After months of hearing mortgage banking and real estate executives gripe about problems tied to the TRID integrated disclosure rule, the CFPB last week signaled its intention to clarify the controversial measure, which became effective in early October. According to a letter from CFPB Director Richard Cordray to industry trade groups, the agency will issue new rulemaking tied to the TRID disclosure regime that will provide greater certainty and clarity. Cordray – who has been lambasted by the industry about the integrated disclosure rule for months – noted in the letter: “We recognize that the implementation of the Know Before You Owe rule poses many operational challenges. We also recognize that implementation is particularly challenging because of the diversity of the participants ...
Both the mortgage industry and the CFPB itself may have been caught a bit flat-footed when it came to fully grasping the significance and complexity of the bureau’s TRID integrated disclosure rule, according to one of the individuals intimately associated with drafting the controversial regulation. “TRID is a huge rule, about 1,900 pages of extremely detailed twists and turns. It affects every single aspect of the origination and closing process, as well as liability for lenders and the secondary market,” former bureau official Richard Horn, now an attorney in private practice, told Inside the CFPB. “I think many in the industry had to play catch up these past seven months, trying to grasp the far reaches and complexity of this ...
Over at Freddie Mac, the GSE did $10.8 billion in issuance for the first quarter, mostly in its K-deal program, along with its small balance program, otherwise known as “SB deals.”
An estimated $24.52 billion of GSE loans were delivered into MBS during 1Q16 with the servicing rights being taken over by a servicer not affiliated with the loan seller.
The Federal Housing Finance Agency, along with five other agencies, is seeking comment on a proposed rule focused on compensating employees via incentives. It would prohibit incentive-based payment arrangements that the agencies determine encourage inappropriate risks by providing excessive compensation or compensation that could lead to material financial loss. It requires those financial institutions to disclose any information concerning incentive-based pay to the appropriate financial regulator. If finalized, FHFA’s proposed rule would apply to Fannie Mae, Freddie Mac and the Federal Home Loan Banks. It will also replace a proposed rule published by the joint agencies in April 2011.
The Federal Housing Finance Agency issued guidance stating that a Federal Home Loan Bank can make changes to a previously approved internal market risk model only after properly notifying FHFA. Each of the model change notifications should include the signatures of a bank officer and be sent to the manager, risk model branch, FHFA division of regulation. Depending on the conditions, whether or not the model plans to supplement or replace another model, the FHFA can be notified in one of two ways. When implementing a significant model change without replacing an existing market risk model, the bank must meet four conditions.
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