Regulations

Browse articles from all of our Newsletters related to Regulations.

August 1, 2014 - Inside FHA Lending

Around the Industry

Comment Period for Single Family Handbook Extended. The FHA has extended from July 29 to Aug. 15, 2014 the deadline for submitting feedback on certain sections within the draft Single Family Handbook. Comments are being sought on sections “Doing Business with FHA – FHA Lenders and Mortgagees” and “Quality Control, Oversight and compliance." Both sections’ contents, as well as supporting information, are posted for review and feedback on the SF Drafting Table in the FHA website. Each section’s web page also contains highlights of changes, frequently asked questions (FAQs) and a feedback response worksheet. Julian Castro as New HUD Secretary. Julian Castro was sworn in as the 16th Secretary of the Department of Housing and Urban Development on July 28. He replaces Shaun Donovan, who is now director of the ...


August 1, 2014 - Inside FHA Lending

FHA Requires Retention of Electronic Documents

Beginning Oct. 1, 2014, FHA lenders will be required to retain both electronic and hard copies of originals of foreclosure-related documents in their servicing files as well as paperwork relating to loss-mitigation reviews. Specifically, lenders must keep electronic copies of the servicer’s foreclosure committee recommendation, servicer’s referral notice to a foreclosure attorney, and a copy of the document showing the first legal action necessary to initiate foreclosure. Lenders may use electronic storage methods for all other servicing-related documents where retention of a hard copy or original document is not required, according to the FHA. An electronic copy of the mortgage, mortgage note or deed of trust also must be kept and marked “copy.” Lenders are required to preserve originals and hard copies as specified by regulation. If the note has been lost, ...


August 1, 2014 - Inside FHA Lending

GNMA’s Issuer Approval Process Goes Electronic

Ginnie Mae is taking its issuer approval process online effective Sept. 1, 2014. Entities seeking to become an approved issuer of Ginnie mortgage-backed securities must file their applications electronically through the new Application Connection (AC), which is on the agency’s website. Ginnie Mae will no longer accept paper applications after July 31 as it shifts from the old to the new system. The agency is strongly encouraging potential applicants to complete two required courses through the Ginnie Mae Online University before filling out an application to become a Ginnie Mae MBS issuer. The courses are “Ginnie Mae 101” and “Applying to Ginnie Mae.”The two mandatory courses and the Ginnie Mae Online University provide free training and how to apply for approval, as well as the role and responsibilities of a Ginnie Mae issuer in ...


August 1, 2014 - Inside FHA Lending

GNMA Data Show Wells, Chase Pulled Back

JPMorgan Chase and Wells Fargo have both paid major settlements regarding FHA lending, and both have curtailed their participation in the program, according to a new analysis of Ginnie Mae data by Inside FHA Lending. During the first six months of 2013, Chase accounted for 11.8 percent of the FHA mortgages in newly issued Ginnie mortgage-backed securities. During the first half of 2014, its volume of FHA loans in Ginnie pools was down 75.8 percent from the same period last year, and its share of the market sank more than half, to just 5.1 percent. Jamie Dimon, Chase’s president and CEO, recently questioned why the bank should stay in the FHA business when legal costs are so high. The Ginnie data show it ... [1 chart]


August 1, 2014 - Inside FHA Lending

FHA Delinquency Rates Fall Midway Through 2014

The delinquency rate for residential FHA-insured mortgages fell at the halfway mark of 2014 from the end of the fourth quarter last year, a result of improved overall loan performance, strong credit standards and an improving, albeit slowly, economy, an Inside FHA Lending analysis of agency data suggests. Although the number of FHA lenders included in the analysis has doubled since year-end 2013, delinquency rates in the 30-60 days and 90-day plus buckets appear to be trending downward. As of June 30, FHA delinquencies across the board were down to 13.3 percent from 15.2 percent as of Dec. 30, 2013. The seriously delinquent rate – the percentage of loans that are 90 days or more past due – has dropped to 7.14 percent from 8.08 percent over the same period. The delinquency rate of FHA loans that are at least one payment past due also fell to ... [1 chart]


