CFPB oversight has not significantly reduced the volume of mortgage originations, but it has changed the kinds of loans being made, the Federal Reserve Bank of New York found. Critics of the CFPB have argued that its activities increased compliance costs and ultimately reduced the availability of financial services to consumers. However, a recent New York Fed staff report found there’s little evidence supporting that theory in the mortgage business. The market share of ...
In response to the CFPB’s request for information on adopted rules, industry groups especially want the bureau to make some changes to the qualified mortgage standards under the ability-to-repay rule, including making the “GSE patch” permanent. The ATR rule generally requires a maximum debt-to-income ratio of 43 percent in order to get QM status. Special rules apply to agency mortgages, however, including a temporary provision that loans eligible for sale to the ...
GSE mortgage sellers repurchased a slightly larger volume of defective single-family mortgages during the first quarter of 2018, according to a new Inside The GSEs analysis.During the first three months of the year, lenders repurchased or made other indemnification on $240.91 million of home loans sold to the GSEs, a 4.6 percent increase from the record low set in the fourth quarter of 2017. Buybacks of Fannie loans were up 27.2 percent, but ... [Includes one data chart.]
Just as optimistic talk of GSE reform was fading, in a surprise move late this week the Trump administration revealed a proposal to end the 10-year conservatorship. The gist of it is to reduce the GSEs’ footprint in the housing market through more competition and provide an explicit U.S. guarantee on conventional mortgage-backed securities that is separate from the federal support for low- and moderate-income borrowers.The three-page proposal, billed as a reorganization plan, is part of a larger “Delivering Government Solutions for the 21st Century” publication revealed on June 21. “This proposal would reorganize the way the federal government delivers mortgage assistance and go beyond...
The Treasury Department wants to reduce the GSEs’ footprint in the mortgage market, according to Treasury Counselor Craig Phillips. He also reiterated, about a week before the administration formally published its thoughts on reform (see story page 3), that ultimately the goal is to take Fannie Mae and Freddie Mac out of conservatorship. He said that at 70 percent the federal share of housing is clearly far too high. The Treasury official spoke at a Bank of America Merrill Lynch mortgage and housing finance conference in New York last week that was closed to the press. BAML provided a report on his remarks.
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