The Consumer Financial Protection Bureau isn’t wasting any time in moving forward with its “know before you owe” integrated mortgage disclosure project. Late last week, it released highlights of the thousands of comments it received from the first round of its disclosure prototypes, and early this week it issued a second set of forms for public comment, this time focusing on borrower payments or fees necessary to close a mortgage. In the first round of prototypes (dubbed “Ficus Bank” and “Pecan Bank”), the back page was the same on both versions, whereas the front page ...

The fledgling Consumer Financial Protection Bureau sees its role as helping credit markets work better to enhance viable homeownership and level the playing field in credit availability, according to key officials participating in the Mortgage Lending Industry Strategic Markets & Diversity Conference sponsored last week by ComplianceTech. “We realize now that building wealth and homeownership is a risky proposition and one that should not be taken lightly,” said Patricia McCoy, assistant director of mortgage and home equity at the CFPB. “Our job is to ...

Total capital in the FHA single-family program declined again in the first quarter of 2011, although agency officials say the program is on target to meet legal mandates as higher premiums and stronger loan quality gradually offset poorly performing older loans. In a quarterly report released this week, the Department of Housing and Urban Development said total capital resources for the FHA Mutual Mortgage Insurance Fund declined by $1.1 billion to $31.6 billion during the first three months of 2011. At the same time, the outstanding balance of single-family insurance at risk rose ...

The Federal Housing Finance Agency, Ginnie Mae and the government-sponsored enterprises should add another potential alternative servicing fee structure in their deliberations to revamp the compensation structure for residential servicing, according to the Mortgage Bankers Association. Last week the MBA sent a letter to the FHFA, Ginnie Mae, Fannie Mae and Freddie Mac pitch-ing the merits of a Reserve Account Proposal, requesting the proposal be included among the options expected to be released for public comment within the next month. “The Reverse Account Proposal would set up ...

Lawmakers on the House Financial Services Committee this week approved by a wide bipartisan margin a bill that would create the legislative framework for a covered bond market in the U.S., but not before some haggling regarding the role of the federal regulators. The committee voted 44-7 in favor of H.R. 940, the U.S. Covered Bond Act of 2011, clearing the way for the bill’s consideration by the full House of Representatives. Rep. Scott Garrett, R-NJ, chairman of the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, said H.R. 940 sets up “legal certainty” that is a core element of...

The challenges confronting the recovery of the non-agency MBS market are many, but legacy issues, such as representations and warranties, are the cause of huge frustration in the industry, according to panelists at the American Securitization Forum this week. “Some of these legacy issues have very far-reaching tentacles,” observed Mani Sabapathi, principal at Prudential Fixed Income. The housing finance world has been bracing for the coming risk-retention rule with great apprehension, he said, raising the possibility that reps and warrants could be included as a part of it. “I think it can be an important aspect to the extent that if you have these loans that don’t meet...

Mortgage servicers are being squeezed by inadequate compensation, intense scrutiny and a surge of new regulation, but Fannie Mae and the Treasury Department say they are trying to even the score. Servicers no longer see their job as financially rewarding and have been leaving their positions accordingly, claimed Diane Pendley, managing director of Fitch Ratings, during a panel session at this week’s annual meeting of the American Securitization Forum. “We’re seeing them fighting – they’re coming out swinging, just really to get some balance,” echoed Gwen Muse-Evans, vice president and chief risk officer at Fannie Mae. “There’s definitely a perception that...

The Federal Housing Finance Agency is working on the double to come up with written policies and procedures for its consumer complaints process, as well as a thorough assessment of the staff and resources needed to implement the new functions by the end of the year following a very public rebuke by the Finance Agency’s watchdog.In a report released this week, the Office of the Inspector General of the FHFA said its audit of Freddie Mac and Fannie Mae’s regulator found the Finance Agency’s oversight of the receipt, processing and disposition of consumer complaints to be a “significant deficiency” in its internal controls.

Earnings reports from nine mortgage banking operations suggest that servicing operations played a major part in the industry’s sharp downturn in profitability during the first quarter. But a new Inside Mortgage Trends analysis also identifies weakness in loan production operations and declining origination volume as key factors. The nine lenders, including the three largest firms and seven of the top 10 originators, posted a combined $1.726 billion in net servicing income during the first quarter of this year. That was down ... [includes one data chart]

Mortgage banking income was hit hard by rising expenses and declining production during the first quarter of this year, with more companies failing to generate a net profit from their business, according the Mortgage Bankers Association’s most recent performance report. The average firm participating in the MBA survey reported $617,000 in pretax income during the first quarter, down 60 percent from the fourth quarter’s average $1.56 million. Only 63 percent of lenders reported a net profit for the first quarter, down from 84 percent in the final three months of 2010. Mortgage bankers reported ...