August 1, 2014 - Inside FHA Lending

FHA Lower Loan Limits Hit Some Markets

The FHA’s widespread reduction in loan limits for 2014 has had a mixed impact on production levels so far this year, according to a new Inside FHA Lending analysis of FHA endorsement data. Through the first four months of 2014, FHA endorsements were down 55.6 percent from the same period last year. But in counties where loan limits were lowered, FHA production was down 57.5 percent from early 2013. In the relatively few counties where loan limits actually increased in 2014, FHA endorsements were also down from a year ago, but by a less severe 47.4 percent. The biggest decline in endorsements has been in refinances, especially FHA-to-FHA refinances. In areas with lowered loan limits, production of these loans has plummeted 87.0 percent, and even areas with raised loan limits saw an 81.1 percent drop in streamlined refis. Purchase-mortgage originations have taken less of a ...


August 1, 2014 - Inside FHA Lending

MRB Penalizes 46 Lenders, 25 Lose FHA Approval

Twenty-five lenders either settled or lost their FHA approval for a full year because they failed to complete their annual recertification requirement, while 21 others were subjected to enforcement actions because their origination or servicing files did not meet FHA requirements. Results from cases heard by the Department of Housing and Urban Development’s Mortgagee Review Board in 2012 and 2013 showed that the board used all enforcement tools at its disposal. Specifically, the board took the following actions: Assessed money penalties of more than $1.5 million; imposed fees, refunds and principal buydowns totaling $1.2 million; required indemnification on 163 FHA-insured loans; withdrew FHA approval of four lenders; suspended the FHA approval of one lender; and placed one lender’s approval on probation. Violations were related to ...


August 1, 2014 - Inside FHA Lending

Lenders Reassess FHA Business, Exposures

For FHA lenders, the idea of a large lender exiting the FHA market and creating opportunities for market share has been overshadowed by concerns regarding liability in the wake of recent fraud-related settlements between lenders and the federal government. Compliance experts said many of their FHA clients are quietly reassessing their FHA business after JPMorgan CEO Jamie Dimon, during a recent earnings call, spoke out loudly against the government’s stringent enforcement actions aimed at recovering “wrongfully” claimed funds. Lenders fear that FHA enforcement actions have taken a turn for the worse in recent years, and that even errors that have nothing to do with loan default are construed as fraud by government prosecutors, resulting in billion-dollar penalties against FHA lenders. Seven major banks, so far, have paid ...


August 1, 2014 - IMFnews

What We’re Hearing: Look Out Below Ocwen? / Look Out Below Nationstar? / Regarding Fannie and Freddie: Did Treasury Know Three Years Ago They Were Turning the Corner? / What Constitutes Being ‘Under Investigation’? / A HUD Official Comes Clean

Next week, Nationstar Mortgage reports its second quarter results. If the company misses the targets set by investment bankers, it could be a blood bath…


August 1, 2014 - Inside MBS & ABS

Buybacks, Indemnifications Will Continue, But There Are Many Coping Strategies Available, Experts Say

Mortgage buybacks and indemnifications may be off their peak in terms of volume, but they are widely expected to continue for the foreseeable future, industry experts said this week. But the good news for the industry is that there are a variety of defenses and coping strategies available, depending on the particulars of a given situation. Amanda Raines, a partner in the Washington, DC, office of the BuckleySandler law firm, told participants of an Inside Mortgage Finance webinar this week that more buybacks are definitely on the way. “The Department of Justice is still making financial fraud a priority,” she said. Raines noted...


August 1, 2014 - Inside MBS & ABS

SEC Notifies S&P of Potential Enforcement Action Concerning Flawed Ratings on Six CMBS Deals

Standard & Poor’s said it is working with the Securities and Exchange Commission to address issues raised by the enforcement staff in connection with botched ratings of several commercial MBS transactions in 2011. A spokesperson for S&P said the rating agency and its parent company, McGraw Hill Financial Inc., are cooperating with the SEC after receipt of a “Wells Notice” last week indicating both companies may soon be the target of a regulatory enforcement action. The SEC notice is...


