Heightened scrutiny by the CFPB of potentially discriminatory auto lending practices is probably going to end up raising lender regulatory costs in 2014, according to analysts at Fitch Ratings.“Fitch believes the CFPB is currently in discussions with various auto finance players, including banks, captive finance arms of auto manufacturers and independent finance companies regarding their lending practices,” the rating agency said. The regulatory actions have to do with the auto lending industry’s widespread practice of making...

The qualified mortgage is here, and while the rotation of the earth has yet to slow, there are still several areas of the regulation that are not crystal clear to much of the industry, including some questions having to do with Fannie Mae and Freddie Mac purchases of mortgages being originated under the new regime. For instance, “If lenders bake the loan-level price adjustments into the interest rate, are they allowed to show those adjustments to the originator? If they show them, will the CFPB count them into the points and fees?” asked Tammy...

The Federal Reserve Office of Inspector General has completed its audit of the CFPB’s consumer financial Civil Penalty Fund, giving the bureau a passing grade. “Overall, our audit determined that the CFPB has been implementing internal controls for the CPF since June 2012,” said the OIG, citing the bureau’s development of the CPF rule and various internal procedures. “During our audit of the CPF, which was conducted from June 2013 to November 2013, we identified an opportunity to improve the controls developed to implement the CPF,” the OIG said...

Public Comments on the Mortgage Closing Process are Due Feb. 7. Early in January, the CFPB solicited consumer comments on the mortgage closing process, specifically asking consumers to identify the key “pain points” associated with mortgage closing and how they might by addressed by market innovations and technology. The bureau specifically said it wanted comments on how to increase the use of technology and promote inventions that encourage a more streamlined mortgage closing process while also improving consumer knowledge. The CFPB...

Total FHA delinquencies rose slightly while the percentage of seriously delinquent loans remained flat in the fourth quarter of 2013, according to an Inside FHA Lending analysis of FHA servicing data. Data showed delinquencies of 90 days or more remained unchanged at 8.1 percent from the previous quarter even as total FHA delinquencies increased a bit to 15.2 percent from 15.1 quarter over quarter. The share of loans that are 30-60 days behind on their payment also increased to 7.1 percent from 6.9 percent over the same period. As of Dec. 31, FHA servicers had a combined ... [1 chart]

“It’s a utility bill refi,” said Kristian Hanelt, a senior vice president of renewable capital markets at Clean Power Finance, which provides financial services to the solar industry.

The Federal Reserve’s Open Market Committee fulfilled investor expectations this week by voting to reduce its support of the financial markets by another $10 billion overall, starting next month. That will reduce its targeted monthly increase in its agency MBS portfolio from $35 billion to “just” $30 billion. With new production of agency MBS falling more quickly than the central bank’s targeted purchases, the Fed may actually be taking a larger chunk of the market. When the Fed announced a $5 billion per month reduction in its MBS growth target in November, actual agency MBS issuance declined by more than twice as much, $11.3 billion, from the previous month. The FOMC said...[Includes one data chart]

Only a handful of FIRREA cases were filed in the first 20 years after enactment of the statute. In the last two years, however, the government has aggressively used FIRREA to target financial institutions for activities related to the origination, rating, securitization and servicing of residential mortgages.

Wall Street generated $165.66 billion of new non-mortgage ABS during 2013, a sturdy 12.7 percent increase over the previous year and the best annual production volume since 2008, according to a new analysis and ranking by Inside MBS & ABS. ABS issuance fell off in the fourth quarter of 2013, dropping 10.4 percent from the third quarter, as all the major asset classes saw slowing volume. The $37.82 billion of new ABS generated in the final three months of 2013 was slightly below the second quarter, but it was above the level set in the third and fourth quarters of 2012. Vehicle-finance ABS turned in...[Includes two data charts]

Investors in non-agency MBS continue to push for increased transparency on both vintage securities and new issuance. Issuers suggest that they want to provide additional information to investors but costs and regulatory issues have prevented adequate communication. A significant number of investors attending the ABS Vegas conference last week said bondholder communication on non-agency MBS is rarely adequate. The conference was sponsored by the Structured Finance Industry Group and Information Management Network. Bill Moliski, a managing director at SG Capital, an investment management firm, has...