. One industry legal expert, speaking off the record, said it was heavy handed, at best, for the CFPB to use its authority over unfair, deceptive or abusive acts or practices (UDAAP) to assert legal claims over activities that took place prior to its servicing rule. “It somewhat makes a mockery of the whole rulemaking process by effectively implementing regulations before the regulations were even proposed, much less finalized,” he said. “It also reinforces the fear of making loans to any borrower who presents any risk of default because there ...


October 13, 2014 - Inside the CFPB

MSAs at Issue in Action Brought Against Michigan Title Company

Marketing services agreements (MSAs) continue to be a flashpoint for conflict between title companies and the CFPB under the Real Estate Settlement Procedures Act. Late last month, the bureau ordered Lighthouse Title, a Michigan title insurance agency, to pay $200,000 for entering into what the CFPB characterized as illegal quid pro quo referral agreements, in violation of RESPA. According to the bureau, Lighthouse Title entered into MSAs with various companies, such as real estate brokers, with the understanding that the companies would refer mortgage closing and title insurance business to Lighthouse. “The agreements made it appear as if the payments would be based on marketing services the companies were supposed to provide to Lighthouse,” the CFPB said. “However, Lighthouse actually ...


October 13, 2014 - Inside the CFPB

CFPB Brings $3.1M Action Against M&T Over Checking Accounts

A routine supervisory examination ultimately led the CFPB to bring a $3.1 million enforcement action against M&T Bank because of its allegedly deceptive advertising practices for checking accounts. The bureau accused M&T Bank, based in Buffalo, NY, of luring in consumers with promises of “no strings attached” free checking, without disclosing key eligibility requirements. When consumers failed to meet the requirements, M&T automatically switched them to checking accounts with fees, the CFPB alleged. Under the terms of the consent order, announced last week, the bank will provide $2.9 million in refunds to approximately 59,000 consumers (roughly $49.15 each), and will pay a $200,000 penalty for the alleged violations. According to the consent order, during the period between Jan. 1, 2009, ...


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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