ABA stands to be an “influencer” in the debate not just because of the size of its bank membership base, but because depositories rank a close second to the Federal Reserve among the largest investors in agency securities.
We also caught wind of a large servicing auction that took place last week. The broker on the transaction had not returned a media inquiry on the deal...
The CFPB recently announced its plan to review and evaluate the effectiveness of its ability-to-repay/ qualified mortgage rule, as per the requirements of the Dodd-Frank Act, and is soliciting interested parties for their input. “We are asking the public to comment on our plan, to suggest sources of data, and generally to provide information that would help with the assessment,” bureau officials said in a blog posting revealing the plan. They added that the agency views the pending review and evaluation as an opportunity. “Conducting the assessment will advance our knowledge of the benefits and costs of the key requirements of the ATR/QM rule,” said the officials. “The assessment will also provide the public with information on the mortgage lending market, ...
Perhaps the single most critical aspect of the CFPB’s pending assessment of its ability-to-repay/qualified mortgage rule will be what happens to the so-called GSE patch. Under the patch, one of the discretionary elements the bureau added to the Dodd-Frank Act parameters of the rule, loans eligible for sale to the two government-sponsored enterprises, Fannie Mae and Freddie Mac, are granted safe-harbor QM status regardless of the loans’ debt-to-income ratio, as long as they meet other QM requirements. “Without that exemption, the bureau realized that being left with the standard QM (with the 43 percent DTI and Appendix Q) would have significantly limited mortgage lending,” said Richard Andreano, a partner in the mortgage banking unit at the Ballard Spahr law firm ...
The American Bankers Association sent a letter to Secretary Treasury Steve Mnuchin late last month detailing a handful of key reforms it believes are needed to the ability-to-repay/qualified mortgage rule promulgated by the CFPB. The trade group’s correspondence was in response to President Trump’s Executive Order 13772 and the circulation of his core principles for regulating the U.S. financial system.For starters, the ABA said all mortgages originated and held in a bank’s own portfolio should be considered QM, and should be afforded safe harbor legal treatment. “This approach is consistent with safe lending principles because holding loans in portfolio means that the bank is retaining 100 percent of the risk on that loan,” said the organization. Banks will offer ...
The American Bankers Association’s letter to Secretary Treasury Steve Mnuchin also detailed a handful of key changes it said the CFPB should make to its controversial Truth-in-Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure (TRID) rule. First, the bureau ought to revise the TRID tolerances. Currently, the rule requires creditors to observe closing cost tolerances that prohibit fees from increasing beyond initial disclosures by specific amounts. “TRID’s cost tolerance system is extremely convoluted, operating under a three-prong tolerance system that contains uncertain exemptions and rules for corrections,” the trade group said. “ABA believes that the current tolerance system should be entirely eliminated and replaced with a single tolerance standard of 10 percent, with more focused applicability.”Under this proposal, a ...
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