Although the Obama administration has failed to put forth any definitive proposal for mortgage finance reform and Congress has made little progress on the issue, some researchers are urging policymakers to reduce the role of government as much as possible. “I would dearly love to get rid of the government guarantee,” said Anthony Sanders, professor and senior scholar at George Mason University’s Mercatus Center during a panel discussion in Washington, DC, regarding the future of the government-sponsored enterprises. He added, however, that housing policy must carefully avoid creating a market...

Mortgage industry officials are urging the Consumer Financial Protection Bureau to give the industry plenty of time to implement the extensive – and inter-related – changes that are required under the Dodd-Frank Act. Two of the biggest anxieties these days are the rules on “qualified mortgages” and “qualified residential mortgages” being developed by federal regulators. Another is the CFPB project to integrate Truth in Lending Act/Real Estate Settlement Procedures Act mortgage disclosures. In addition to the fact that none of these rules have been made final, there’s a good deal of angst over how they...

Small and medium-sized mortgage servicers want the Consumer Financial Protection Bureau to allow flexibility to accommodate different business models as the agency drafts new national servicing standards that are expected to increase costs. The CFPB rulemaking process is somewhat unique because the Dodd-Frank Act requires that it take small business interests into account as it develops new regulations. The agency recently convened a panel under the process required by the Small Business Regulatory Enforcement Fairness Act to weigh the impact of new servicing requirements on smaller lenders. “The panel agreed...

The ongoing feud between Congressional Democrats and the Federal Housing Finance Agency appeared to boil over this week as the FHFA’s head answered back to charges that he’s been holding back pertinent information about the agency’s analysis of principal reductions. In a May 1 public letter to FHFA Acting Director Edward DeMarco, Reps. Elijah Cummings, D-MD, and John Tierney, D-MA, accused the agency head of playing fast and loose with the facts regarding a previously unreported 2010 Fannie Mae pilot program to forgive a borrower’s mortgage debt, as well as the facts buttressing the FHFA’s position...

Mortgage lenders large, small and in-between jockeyed for position against a backdrop of slowing new home loan originations during the first quarter of 2012. A new Inside Mortgage Finance market analysis and ranking found that an estimated $385.0 billion in new single-family mortgages were originated during the first three months of the year. That was down 3.8 percent from the fourth quarter. The two most striking trends were that 10 of the top 25 lenders posted increased production volume while the others reported declines – some of which were substantial – and nearly all top...(Includes two data charts)

The Financial Stability Board has published principles for sound residential mortgage underwriting practices, emphasizing that participating jurisdictions should make sure lenders are effectively verifying income and other financial information, insisting on reasonable debt service coverage and appropriate loan-to-value ratios, engaging in effective collateral management, and making prudent use of mortgage insurance. The FSB said some or all of the principles may not necessarily be appropriate or applicable for certain niche forms of finance. But jurisdictions should...

A homeowner does not have a private right of action against his mortgage servicer under the Obama administration’s Home Affordable Modification Program, the U.S. Court of Appeals for the Eleventh Circuit ruled late last week. In this case, the borrower, Jason Miller, owned a parcel of real property in Hiawassee, GA, which he was able to purchase by taking out a mortgage loan from the unidentified predecessor of the defendant, Chase Home Finance, LLC (Chase). In February 2009, Miller asked for a loan modification from Chase, citing financial difficulties. Chase agreed to...

The Consumer Financial Protection Bureau has put together a second panel, as per the Small Business Regulatory Enforcement Fairness Act, tasked with giving the bureau input on the mortgage servicing rules proposal that the CFPB is working on under the Dodd-Frank Wall Street Reform and Consumer Protection Act. “The SBREFA requires the CFPB to convene a small business panel before rolling out regulations that the CFPB director expects to have a significant impact on a substantial number of small business entities,” explained Barbara Mishkin, of counsel in the consumer financial services group...

An ad hoc coalition of mortgage lender trade group representatives rattled off a host of concerns it has with the draft proposals from the Consumer Financial Protection Bureau for an integrated mortgage disclosure under the Real Estate Settlement Procedures Act and the Truth in Lending Act. The short list of concerns includes the need for careful synchronization with other rulemaking efforts, especially those involving the “qualified mortgage” and “qualified residential mortgage” designations; the negative and unfair results of lowering cost tolerances; the unintended consequences of expanding...

MetLife, Inc. has announced that it is leaving the reverse mortgage business as part of a broader business plan to exit the mortgage market and focus strategically on global insurance and employee benefits. Nationstar Mortgage will purchase MetLife’s reverse mortgage servicing portfolio. MetLife Bank will no longer accept new reverse mortgage loan applications and registrations. MetLife’s entire retail banking business, including mortgages, accounted for less than 2.0 percent of the company’s 2011 operating earnings. Last year, the company decided to ...