Five regulators, including the Consumer Financial Protection Bureau, recently clarified that supervisory guidance is not regulation and won’t be the sole basis for enforcement actions. Industry attorneys said the statement would benefit the mortgage industry overall, but lenders still need more guidance to help with tricky compliance issues.
Mortgage fraud is a growing problem, especially income misrepresentation, according to a recent CoreLogic report. All loan segments showed increased risks, except for the jumbo loan segment, which actually witnessed a decline in application fraud.
The mortgage industry welcomed legislation passed by the House Financial Services Committee last week to clarify the seasoning requirements of certain VA streamlined mortgage loans and resolve the problem of VA “orphan” loans.
Although some industry members have voiced concerns over appraisal waivers offered by Fannie Mae and Freddie Mac, the Federal Housing Finance Agency Office of Inspector General said the risk is minimal. Only a small portion of loans are actually eligible for the waiver and the FHFA said it’s closely monitoring the program.
Originations at the largest U.S. mortgage lender in the third quarter will look a lot like production in the previous quarter, according to John Shrewsberry, a senior executive vice president and chief financial officer at Wells Fargo.
Private equity firms hoping to cash out their ownership stakes in nonbank lenders via an initial public offering of stock will have to wait a little longer, thanks to a tough origination market and institutional investor interest that lies elsewhere.
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