Six months into the new ability-to-repay rule, industry compliance professionals seem confident in the efforts they’ve made to get ready for the regulation and acknowledge that the sky hasn’t fallen – yet. But it’s far too early to draw definitive conclusions about the success of the rule itself and its overall effect upon the market, according to experts at the American Bankers Association’s 2014 regulatory compliance conference in New Orleans this week. “Clearly, the new rules have increased the bank’s risk profile and have put pressure on the decentralized operating market,” said Cheryl Snyder, head of retail banking for Park National Bank, the lead bank in a $6 billion bank holding company headquartered in Newark, OH, and an originator of qualified mortgages and non-QM loans. Citing the lending industry’s technology preparations in the much-hyped run-up to the year 2000, Snyder told...
Meaningful housing finance reform that would include “fixing” Fannie Mae and Freddie Mac, rather than euthanizing them outright, is still possible in 2014 and doesn’t require Congressional action, according to an expert speaking on the topic this week on Capitol Hill. Speaking at a government-sponsored enterprise forum sponsored by Investors Unite, Joshua Rosner, managing director at Graham Fisher & Co., said that GSE reform should consist of repurposing rather than eliminating Fannie and Freddie. “We shouldn’t reinvent...
A potential conflict over funding of the FHA’s loan-quality improvement efforts and, possibly, of a pilot program that seeks to make broader use of housing counseling in FHA origination and servicing may be brewing as both the House and Senate moved towards finalizing their separate versions of fiscal 2015 appropriations for the Department of Housing and Urban Development. Last week, the Senate Appropriations Committee voted 29 to 1 to pass S. 2438, its FY 2015 HUD funding bill. Notably, it contains a provision authorizing HUD to charge and collect a new fee from FHA lenders in an amount of no more than 4 basis points of the original principal balance of mortgages originated by the lender that were insured during the previous fiscal year. According to the Senate provision, the new fee would be used...
Industry participants have raised a number of concerns about a proposed rule issued in April that would implement minimum requirements for appraisal management companies, which are intermediaries between appraisers and lenders. Federal regulators in April issued a proposed rule that would implement AMC provisions mandated by the Dodd-Frank Act, including a ban on AMCs providing appraisal management services for federally related transactions in states that haven’t established regulations for AMCs. The Consumer Mortgage Coalition said...
Industry groups are supportive of a proposal by the Consumer Financial Protection Bureau to provide a reasonable cure for inadvertent overages in points and fees on qualified mortgages, but they disagree over the appropriate length of the cure period and other issues. The proposed CFPB rule would amend certain mortgage rules issued last year under the Truth in Lending Act. It would provide a limited cure mechanism for QM loans that exceed the points-and-fees limit for such mortgages and provide an alternative “small servicer” definition for nonprofit groups that meet certain requirements. Also, the bureau has proposed to amend the current exemption from the ability-to-repay rule for qualified nonprofits. In addition to the specific proposals, the CFPB sought...
The Federal Housing Finance Agency is set to take a comprehensive view of the impact any changes to the government-sponsored enterprises’ guaranty fees would have on the MBS market. Late last week, the regulator issued a “request for input” on the g-fees charged by Fannie Mae and Freddie Mac, prompting speculation that any changes to the fees won’t be implemented until 2015. The FHFA noted that the GSEs’ g-fees have increased from an average of 22 basis points in 2009 to 55 bps in 2013. The increases have been prompted by the FHFA along with Congress and changes made by the GSEs. Because of loan-level pricing adjustments – which in nearly all cases are rolled into the mortgage coupon – g-fees vary...[Includes one data chart]
It looks like the Securities and Exchange Commission has yielded to the majority view of the other federal regulators and agreed to a simplified qualified residential mortgage definition that could make it easier for issuers of non-agency MBS. The SEC dropped its insistence on a downpayment requirement, according to an account this week in the Wall Street Journal. In exchange, the other federal agencies involved in the rulemaking agreed to revisit the QRM issue two years after the final risk-retention rule goes into effect. Deals backed...
WinWater Home Mortgage, a New York-based conduit managed by several Wall Street veterans, is ready to market its first jumbo MBS, but has also made inquiries about non-prime transactions as well, according to traders and lenders familiar with the company. WinWater plans to issue a $249.47 million jumbo MBS, according to a presale report released late this week by Kroll Bond Rating Agency. Not only is the bond WinWater’s first deal, it represents the first new issuance in the sector since late April when Credit Suisse came to market. The average combined loan-to-value ratio on the deal is...
RSS