MetLife’s bank division has become the first major lender to say it plans to exit the mortgage business because of increased regulation. MetLife Bank announced it put its Home Loans unit up for sale earlier this month, a move that followed its decision to explore the sale of its depository business. “Today’s uncertain marketplace and regulatory environment require a tremendous amount of resources – both in terms of people and capital – to effectively compete in and profitably grow the forward mortgage business,” the company said. “Doing so would divert these resources away from MetLife’s primary focus on its global insurance and employee benefits businesses.”

The Consumer Financial Protection Bureau last week began testing a revised design of its integrated consumer mortgage disclosure prototypes with consumers and industry in the Albuquerque, NM, area, the agency revealed. The latest pair, dubbed “Pinyon” and “Yucca,” represent a fixed‐rate and an adjustable‐rate mortgage, respectively. Both forms include sections on loan terms, projected payments, closing costs, calculating settlement costs, calculating cash to close, comparisons, other considerations and verify receipt. But the Yucca version adds an adjustable interest rate table.

A number of colleagues of former Ohio Attorney General Richard Cordray made a media and lobbying blitz last week, writing Senate leadership to urge their comrade be confirmed as the director of the Consumer Financial Protection Bureau, and holding a conference call with members of the press to highlight their appeal. Writing Senate Majority Leader Harry Reid, D-NV, and Senate Minority Leader Mitch McConnell, R-KY, many members of the National Association of Attorneys General went to bat for one of their own, calling him “both brilliant and balanced.”

Alabama. Last week, in Reed v. Chase Home Finance LLC, the U.S. District Court for the Southern District of Alabama rejected a mortgage lender defendant's motion to dismiss or amend a putative class action alleging a violation of the Truth in Lending Act. Plaintiff Reed alleged defendant Chase Home Finance failed to provide the borrower with notice that it was a new creditor as required by TILA Section 1641(g) when it was assigned an ownership interest in plaintiff's mortgage and note. The defendant argued that plaintiff’s position that the note was assigned to defendant, explicitly pled in the complaint, has to be “supported by factual material rendering the assertion plausible.”

Federal Housing Finance Agency. HARP Changes Announced. With a chorus growing inside the Washington, DC, beltway that the Obama administration must do more to help struggling homeowners refinance, the Federal Housing Finance Agency this week announced a number of changes to the Home Affordable Refinance Program in an effort to attract more eligible homeowners who can benefit from refinancing their mortgages. HARP is the only refinance program that enables underwater borrowers to take advantage of low interest rates and other refinancing benefits that would otherwise be beyond their reach in a more normal market environment. This program will continue to be available to borrowers with loans sold to Fannie or Freddie on or before May 31, 2009, with current loan-to-value ratios above 80 percent.

The U.S. Senate voted late last week to approve an amendment to a federal spending bill that was offered by Sens. Bob Menendez, D-NJ, and Johnny Isakson, R-GA, to reinstate the higher loan limits for Fannie Mae, Freddie Mac and the Federal Housing Administration that expired on Sept. 30. Those limits dropped to $625,500 in a number of high-cost markets on Oct. 1, and would be restored to $729,750 through December 2013 under the Menendez/Isakson amendment. The National Association of Home Builders was pleased.

Not much has changed since the 2010 edition of the ABS East Conference, and the outlook for 2012 is hardly encouraging, but conference sponsor Information Management Network drew about 30 percent more participants to its annual industry gathering in Miami Beach this week. As one attendee put it, everybody at the conference was down on the market, yet nobody is buying and nobody is selling. Regulatory uncertainty continues to stymie securitization activity. The federal government still dominates the U.S. mortgage market, with little change in sight. Tepid economic growth is generating lackluster demand for...

The status quo in the MBS market – suffocating domination by Fannie Mae, Freddie Mac and Ginnie Mae – isn’t likely to change for the next five years, or longer, according to industry experts at this week’s ABS East conference in Miami sponsored by Information Management Network. Although a number of industry groups have offered proposals similar to the third option outlined by the Treasury Department in its reform white paper – a more competitive market of issuers backed by private capital that issue MBS with backstop guarantees from the government – those proposals are far from uniform, said Laurie Goodman, senior managing director at...

Federal regulators ran into such a buzz saw of opposition on their proposed implementation of Dodd-Frank Act risk-retention rules for securitization that they may start over again with a new proposed rule, according to industry experts at the ABS East conference sponsored by Information Management Network. The market would be better off if regulators abandoned the risk-retention rule altogether, said Steven Kudenholdt, co-chair of capital markets practice at SNR Denton. He doubts that regulators can get it right, and the proposal has been a “distraction” for a market that’s still in distress. Throwing in...