The proposal drafted by a senior House Republican that aims to lure private capital into the secondary mortgage market received the general support of industry witnesses at a hearing this week, but Democratic lawmakers say repealing key features of the Dodd-Frank Act would be a non-starter. The Private Mortgage Market Investment Act, drafted but not yet filed by Rep. Scott Garrett, R-NJ., would create a heavily regulated mortgage-backed securities market made up solely of private entities that would function with no federal guarantee at all. Under the bill, the Federal Housing...

The dust is starting to settle over an increasingly complex landscape of agency loan limits for 2012 that features 83 defined metro markets where the FHA can insure loans that are too big to be financed by Fannie Mae or Freddie Mac. The Department of Housing and Urban Development this week released guidance on FHA loan limits that changed twice in calendar 2011. On Oct. 1, a new set of FHA loan limits based on a $625,500 maximum went into effect, and they will apply to loans with FHA case numbers assigned between that date and Nov. 17, said...(Includes one data chart)

President Barack Obama and his Democrat allies on Capitol Hill initiated a multi-prong attack against their Republican opponents this week in an effort to put them on the hook in the 2012 election over their refusal to allow an up-or-down vote on Richard Cordray, the president’s nominee to head the controversial Consumer Financial Protection Bureau. The initiative started this weekend, when the White House released a report and began an accompanying media blitz, warning of the dangers American consumers face in the financial marketplace without a director at the...

The Department of Housing and Urban Development is weighing a number of options, including raising insurance premiums for the FHA Mutual Mortgage Insurance Fund as political concerns grow that the program may need a taxpayer bailout. Testifying before the House Financial Services Committee last week, HUD Secretary Shaun Donovan said he plans to include premium increases and other proposals in the department’s fiscal 2013 budget proposal to bring the FHA’s excess capital reserves back to the required level. Donovan said the FHA continues to evaluate policy options to...

Refinance originations increased sharply during the third quarter, but relatively little of the gain came from the government’s streamlined program for borrowers with little or no equity. Analysts do expect an uptick in activity under the revamped Home Affordable Refinance Program, but many are braced for lackluster results. A total of $192.0 billion of refi loans were originated during the third quarter, up 31.5 percent from the previous three-month period. While that was significantly greater than the 7.3 percent growth in purchase-money...(Includes three data charts)

The House Financial Services Financial Institutions and Consumer Credit Subcommittee plans a hearing on Tuesday, Dec. 6, on the examination relief bill (H.R. 3461) that panel Chairman Shelley Moore Capito, R-WV, and ranking member Carolyn Maloney, D-NY, introduced on Nov. 17. H.R. 3461, among other things, would require more timely examination reports; more information about the facts the agency relied upon to make its exam decisions; and more precise, consistent and understandable classification standards…

Consumer Financial Protection Bureau.Federal Deposit Insurance Corp.Federal Reserve Board.National Credit Union Administration.Office of the Comptroller of the Currency. Big Institutions Under CFPB Oversight. The Consumer Financial Protection Bureau, the Federal Deposit Insurance Corp., the Federal Reserve Board, the National Credit Union Administration and the Office of the Comptroller of the Currency announced together that banks, thrifts and credit unions with more than $10 billion in total assets will be subject to direct CFPB supervision, examination and enforcement with respect to federal consumer financial protection laws.

Massachusetts. In Culhane v. Aurora Loan Services of Nebraska, the United States District Court for the District of Massachusetts late last week granted the defendant’s motion for summary judgment, finding that Aurora, as holder of the plaintiff’s mortgage by assignment from Mortgage Electronic Registration Systems Inc., and as the servicer of the loan, could exercise the statutory power of sale and foreclose under Massachusetts laws. U.S. District Court Judge William G. Young held MERS may serve as the mortgagee as the lender’s nominee, MERS has the authority and right, and may assign mortgages in which it is named as the mortgagee, and such mortgages are valid and enforceable. Further, the judge concluded that, “The court holds that there was no flaw in this process. Under Massachusetts law, MERS lawfully held the legal title to Culhane’s mortgage in trust first for Preferred and subsequently for Deutsche.”

In an unpublicized move, industry sources indicate that the Consumer Financial Protection Bureau told mortgage lending representatives in a Nov. 21 conference call that it has made several systems and process changes related to its mortgage consumer complaint system, in response to a joint comment letter the industry had submitted. Further, the CFPB is said to be already training participating financial institutions on the new system, which is expected to be fully operational any day now. Large banks (those with assets in excess of $10 billion) are to be covered by the system.

A Federal judge in California rejected a servicer’s motion to dismiss a putative class action that accused the servicer of wrongly rejecting a borrower's mortgage modification application and of improperly starting foreclosure proceedings.In Gaudin v. Saxon Mortgage Services Inc., the plaintiff argued that a trial modification plan provided to her by the lender represented a binding contract that required Saxon to evaluate the plaintiff under the Home Affordable Modification Program, and to provide a permanent loan mod, provided all conditions of the trial plan were satisfied.In requesting a dismissal, Saxon argued that the trial plan only required it to evaluate the borrower’s eligibility for a modification, and did not require Saxon to offer a modification.