Treasury Eyeballing CFPB Rules as Part of Regulatory Relief Review. The Treasury Department is focused on a wide range of regulatory requirements where simple communication and clarification of the regulatory intent is warranted, such as the CFPB’s ability-to-repay rule, the integrated disclosure rule and the Home Mortgage Disclosure Act rule, Craig Phillips, counselor to the Treasury secretary, said during a symposium in New York City last week, according to Inside Mortgage Finance.... Dodd-Frank Changes to be Discussed. House Financial Services Committee Chairman Jeb Hensarling, R-TX, is scheduled to discuss his Dodd-Frank Act alternative, H.R. 10, the Financial CHOICE Act, Tuesday of this week at an event at the American Enterprise Institute....
Federal Housing Finance Agency Director Mel Watt’s comments last week that he’s prepared to allow the GSEs to build a capital buffer to avoid a Treasury draw was met with both applause and concern. But this week, Bob Ryan, special director to Watt, clarified the comments stating that the plan would entail delaying the dividend payments to the U.S. Treasury Department and not suspending them. Ryan, speaking during a credit-risk transfer symposium in New York City, kicked off the first five minutes of a panel discussion about GSE reform by talking about the potential capital buffer plan. He said that it would be done strictly for the purpose of avoiding draws on the “limited resources of the preferred stock purchase agreement.”
The purchase-mortgage business showed some green shoots in April, but not enough to offset another drop in refinance activity, according to a new Inside The GSEs ranking and analysis. Fannie Mae and Freddie Mac securitized $31.84 billion of purchase mortgages last month, a 12.2 percent increase from March. It was the third straight monthly gain in purchase-mortgage volume, bringing year-to-date activity to $123.46 billion, a 13.6 percent improvement over the same period in 2016. Purchase mortgages accounted for over half of GSE business in April for the first time since August of last year. But the refinance side of the business fell again in April, to just $25.49 billion. That was down 17.8...
Federal Housing Finance Agency Director Mel Watt reiterated his view this week that housing finance reform should fall in the hands of Congress, not the FHFA, and discussed the GSEs’ role in expanding access to credit.Speaking at the American Mortgage Conference in North Carolina, Watt followed up on points he made during last week’s Senate Housing, Banking and Urban Affairs Committee. “I drew a distinction between decisions we have made, and continue to make, as conservator and decisions Congress must make,” he said. Watt explained that decisions the FHFA has made during the conservatorship have “fundamentally reformed” the GSEs’ operations, practices and protocols.
Fannie Mae and Freddie Mac credit-risk transfer programs have evolved from their prior business model but the market still has a ways to go before it fully matures, according to Federal Housing Finance Agency Director Mel Watt.Watt noted that the GSEs have made a tremendous amount of progress on credit risk transfers in a short amount of time, increasing their transaction volume from an unpaid principle balance of $90 billion in 2013 to $548 billion in 2016.“From 2013 through the end of 2016, the enterprises have transferred a meaningful portion of credit losses on a combined $1.4 trillion in mortgages, with a risk in force of about $49 billion,” said Watt, while...
While the FHFA’s capital buffer plan was the most talked about news that came out of the Senate Banking, Housing and Urban Affairs Committee last week, Watt also dished on a number of other issues including credit access, nonperforming loans and the delay of the common securitization platform. When asked about a timeline for exploring alternative forms of credit analysis, Watt said that the FHFA hopes to get through that by the end of the year. …
The GSEs proposed changes to their credit-risk transfer programs last week making them more conducive for real estate investment trusts to participate. Analysts say the changes will help create REIT demand for CRTs. REITs have long argued that regulatory rules have kept them out of the CRT market. Currently the structure of the GSEs’ popular CRT programs don’t meet the income test for REITs since they are structured as agency debt securities The proposed enhancements to Fannie’s Connecticut Avenue Securities program and Freddie’s Structured Agency Credit Risk would let their future CAS and STACR offerings qualify as real estate mortgage investment conduits.
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