Fannie Mae and Freddie Mac in the second half of last year saw a rapid growth of loans with high debt-to-income ratios, thanks in part to the so-called GSE patch. The government-sponsored enterprises enjoy a special exemption under the qualified mortgage rule of the Consumer Financial Protection Bureau. To achieve QM status, a loan must have a DTI ratio of 43 percent or less, but if a mortgage is sold to Fannie or Freddie, DTI ratios can be higher. In the second half of 2017, loans with DTI ratios ...
If the CFPB wants to make the civil investigative demand process less painful for companies, it might consider installing a high-level approval process before a CID even gets off the ground, according to another government agency – the Federal Trade Commission. The FTC late last week filed a comment letter on the CFPB’s request for information on CIDs, suggesting ways the agency can relieve the burden on investigative demand recipients. Mortgage lenders that have received one or more CIDs have ...
The CFPB late this month issued two more requests for information – one on the its inherited regulations, and another on bureau guidance and implementation support. Under the Dodd-Frank Act, the agency has the rulemaking authority for federal consumer financial laws previously vested in certain other federal agencies. The bureau is considering whether it should amend the regulations or exercise the rulemaking authorities it inherited. This RFI solicits public input on all aspects of ...
Acting CFPB Director Mick Mulvaney has reportedly dropped another payday lending case, giving new ammunition to his critics. According to a Reuters report, five people with direct knowledge of the matter said the CFPB under the leadership of Mulvaney decided not to go after National Credit Adjusters and is pondering whether to end cases against three other payday lenders. The agency declined to comment on the Reuters report. Mulvaney said in February the bureau won’t spend a lot of energy ...
CFPB Upgrades Mortgage Servicing Small Entity Compliance Guide. The CFPB has released version 3.1 of its mortgage servicing Small Entity Compliance Guide. The SECG provides a summary of the agency’s 2016 final mortgage servicing rule, which goes into effect April 19. The revised guide incorporates an amendment to the rule released earlier this month, which replaces the previous single-billing-cycle exemption with a single-statement exemption for mortgage servicers ... [Includes three briefs]
There aren’t many differences in quality when using an appraisal management company versus an individual appraiser, according to a new staff working paper published this week by the Federal Housing Finance Agency. Appraisal Management Companies (AMC), created to add a layer of oversight to the appraisal process, emerged as key players only after the 2008 housing crisis. The FHFA studied whether there were any systematic quality differences between AMC and non-AMC appraisals and found no evidence of such. Advocates tout AMCs as producing better quality and less biased appraisal reports, which lessens risks to lenders. But others say AMCs offer no quality assurance contribution and argue that their appraisers are less qualified.
There was a significant increase in deliveries to the GSEs of home loans with high debt-to-income ratios during the second half of 2017, according to a new Inside The GSEs analysis of Fannie Mae and Freddie Mac single-family mortgage-backed securities.The two GSEs securitized $52.90 billion of mortgages with DTI ratios ranging from 46 percent to 50 percent over the last six months of the year. That was up 72.6 percent from the first half of 2017, and the annual total was up 37.6 percent from 2016.
The GSE reform draft expected from Rep. Jeb Hensarling, R-TX, likely won’t see the light of day until sometime in mid-April, according to industry lobbyists and trade officials tracking its progress.Meanwhile, it’s safe to say some degree of apathy is setting in for the simple reason that even if a draft appears, few believe it will be bipartisan in nature, which means it will never become law, at least not in this Congress. “No one cares,” said one senior trade group official who spoke under the condition he not be identified.This official said his focus is now squarely on regulatory relief and reforming certain aspects of the...
Fannie Mae and Freddie Mac both have initiatives that link homebuyer education counselors to their automated underwriting tools to better determine a buyer’s homeownership readiness. The Federal Housing Finance Agency this week released its 2017 Scorecard Progress Report detailing work on strategic goals for the duo. Under the goal of maintaining credit access, the FHFA said the GSEs have been exploring ways to improve the effectiveness of pre-purchase and early delinquency counseling.Last month, Fannie, the Housing Partnership Network and other housing counseling agencies announced plans to develop a new client case management system. This system will connect Fannie’s automated underwriting products, Desktop Originator and Desktop Underwriter, to housing counseling agencies.
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