Mortgage securities investors have as much at risk as lenders from the emerging ability-to-repay consumer protection standard because borrowers will be able to challenge compliance with far fewer time restrictions, according to the American Securitization Forum. In a comment letter to the Consumer Financial Protection Bureau, the ASF urged the agency to set objective and clear standards for qualified mortgages – which will satisfy the ability-to-repay underwriting requirement imposed by the Dodd-Frank Act – and a legal safe harbor. “Otherwise, the resulting significant risk and costs of potential litigation will constrain investors from purchasing...

A surge in securitization of home purchase-money mortgages during the second quarter was not enough to offset a sizable drop in refinance activity during the first three months of the year, according to a new Inside MBS & ABS analysis and ranking. A total of $372.85 billion of agency single-family MBS was issued during the second quarter, down 3.1 percent from the first three months of 2012. Although securitization of purchase mortgages rose 22.4 percent, partly from seasonal factors as well as firming in the housing market, the volume of refinance loans securitized by Fannie Mae, Freddie Mac and Ginnie Mae declined 10.6 percent.Includes two data charts.

Two of the three biggest barriers to a return of the non-agency mortgage sector – the premium capture cash reserve account and the qualified mortgage definition – are embedded in the Dodd-Frank Act, industry officials say. And the third is what’s not in the controversial law: any substantive reform of Fannie Mae and Freddie Mac. The biggest challenge to reducing the government’s domination of the mortgage market is the lack of direction on the government-sponsored enterprises, said Tom Deutsch, executive director of the American Securitization Forum, during a hearing this week.

Consumers who take out mortgages that are considered high cost currently receive special pro-tections from fees and risky loan terms. The Consumer Financial Protection Bureau this week came out with a proposed rule that would expand what is considered a high]cost mortgage and provide more protections to consumers who take out those loans. Loans that meet high-cost triggers under the Home Ownership and Equity Protection Act are subject to special disclosure requirements and restrictions on loan terms, and borrowers in high-cost mortgages have enhanced remedies ...

For more than a decade, Countrywide Financial’s “VIP Program” approved nearly 18,000 sweet-heart mortgages to congressmen, policymakers and officials at the government-sponsored enterprises in an effort to curry favor in Washington and strengthen its business relationship with Fannie Mae, ac-cording to a newly released congressional inquiry. Last week’s 136-page report from House Oversight and Government Reform Committee Chair-man Darrell Issa, R-CA, completed a three-year investigation by the committee of Countrywide’s “Friends of Angelo” program, which ran from January ...

With refinance transactions accounting for three out of four home mortgages financed through agency programs in the first half of 2012, most top lenders securitized significant volumes of refi loans through Fannie Mae, Freddie Mac and Ginnie Mae.But a new Inside Mortgage Finance analysis and ranking reveals that a number of lenders man-aged to focus on the fast-growing home purchase-mortgage market during the first half of 2012. At the top of that list was Pulte Mortgage, the subsidiary of a national homebuilding company, where pur-chase-money mortgages accounted for 99.0 percent of...

Mortgage repurchase requests by Fannie Mae and Freddie Mac show no signs of slowing down, and the two government-sponsored enterprises appear poised to pick up the pace with buyback de-mands targeting mid-tier financial institutions, warned Fitch Ratings. Fitch issued a note last week in which the rating agency cited signs of a potential shift in focus by the GSEs from the big banks to the smaller regional banks as a target of opportunity for increased representation and warranty claims.“Recent announcements by PNC, SunTrust and First Horizon that they intend to boost future GSE ...

As the Consumer Financial Protection Bureau works to finalize its ability-to-repay qualified mortgage final rule by January, industry officials again called upon Congress to press the bureau to broadly structure the terms of a qualified mortgage and craft a well-defined ability-to-repay rule, along with a strong safe harbor to help provide legal certainty. John Hudson, chairman of government affairs for the National Association of Mortgage Brokers, told lawmakers that industry professionals and “every consumer wanting to participate in homeowner-ship supports common sense underwriting ...

After months of high-profile publicly and seemingly endless prototypes, consumer testing and discussions with industry stakeholders, the Consumer Financial Protection Bureau this week issued a detailed proposed rule to integrate the mortgage disclosures consumers get under the Real Estate Settlement Procedures Act and the Truth in Lending Act. The proposal features new “loan estimate” and “closing disclosure” forms to highlight the costs and risks of a mortgage in terms designed to be clearer to consumers and to facilitate shopping. According to the CFPB...

California is about to become the first state to enact into law a large portion of the national mortgage servicing settlement that state and federal government officials negotiated this year with the nation’s top five banks and apply it to all lenders. The state legislature passed the Homeowner Bill of Rights last week (AB 278/SB 900). The Democrat-controlled state Assembly approved the bill on a 53-25 vote, with the Senate endorsing the measure 25-13. The legislation will force large lenders to provide a single point of contact, eliminate dual tracking and impose significant civil...