The CFPB would have a handful of new oversight responsibilities for the credit-reporting sector under a discussion draft of possible legislation entitled the “Fair Credit Reporting Improvement Act of 2014,” circulated last week by Rep. Maxine Waters, D-CA, the ranking member of the House Financial Services Committee. Among the draft’s provisions is a directive for the bureau to set standards for validating the accuracy and predictive value of credit score algorithms, formulas, models, programs, and mechanisms…

In what looks like an example of a minority party member of Congress trying to outflank the majority party, Rep. Carol Maloney, D-NY, a member of the House Financial Services Committee, wrote CFPB Director Richard Cordray last week and urged the agency take specific steps to address certain checking account overdraft practices. Some of her suggestions are included in legislation she introduced last year that has not been taken up by committee. Maloney’s recommendations come despite indications that most bank customers overall pay little or nothing for their monthly banking services. Referencing a related study issued by the bureau in July, Maloney said the agency’s report provides “indisputable evidence” that consumers who have not opted in to overdraft protection are ...

Industry Tries to Rustle Up Support for QM Points-and-Fees Legislation. The Mortgage Action Alliance, the grassroots advocacy group of the Mortgage Bankers Association, recently issued a “call to action” to its members to get on the telephone and call their Senators and urge them to pass legislation that would make key changes to the way points and fees are calculated under the qualified mortgage definition in the CFPB’s ability-to-repay rule. S. 1577, the Mortgage Choice Act of 2013, introduced last year by Sen. Joe Manchin, D-WV, exempts any affiliated title charges and escrow charges for taxes and insurance from the QM cap on points and fees. Manchin’s bill is a legislative companion to H.R. 3211, the Mortgage Choice Act, which ...

A number of firms that hold vintage non-agency mortgage-backed securities are using their clean-up call options as the outstanding balance in the MBS dwindles. Executing clean-up calls can be more profitable for certain firms than allowing securities to run-off. Chimera Investment is the latest firm to tout its clean-up call strategy. The real estate investment trust said it acquired the rights to $4.8 billion of seasoned subprime mortgages by purchasing subordinate tranches of non-agency MBS issued by Springleaf Finance between 2011 and 2013. The purchase price wasn’t disclosed.

One webinar panelist noted: "It reconfigures every disclosure that we had before."

The proposed ban is coming under heavy fire from different factions of the mortgage industry, including the Council of Federal Home Loan Banks, REITs and even private investors that own mortgage stocks.

The recent adoption by the Securities and Exchange Commission of its Regulation AB II disclosure rule is expected to be a “credit positive” for the auto loan and lease ABS sector, but it probably will also raise costs for market participants and, ultimately, consumers, according to an industry consensus of the new rule. The new regulatory regime mandates standardized loan-level disclosures for ABS backed by auto loans and leases, as well as other classes, as reported previously. The loan-level data have to be provided on the SEC’s free online database known as the EDGAR system. Although specific data requirements vary by asset class, the new asset-level disclosures generally will include...

Ranieri and Goodman are worried that the creation of a single GSE security could morph into a drawn out and multi-year process.

Investors are paying up for distressed mortgages these days, fueling talk that the market might see more in the way of securitizations. “Buyers of non-performing loans want to securitize,” said Brian Dunn, senior vice president of MountainView Capital Group. “They like the [real estate mortgage investment conduit] structure.” According to Dunn, the securitization of nonperforming mortgages “has taken off...

The Federal Housing Finance Agency’s “single security” proposal for generic Fannie Mae and Freddie Mac MBS is “well-thought out” and “worthy of serious consideration,” but the agency should pick up the pace in its implementation to avoid making the solution part of the problem, according to a paper by the Urban Institute. Laurie Goodman, director of the UI’s Housing Policy Center, and Lewis Ranieri, chairman of Ranieri Partners, expressed concern that the FHFA “may be contemplating a slower pace in the project than it warrants.” The FHFA last month issued...