A mortgage lender’s documentation of compliance with the CFPB’s ability-to-repay qualified mortgage rule is just about as essential as compliance itself, a top industry attorney advised participants in a webinar sponsored by Inside Mortgage Finance Publications last week. And Joseph Reilly, a partner with the BuckleySandler law firm, reached into Zen lore to make his point. “If a tree falls in the forest and no one hears it, does it make a sound?” he asked. Similarly, “Starting in 2014: If a lender complies with ATR/QM but...

Officials from the CFPB and the Federal Reserve held a webinar earlier this month to help small creditors understand qualified mortgage lending under the bureau’s ability-to-repay rule. To begin with, there are two special categories of QMs for small lenders, portfolio QMs and balloon QMs. Also note that the ATR rule provides additional flexibility to small lenders in that the safe harbor has been expanded to 3.5 percent over the average prime offer rate. The first step to determine eligibility – of both the lender...

The Mortgage Bankers Association has put together some guidance, drawn from conversations with CFPB staff, on how to exclude affiliate fees in the points-and-fees calculation for qualified mortgages under the agency’s ability-to-repay rule, which takes effect in just a few weeks. The bureau’s ATR and Home Ownership and Equity Protection Act rules contain a cap or limit on points and fees to qualify as a QM loan and a specific points-and-fees threshold triggering HOEPA coverage. The calculation of points and fees under both of these...

The CFPB and five other federal financial regulatory agencies issued a supplemental final rule last week that creates exemptions from certain appraisal requirements for a subset of higher-priced, higher-risk mortgage loans. The final rule provides that loans of $25,000 or less and certain “streamlined” refinancings are exempt from the Dodd-Frank Act appraisal requirements, which go into effect on Jan. 18, 2014. In addition, the final rule contains special provisions for manufactured homes, which can present unique issues in...

Among other things, the FHFA wants to know if six-months is adequate time for lenders and servicers to make the changes to their technology systems.

During the first half of 2013, only about $2.05 billion of FHA loans exceeded $625,500, or about 1.5 percent of FHA business, according to Inside Mortgage Finance.

The top Democrat and Republican on the Senate Banking, Housing and Urban Affairs Committee acknowledged this week they will not make their ambitious deadline of clearing a housing-finance reform bill by the end of this year. But the senior lawmakers said they remain “bullish” on moving legislation to the Senate floor sooner rather than later in 2014. Speaking at a Bipartisan Policy Center event, Committee Chairman Tim Johnson, D-SD, blamed “a couple of curveballs,” including the 16-day government shutdown, for falling short of the deadline he and Idaho Republican Mike Crapo set for the committee. The committee did manage to hold 12 hearings on reform and what to do with the two government-sponsored enterprises that have been in conservatorship for a little over five years. “Beyond private capital, we are also working...

The fledgling common securitization platform project isn’t likely to get off course under new Federal Housing Finance Agency Director Mel Watt, but it probably won’t be the new regulator’s pet project either, according to industry advisors and investment bankers tracking the CSP’s trajectory. One thing is certain though: Watt – approved by the Senate just this week – is so new to the job that he’s not likely to make any major speeches or policy statements about the project until sometime in January, at the earliest. Industry officials note...

Fannie Mae and Freddie Mac have made “major steps” in credit risk transfer in 2013 with more where that came from in 2014, but a senior Federal Housing Finance Agency official says the government-sponsored enterprises, at the FHFA’s direction, won’t rely on a single risk-transfer method going forward. In written testimony prepared for the Senate Banking, Housing and Urban Affairs Committee’s final hearing on housing finance reform this week, Wanda DeLeo, the FHFA’s deputy director, division of conservatorship, provided an overview of the GSEs’ risk-transfer transactions to date, as well as the pros and cons of each transaction type. “Pricing on all the transactions this year has been...

Lenders generated an estimated $218 billion in purchase mortgages during the third quarter, the highest three-month volume since the third quarter of 2007.