Lenders should think twice about offering non-qualified mortgages that depend only on a borrower’s assets – particularly a big downpayment – to establish the borrower’s ability, a new report from the CFPB suggests. In the spring edition of the bureau’s supervisory highlights, issued last week, the regulator warned that a large downpayment alone is not enough to prove a borrower’s ability to repay a non-QM that is based on the consumer’s assets. “As an initial matter, a downpayment cannot be treated as an asset for purposes of considering the consumer’s income or assets under the ATR rule,” said the CFPB. “The ATR rule requires creditors to consider a consumer’s reasonably expected income or assets, ‘other than the value of the dwelling, including ...
The American Bankers Association last week issued the first industry call for the CFPB to delay implementation of its pending Home Mortgage Disclosure Act final rule in its entirety, citing compliance difficulties and concerns about consumer data privacy. The call came in a white paper submitted to the Treasury Department as part of the banking industry’s response to President Trump’s executive order earlier this year, EO 13772, outlining “core principles” for financial regulation. The ABA has three main gripes about the HMDA rule, most of which is scheduled to take effect in January 2018. First, it said that collecting all of the required data will be costly. “Although it is not simple to distill the cost estimates from the bureau’s ...
SCOTUS Sides With City of Miami in Predatory Lending Case. The Supreme Court last week issued a narrow decision in favor of the City of Miami in a case stemming from losses the municipality claimed it suffered from predatory mortgages. Industry analysts are divided on what the ruling means for lenders... Goldman Sachs Continues Progress on Consumer-Relief Obligation Under Mortgage Settlements. Wall Street firm Goldman Sachs is more than one third of the way towards meeting its $1.8 billion consumer-relief obligation under the April 11, 2016, mortgage-related settlements it reached with the U.S. Department of Justice and the states of California, Illinois and New York, according to retired Boston University law professor Eric Green, the independent monitor of the consumer-relief portions of the agreements ...
Some in the industry believe the GSE common shares are essentially worthless with the junior preferred falling into the category of being a speculative bet.
In response to a question about Fannie's capital buffer, Mayopoulos said, “It’s our mission to provide liquidity in all markets at all times and we’re continuing to do that. I am glad to see that policy makers are starting to refocus on housing market reform including the lack of capital at Fannie Mae and Freddie Mac.”
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