The conservator of Fannie Mae and Freddie Mac has been lax in its oversight of business decisions made by the two government-sponsored enterprises and lacks a formal verification process to keep the two companies honest, according to a new audit by the Federal Housing Finance Agency’s official watchdog. The FHFA’s Office of Inspector General found numerous instances where the FHFA didn’t ask the companies and the two GSEs didn’t tell the agency about significant business decisions, even when such approval was required. “FHFA-OIG found that FHFA did not require...

Single-family mortgage securitization by Fannie Mae and Freddie Mac increased sharply during the third quarter of 2012, according to a new Inside Mortgage Finance ranking and analysis. New production of mortgage-backed securities by the two government-sponsored enterprises rose 22.4 percent from the second quarter, driven by a hefty 19.4 percent increase in refinance business. Refinance loans accounted for 76.9 percent of GSE securitization during the period, and the dollar volume of refi loan sales rose 19.4 percent from the second quarter. Fannie posted...[Includes three data charts]

Low house prices remained the biggest obstacle to borrowers being approved for mortgage credit in 2011, according to a new Inside the CFPB analysis of Home Mortgage Disclosure Act data. Some 23.4 percent of application rejections in 2011 were because of insufficient collateral, roughly even with the 23.8 percent rate back in 2010. Although there was some firming up of house prices in a number of markets last year, the overall market continued to be under significant stress. Low house values were a bigger...

Mortgage lending oversight by the CFPB and the states will likely be far more interrelated and integrated in the future than might be expected – this in response to the rulemaking and enforcement jurisdictional shake out that occurred as a result of the Dodd-Frank Act, a top regulator told industry participants at a recent mortgage lending conference. “The CFPB can’t cover everything, because of resources – it isn’t that big of an agency. But more importantly, it lacks the legislative authority to cover everything that...

The U.S. District Court for the District of Massachusetts recently decertified a class of borrowers who claimed that their mortgage lender violated the Equal Credit Opportunity Act and the Fair Housing Act by allowing its brokers to impose charges not related to a borrower's creditworthiness. In Barrett v. Option One Mortgage Corp., No. 08-10157, 2012 WL 4076465, the borrowers, who are African-American, claimed that the lender’s loan pricing policy had a disparate impact on African-American borrowers who...

The CFPB appears to be helping borrowers feel better about taking out a mortgage over the Internet, according to a top industry technology firm. Mortgage Marvel, the online mortgage shopping service of mortgage technology firm Mortgagebot, recent conducted an examination of its application history and data to help answer the question: Is the CFPB friend or foe? “According to the data, applications are up significantly when compared to last year’s data,” said Rick Allen, senior vice president of client services...

The CFPB is playing hardball with PHH Corp. – and by extension, the rest of the mortgage lending industry – by recently refusing to amend, let alone withdraw, the civil investigative demand it issued earlier this year to the firm. “PHH’s petition to modify or set aside the Civil Investigative Demand in this matter is denied,” CFPB Director Richard Cordray said in a ruling recently. That means PHH will soon have to produce “all responsive documents, items and information within its possession, custody or control that...

A new study by the CFPB of different credit scoring models found that for “a substantial minority” of consumers, different scoring models gave meaningfully different results. The study found that for 73 to 80 percent of consumers, different scoring models place consumers in the same category of credit quality. Different scoring models place consumers in credit-quality categories that are off by one category 19 to 24 percent of the time. And from 1 to 3 percent of consumers are placed in categories that are two or more...

The CFPB has released its five-year strategic plan, including four key goals, 11 desired outcomes, and 25 strategies that indicate the actions the bureau plans to take to accomplish its outcomes. The plan also features 27 performance measures that the CFPB will track against specific targets in order to assess its progress toward achieving those outcomes, as well as four performance indicators that do not reflect specific targets. Its first two goals are to prevent financial harm to consumers while promoting good...