The CFPB likely removed a noticeable amount of political pressure – but not all – from its back by responding to some industry concerns with its earlier ability-to-repay final rule. Last week, the bureau finalized amendments to the ATR rule that expand the legal protections for small lenders to make loans beyond the original rule’s main requirements, and it provided such creditors with a longer period of time in which to adjust to the rule’s restrictions on balloon mortgages. Under last week’s final rule, the CFPB...
Among the changes that the CFPB made to its ability-to-repay rule last week are revisions to how loan originator compensation is counted in the qualified mortgage points-and-fees calculation. Under the Dodd-Frank Act, points and fees on a qualified mortgage may not exceed 3 percent of the loan balance. Further, points and fees that exceed 5 percent will trigger the protections for high-cost mortgages under the Home Ownership and Equity Protection Act. Dodd-Frank also mandates that loan originator compensation be counted toward...
The CFPB, as requested by the mortgage lending industry, has delayed implementing its ban on the financing of credit insurance premiums until Jan. 10, 2014, the effective date for most of the mortgage‐related rules it issued in January. The rule had originally been scheduled to kick in June 1. That effective date was originally proposed because the bureau believed the ban did not present a significant implementation burden for affected institutions. …
EverBank Financial is preparing to issue a $303.30 million non-agency jumbo mortgage-backed security, according to a presale report issued by DBRS this week. The MBS has similar characteristics to the $307 million jumbo security EverBank issued in March. DBRS cited strong reps and warrants on the deal, including automatic reviews for seriously delinquent loans, mandatory arbitration and no sunset provisions. However, the rating service said EverBank’s limited securitization history and ...
Since 2008, big banks have largely held their non-agency jumbo originations in portfolio, seeing better execution than non-agency MBS issuance, but all that could be changing.
The auction market for nonperforming mortgages is picking up a full head of steam this year and could be bolstered by securitizations, according to investors and advisors who play in that space. Gordon Albrecht, executive vice president of FCI Lender Services, said he has a hedge fund client that is presently working on a $40 million securitization of nonperforming residential loans. Albrecht said he could not identify the client, though he noted that Wells Fargo is involved in the transaction along with a foreign bank. He added...
Home prices are improving at a rapid pace throughout the nation, sparking bidding wars in certain markets, according to several different indices. But this rise in “home equity” is also spurring talk that the two largest players in residential finance – Fannie Mae and Freddie Mac – could be sitting on large unrealized gains in both their MBS and whole loan portfolios. One veteran MBS investor told Inside MBS & ABS that home values have improved so much over the past 120 days that the government-sponsored enterprises may be looking at “monster” increases in the value of their holdings. “Keep in mind that these two are sitting on loans where a year ago the loan-to-value ratio was 115 percent,” said this investor. “But most of this stuff isn’t underwater anymore. If [the GSEs] re-calculate their reserves, they will see some huge gains.” In its 10-Q filing for the first quarter, Fannie reported...
A Senate bill filed last week by a Georgia Republican would wind down Fannie Mae and Freddie Mac and create a transitional mortgage program that would be sold to the private sector within a decade of the proposed legislation’s enactment. The Mortgage Finance Act of 2013, S. 1048, by Sen. Johnny Isakson, R-GA, reprises his proposed legislation of the same name from 2011. The bill would replace the two government-sponsored enterprises with a single Mortgage Finance Agency. The MFA created under S. 1048 would be...
According to industry sources, the FHA recently sent out administrative letters to a handful of residential lenders. Meanwhile, yet another new subprime originator has emerged.
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