The CFPB recently updated its Small Entity Compliance Guide to the ability‐to‐repay/qualified mortgage rule, which takes effect in January. The updated guide reflects clarifications and changes – formally known as the June 2013 ATR/QM concurrent final rule, the July 2013 final rule, and the October 2013 final rule – made to the rule since it was issued in January 2013. Among the most notable changes in the October 2013 final rule reflected in the updated guide is the exclusion of compensation that is paid by a retailer of...
The Federal Reserve Office of Inspector General – the IG for the CFPB – completed an evaluation of the bureau’s fiscal year 2013 budget and concluded the CFPB could improve some of its budget-related practices.“Overall, our evaluation showed that the CFPB has a budget process in place to facilitate the achievement of its goals and performance objectives, including transparency to the public,” the OIG said. “However, we noted opportunities for the CFPB to enhance its practices related to preparing funding requests and posting budget...
D.C. Federal Court Deep-Sixes Morgan Drexen Lawsuit Against CFPB. The federal district court in Washington, DC, has denied without prejudice the lawsuit Morgan Drexen, a legal services firm, and attorney Kimberly Pisinski filed against the CFPB, which asserted that the bureau’s structure was unconstitutional because it violated the U.S. Constitution’s separation of powers. The court concurred with the bureau’s argument that the sought-for injunctive relief was not justified because Morgan Drexen could raise its constitutional...
Ocwen Financial posted record revenues in the third quarter of 2013 that could have been even higher if not for unexpected delays in boarding $42.0 billion in unpaid principal balance on non-agency mortgages from OneWest Bank. Officials at Ocwen wouldn’t reveal the exact cause of the delay. The loans were in non-agency mortgage-backed securities issued by IndyMac, which was taken over by the Federal Deposit Insurance Corp. in 2008 and sold by the FDIC to OneWest in 2009. Ocwen officials said delays ...
Fannie Mae and Freddie Mac each managed to meet its risk-sharing objectives for 2013 without breaking the link to the to-be-announced market, but their regulator wants the government-sponsored enterprises to go beyond the comfort zone. The risk-sharing transactions undertaken by the GSEs this year were very positive, but they relied on the “underlying infrastructure” of Fannie and Freddie MBS, said Edward DeMarco, acting director of the Federal Housing Finance Agency, in a speech at this week’s annual convention of the Mortgage Bankers Association. The Structured Agency Credit Transactions and Connecticut Avenue Securities launched, respectively, by Freddie and Fannie, involved selling relatively small amounts of debt that will pay investors based on the performance of separate MBS pools that were issued and trade in the TBA market. DeMarco wants...
It was pretty much stimulus as usual at the Federal Open Market Committee this week, as the Fed showed not the slightest indication of when it would begin winding down the third phase of its quantitative easing program, known informally as QE3 when it was first unveiled, but increasingly referred to as QE Infinity by those who emphasize its long, drawn-out nature. The status quo results mean the Fed will continue adding to its agency MBS portfolio at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month, and keep plowing its principal payments from its agency debt and MBS holdings back into agency MBS and rolling over maturing Treasury securities at auction. Among those voting in favor of keeping the Fed’s pedal to the metal were...
As leaders of the Senate Banking, Housing and Urban Affairs Committee continue their slow but steady efforts to craft a comprehensive, bipartisan mortgage finance reform bill, experts generally agreed on the necessity for some sort of government backstop for MBS but differed on the details. This week’s hearing was the first of several planned by Committee Chairman Tim Johnson, D-SD, and Ranking Member Mike Crapo, R-ID, as they work to build out their own reform legislation on top of the bill, S. 1217, filed earlier this year by Sens. Bob Corker, R-TN, and Mark Warner, D-VA. Johnson said...
The jumbo MBS market is frozen because investors in the AAA tranches are scarce and still lack confidence in the product following the housing bust and the ensuing tidal wave of litigation swamping issuers and underwriters. According to MBS pioneer Lewis Ranieri, there’s only one to fix the problem: give investors more information on the deals. At a speech this week during the annual convention of the Mortgage Bankers Association, Ranieri, the chairman and CEO of Shellpoint Partners, noted...
A significant number of issuers, lenders, consumer advocates, congressmen and even some investors are urging federal regulators to conform to the definition for qualified residential mortgages with the Consumer Financial Protection Bureau’s standards for qualified mortgages. However, securitization industry participants have raised a number of other concerns about the risk-retention rule required by the Dodd-Frank Act. The DFA requires that certain securitized assets that don’t meet qualification standards should be subject to mandatory risk retention of at least 5 percent by the issuer or lender. Lenders and consumer advocates widely agree...
RSS