August 1, 2014 - IMFnews

FHFA May Allow Principal Reduction Only Under ‘Unique’ Circumstances

Has the Federal Housing Finance Agency finally caved on the issue of principal reductions for GSE loans? Not really, but...


August 1, 2014 - Inside MBS & ABS

Servicers to Face Increased Regulatory Scrutiny, Nationstar, Ocwen, et al. Maintaining Cash Levels

Close compliance with the mortgage servicing rules promulgated by the Consumer Financial Protection Bureau will continue to be a critical concern for servicers this year. Analysts at DBRS anticipate intensified scrutiny from the CFPB and a higher likelihood of fines and lawsuits from noncompliance and even technical errors. “DBRS believes that the issuance of the mortgage servicing rules has brought much-needed reform to the servicing industry,” the analysts said in a new report. It was...


August 1, 2014 - Inside MBS & ABS

Non-Agency MBS Investors Continue to Complain About Loan Mods Provisions in Legal Settlements

A trade group representing non-agency MBS investors continues to raise concerns about settlements that give servicers credit for completing loan modifications on mortgages in non-agency MBS. Regulators and others counter that the settlements include protections for the investors, who ultimately benefit from loan mods completed under the settlements. The latest flare-up involves $4.0 billion in loss mitigation actions required of JPMorgan Chase under a recent settlement with federal and state regulators. Last week, the settlement’s monitor credited Chase with $6.31 million in consumer relief under the settlement, with 56 percent of the relief completed on Chase’s own holdings and the remainder completed on loans serviced for others, likely mortgages in non-agency MBS. The settlement prompted...


July 31, 2014 - Inside Mortgage Finance

FHFA May Allow Principal Reduction on Fannie, Freddie Loans Under ‘Unique’ Circumstances

Despite certain “unique” circumstances under which principal might be reduced on a Fannie Mae or Freddie Mac loan, the government-sponsored enterprises’ blanket prohibition on principal reduction remains in place, according to the GSEs’ regulator. The Federal Housing Finance Agency said it remains true to its long-standing policy despite a recent change in management and in the face of continued calls by progressive groups for the FHFA to embrace the use of principal reduction on GSE-backed loans in foreclosure mitigation. “As outlined in FHFA’s 2014 Strategic Plan for the Conservatorships of Fannie Mae and Freddie Mac, FHFA is...


July 31, 2014 - Inside Mortgage Finance

MBA Pushing for Expansion of LO Testing to Bank Employees, Leveling Playing Field with Nonbanks

The Mortgage Bankers Association is pressing regulators and legislators for uniform national requirements for testing of loan originators. In a shift from the bank-friendly issues frequently pursued by the trade group, the MBA is calling for testing requirements that currently apply to nonbanks to be expanded to banks. “MBA believes that all consumers should know that every LO, regardless of what type of lender they work for, meets a demonstrated minimum threshold of knowledge of mortgage lending by passing a test,” the trade group said. The changes sought by the MBA would also allow...


July 31, 2014 - Inside Mortgage Finance

CFPB Aims to Up the Ante Substantially on HMDA Reporting, Proposed Rule Exceeds Dodd-Frank Act

Mortgage lenders face a heftier Home Mortgage Disclosure Act reporting load under a proposed rule issued by the Consumer Financial Protection Bureau that would implement a number of changes mandated by the Dodd-Frank Act – and then some. The bureau views implementation of the Dodd-Frank changes as an opportunity to improve the data collected under HMDA, ease some reporting burden and modernize how the data are collected and reported, the agency said. The CFPB proposed...


July 31, 2014 - IMFnews

Ocwen Shares Get Clobbered; Nonbank Declines to Discuss the ‘Lawsky Situation’

Ocwen watchers have wondered when – or if – New York state will ever bring any formal charges against the company.


July 31, 2014 - IMFnews

BofA Moving Closer to a Deal with DOJ?; Fined $1.27 B in 'Hustle' Case

The Countrywide purchase, completed in the summer of 2008, has cost BofA close to $60 billion in operating losses and legal settlements, depending on how the numbers are counted.


