“This decision is motivated by concerns about how such a reduction could adversely impact the health of the current housing finance market,” said FHFA Director Mel Watt.
On the M&A front, a new report from Compass Point Research & Trading estimates that if PHH Corp. finds a way to sell its mortgage and fleet divisions, the stock should be worth $30 a share.
In a wide-ranging speech – and in supporting documents – Mel Watt also vowed that the GSEs will continue to permit “compensating factors” when weighing a decision to guarantee mortgages where the debt-to-income ratio is north of 43 percent.
Compare ratios have been criticized by some factions of the mortgage industry. Some lenders have complained that the ratio is one reason why originators do not target underserved markets.
In his comments to reporters, FHFA Director Mel Watt did not rule out Fannie and Freddie engaging in principal reductions to help troubled consumers who have GSE loans.
Among the changes, the two GSEs will no longer require that a lender automatically repurchase a residential loan when a mortgage insurance company rescinds coverage.
The U.S. Supreme Court has agreed to resolve a split among the circuit courts over a provision in the Truth in Lending Act that allows a borrower to void a mortgage loan. In reviewing the case, Jesinoski v. Countrywide Home Loans, the SCOTUS will consider whether a borrower may file a lawsuit for rescission after TILA’s three-year repose period if the borrower sent a notice to the lender within that period. The U.S. Court of Appeals for the Eighth Circuit in September upheld a lower court ruling that a borrower seeking to rescind a mortgage loan under TILA must file suit within three years of consummating the loan. Contrary to the plaintiffs’ assertion, the lower court ruled that a borrower’s...
Now that the mortgage lending industry has a few months of experience dealing with the qualified mortgage standard under the CFPB’s ability-to-repay rule, some lenders are getting more confident about lending outside the parameters of the QM. Last week, during a webinar sponsored by Inside Mortgage Finance, an affiliated newsletter, industry experts highlighted some key considerations as to how to do so while minimizing the legal risk and otherwise overcoming certain compliance challenges. “A couple of points that I would make is that you want to document every step along the way – because what you’re really managing to is not necessarily the CFPB, not even necessarily a judge. You’re probably managing to the lawyer who is looking to take the...
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