Mortgage lending at community banks rose last year and is up over the last few years, according to a joint survey by the Federal Reserve and the Conference of State Bank Supervisors. However, that trend may not hold, thanks in part to a drop in demand and to a departure from the sector because of the CFPB’s mortgage rules. “Mortgage lending grew by more than 6 percent for community banks in our survey, which was somewhat higher than the comparable growth rate for all community banks over an overlapping period,” the agencies said. It was also higher than the comparable rate across the entire industry. Over a more-extended period, from December 2013 to March 2016, growth in 1-4 family residential ...
SFIG Meets With CFPB Officials to Discuss TRID. Staff and key members of the Structured Finance Industry Group, a securitization trade group, recently met with regulators at the CFPB to discuss the bureau’s integrated disclosure rule known in as TRID and reviewed the trade group’s RMBS (residential mortgage-backed securities) 3.0 TRID Compliance Review Scope document.... CFPB Releases Updated Exam Procedures for the Military Lending Act. Late last week, the bureau issued the revised procedures its examiners will use in identifying consumer harm and risks related to the Military Lending Act rule, which was updated in July 2015...
“We hope that you will help us to push back on current efforts to gift the proprietary infrastructure of Fannie Mae and Freddie Mac to the big banks,” the clergymen write.
The Federal Housing Finance Agency recently redrafted the proposed indemnification payments rule to make it easier to understand. The proposed rule looks to replace a provision concerning indemnification payments by regulated entities in conservatorship with one that clearly states that the regulation does not apply to such entities. This issue has been brewing since 2008 when the FHFA published an interim final rule on severance agreements and indemnification payments. It then re-proposed the proposed amendment on indemnification payments in 2009. Now the agency said it wants to clarify the fact that it does not consider indemnification payments to be subject to FHFA rules and procedures related to compensation.
Roughly a quarter of the single-family business that passed through Fannie Mae and Freddie Mac during the first half of 2016 resulted from special treatment bestowed on the GSEs following the housing market collapse. The biggest factor is the so-called GSE patch, which exempts Fannie and Freddie from underwriting restrictions on “qualified mortgages” that are part of the ability-to-repay rule promulgated by the Consumer Financial Protection Bureau. For mortgages to get QM status, the debt-to-income ratio has to be 43 percent or less. However, the CFPB rule waives that requirement for Fannie and Freddie as long as they remain in conservatorship, up to a point.
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