July 31, 2014 - IMFnews

Ocwen Suffers Earnings Decline, Blames ‘Regulatory’ Costs; Will Invest in Non-Agency MBS

The unspoken factor affecting Ocwen's immediate future is Benjamin Lawsky and the New York Department of Financial Services.


July 31, 2014 - IMFnews

MBA Pushing for Expansion of LO Testing to Bank Employees

The changes sought by the MBA would also allow mortgage loan officers at banks to more easily transition to working for nonbanks.


July 30, 2014 - IMFnews

Short Takes: Todd Rundgren Takes on JPM / Jumbo Production Jumps 37% at EverBank / HAMP Processing Slows – A Lot / FHFA’s Watt to Take HARP Road Show to Atlanta / More Executive Changes at Flagstar

Hello, It's Me Again: Your foreclosure notice.


July 30, 2014 - IMFnews

Lenders Will Have More Time to Comment on G-Fees

By extending the comment period, it’s likely that lenders will have at least 120 days before any g-fee hikes are installed.


July 29, 2014 - IMFnews

Short Takes: Two Harbors Hits Market with a New Jumbo MBS / CFPB Targets Great Lakes Area Mortgage Lender / Happy (?) Third Birthday CFPB / Shorts Target Stonegate Mortgage / New Duties for BofA Mortgage Chief

Surprise: Two Harbors is preparing a new jumbo MBS deal. It looks like the bond will be issued in early August...


July 29, 2014 - IMFnews

House Bill Would Delay Basel III and MSR Rules, At Least Temporarily

A formal recorded vote has been requested and at press time was pending before the committee.


July 29, 2014 - IMFnews

Forget Ocwen’s Earnings, Will It Say Anything About the Lawsky Squabble?

“I don’t see how New York can’t ultimately approve Wells’ sale of servicing to Ocwen,” said one analyst. “I think it’s more a matter of when.”


July 28, 2014 - IMFnews

CFPB Finally Issues Its Proposed HMDA Rule

The CFPB also is proposing that financial institutions provide more information about underwriting and pricing.


July 28, 2014 - IMFnews

And the Most ‘Shorted’ Mortgage Stock is: Nationstar; PHH a Close Second

One stock analyst told IMFnews: “He hasn’t charged them [Nationstar] because he [Lawksy] doesn’t have anything.”


July 28, 2014 - IMFnews

Believe It or Not: White House Still Working on Advancing GSE Reform This Year

In mid-July senior White House staff, Treasury officials and the staffers from the Council of Economic Advisers met with representatives from a number of industry trade groups to discuss housing finance reform.


July 25, 2014 - Inside The GSEs

FHFA’s Proposed Mortgage Insurance Rules Tilt Market

New mortgage insurance eligibility rules proposed earlier this month by the Federal Housing Finance Agency appear likely to cause some MIs to tweak their corporate structures and/or to raise additional capital, note industry observers. In its draft Private Mortgage Insurer Eligibility Requirements, the FHFA directed Fannie Mae and Freddie Mac to revise, expand and align their risk management requirements for mortgage insurance counterparties.The updated financial requirements incorporate a new, risk-based framework that ensures that approved insurers have a sufficient level of liquid assets from which to pay claims.


July 25, 2014 - Inside The GSEs

Fannie Prices Its Fourth Risk-Sharing Deal, Largest To Date

Fannie Mae has priced its fourth and largest risk-sharing transaction to date, a more than $2 billion offering pegged to a pool of mortgages acquired last year, the GSE announced last week. The $2.05 billion note is the GSE’s third transaction under its Connecticut Avenue Securities series issued this year. Last year, the Federal Housing Finance Agency ordered both Fannie and Freddie Mac to shrink their role in the U.S. housing market. The latest offering – Series 2014-C03 – included reference loans with original loan-to-value ratios of up to 97 percent and “is consistent with prior transactions.”


July 25, 2014 - Inside Mortgage Trends

Black Knight Tech Adapts to the CFPB’s TRID

Black Knight Financial Services – with a little help from its friends at Wells Fargo Home Mortgage – has repurposed some of its existing technology and combined it with some fresh capabilities to help lenders cope with the Consumer Financial Protection Bureau’s TILA/RESPA integrated disclosure rule. It also will enable mortgage lenders to automate the numerous multi-party processes required to close a loan these days, the company said. The new ...


July 25, 2014 - Inside The GSEs

Industry Groups Dismayed With IG Report on Nonbank Risk to GSEs

Industry trade groups are lining up to express their dismay at a recent audit issued by the Inspector General of the Federal Housing Finance Agency, which said both good and bad things about the risk nonbanks and small lenders pose to Fannie Mae and Freddie Mac. The latest trade group missive was issued late this week by the Community Home Lenders Association: “By implication, the IG report seems to be pushing for more loans to be done at the big TBTF [too big to fail] banks by stating that small nonbank lenders are riskier for the enterprises and with little or no evidence to support the claim.”


July 25, 2014 - IMFnews

What We’re Hearing: Why Doesn’t JPM Just Get Out of Mortgages Entirely? / Down, Down, Down: JPM’s Ginnie Share / NAR’s Yun: CFPB Might Want to Investigate FHA / Do LOs Exaggerate Their Production Numbers? / Zillow and Trulia: A Match Made in Money-Losing Heaven

NAR Chief Economist Lawrence Yun: “The way they have raised premiums and fees – the way I view it and what I hear from Realtors – is essentially they are ripping off consumers. It’s almost as if HUD needs to be turned over to the CFPB to be investigated"...


July 25, 2014 - IMFnews

Buried in the FHFA IG Report: Fannie and Freddie Will Conduct More ‘Operational Reviews’

Nationstar Mortgage and Walter Investment are the only seller/servicers (counterparties) mentioned by name in the FHFA IG report on nonbank risk.


July 24, 2014 - Inside MBS & ABS

Freddie’s H-Pools Backed By Modified Mortgages Seen as Good Investment to Avoid Prepayment Risk

MBS from Freddie Mac backed by modified mortgages offer investors protection from prepayment risk in an environment in which interest rates are expected to climb, according to analysts at Barclays Capital. The analysts said Freddie’s H-pools are particularly attractive, as the loans in the deals have been restructured under the Home Affordable Modification Program. Slightly more than $1.0 billion in H-pools have been issued, with the most recent activity in October. Barclays noted that Freddie could significantly increase its issuance of H-pools as the government-sponsored enterprise has accumulated a substantial amount of modified mortgages in its retained portfolio in recent years. Freddie had...


July 24, 2014 - IMFnews

Short Takes: A Kinder and Gentler FHA? / A Rapidly Improving MMIF? / CFPB and FTC Target Loan Modification Scammers / A Continuing Decline in Underwater Homes / MGIC CEO Culver to Retire

Or perhaps the FHA is concerned that the private mortgage insurance industry will continue to gain market share at its expense?


July 24, 2014 - Inside Mortgage Finance

HUD: Other Lenders Will Fill in If Chase Bolts FHA; But Agency Working on Ways to Mitigate Lender Concerns

If JPMorgan Chase were to exit the FHA program, plenty of other residential lenders would pick up the slack, according to officials at the Department of Housing and Urban Development, who in a press briefing this week indicated the agency is hardly worried about such a development. “There are plenty of other lenders,” said one senior HUD official. “Their [JPM’s] volume has dropped. Quicken is now number one.” During an earnings call last week, JPMorgan CEO Jamie Dimon questioned...


July 24, 2014 - Inside Mortgage Finance

Consumer Narratives Would be Added to Complaint Database Under CFPB Proposal as Industry Frets

Mortgage lenders and other financial services providers are up in arms about a new Consumer Financial Protection Bureau proposal to allow consumers to post narrative complaints about companies in the agency’s online complaint database. The bureau wants to expand the current database to include “unstructured consumer complaint narrative data.” A consumer who submits a complaint will be given the opportunity to check a consent box giving the bureau permission to publish his or her narrative. Where the consumer provides consent to publish the narrative, the related company will be given...


July 24, 2014 - IMFnews

JPMorgan Accused of Violating CFPB’s Mortgage Servicing Rules

In response to the suit, a Chase spokesman said, “We approved Ms. Wasko for a loan modification in 2010, but she never accepted it."


July 24, 2014 - IMFnews

10 Trade and Consumer Groups Tell FHFA: Please, No Increases in G-Fees or LLPAs

The 10 groups question “whether it is appropriate for the GSEs to target private sector returns while in conservatorship.”


July 24, 2014 - IMFnews

HUD: Other Lenders Will Fill the Void if JPMorgan Bolts FHA

Are officials at HUD worried that JPM's Jamie Dimon may follow through on his threat to leave the FHA program? Not in the least.


July 23, 2014 - IMFnews

Short Takes: More Gripes About the FHFA IG Report on Nonbanks / Will the MI Biz Shift back to FHA? / GSE REO Contractor Accused of Discrimination / Ellie Mae Signs Fat Lease / A Rise in Mortgage Applications but Can it Last?

One critic of the report on nonbank risk had this to say: “It’s just ridiculous what they [the IG] get away with. There’s risk in every business. Don’t they get it?”


July 23, 2014 - IMFnews

CFPB Proposes Adding Unvetted Customer Narratives to Complaint Database

Mortgage industry representatives are quite leery about the CFPB proposal. The comment period ends August 22.


July 22, 2014 - IMFnews

Short Takes: Will CIT be a Player in Mortgages? / Another New CEO for Union Mortgage / Credit Suisse Buying NPLs from Astoria / JPM Gets Some Credit / IMA in Market with $1B of MSRs

Union Mortgage has been losing some of its top executives over the past year. A few months back, its president and CEO Robert Eastep departed for Stonegate Mortgage…


July 22, 2014 - IMFnews

How Can the CFPB Even Enforce Its ‘Mini-Corr’ Guidance?

“The entire subject of ‘mini-corr’ and the CFPB’s interpretation is the result of a witch hunt perpetrated by one of the lawyers that moved from the Federal Reserve Board,” said one disgruntled broker.


July 22, 2014 - IMFnews

HUD Launches Audit of BB&T, Bank Establishes Reserves Just in Case

The audit is being conducted by HUD’s Office of Inspector General to assess the bank’s compliance with FHA requirements related to the origination of loans insured by the agency.


July 22, 2014 - IMFnews

Most Mortgage Complaints Filed with CFPB Decline – Except for Servicing

Criticisms about servicing seem to be stubbornly resistant to much improvement, however, hovering in the 3,000 to 4,000 range for the last six quarters.


July 21, 2014 - Inside the CFPB

Worth Noting/Looking Ahead/Vendor Update

Bureau Moves to Ensure Equal Treatment for Same-Sex Marrieds. The CFPB is synchronizing its internal policies with the U.S. Supreme Court decision in United States v. Windsor, striking down as unconstitutional Section 3 of the Defense of Marriage Act, which holds that the word ‘marriage’ means only a legal union between one man and one woman. According to a staff memorandum from CFPB Director Richard Cordray, the CFPB will regard a person who is married under the laws of any jurisdiction to be married nationwide for purposes of the federal statutes and regulations under the bureau’s jurisdiction regardless of the person’s place of residency. However, consistent with other federal regulatory agencies, the bureau will not regard persons who are joined ...


July 21, 2014 - Inside the CFPB

Dodd-Frank at Four: $21 Billion in Compliance Costs – and Counting

As of July 21, 2014, the Dodd-Frank Wall Street Reform and Consumer Protection Act is now four years old and the CFPB three, after imposing more than $21 billion in costs and 60.7 million paperwork burden hours, according to a new study by American Action Forum, which identifies itself as a center-right policy institute. “As time passes, the law becomes more expensive as regulatory agencies like the CFPB and the Federal Housing Finance Agency grow with the mission to implement burdensome rules,” the report said. “Meanwhile, small financial services firms continue to struggle as the law restricts the availability of financial products. With about one-quarter of the law still left to implement, one can only expect the costs to continue ...


Poll

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

Plans to enter this market over the next 12 months.
Is already making home equity loans and hopes to increase the offerings.
Is in the market but don’t expect much growth.
Is not making second liens and has no plans to do so.

vote to see results
Housing Pulse