As for the two banks working on jumbo securities, both have not issued any bonds in recent years but “are getting their securitization machines ready,” said one jumbo executive.

As of May, only three of the loans were 30-days delinquent, with the other once-delinquent mortgages having returned to current status or paid off.

The National Association of Mortgage Brokers is doing another survey of its membership to determine the amount of closing cost credits given back to consumers at closing during 2013 – part of a broader effort on the part of the trade group to persuade the CFPB to loosen aspects of its ability-to-repay rule. Last year, NAMB submitted a letter to the CFPB to detail the mandatory credits a broker is required to provide consumers when rate sheet pricing exceeds the broker’s contractually obligated Lender Paid Compensation agreement. NAMB contends that the mortgage broker community provides mortgage credits back to the consumer that range in the billions annually, thus stimulating the nation’s economy. In order to demonstrate this, NAMB polled a number ...

The Conference of State Bank Supervisors told the CFPB it is concerned that certain bad actors within the mortgage lending industry could take advantage of the bureau’s proposed “right to cure” an otherwise qualified mortgage loan that inadvertently falls outside the ability-to-repay rule’s 3 percent cap on points and fees. The CSBS concern revolves largely around bona fide discount points. “State banking regulators support measures that would increase access to credit for consumers who are at the margins of the points-and-fees limits,” the CSBS said in public comment letter to the bureau. “However, there is concern that the proposed ‘cure’ mechanism for inadvertent points and fee miscalculations could disguise or promote the misuse of discount points by unscrupulous lenders seeking ...

A diverse group of mortgage lending industry representatives including Realtors, credit unions and behemoth Bank of America is more or less supportive of a possible “right to cure” a qualified mortgage loan that would inadvertently slip beyond the QM 43 percent debt-to-income ratio threshold. “We support a DTI cure that would allow creditors to take corrective action where there is an inadvertent error in calculating a consumer’s debt or income or where a creditor has stopped documenting income in the mistaken belief that sufficient validated documentation supporting the 43 percent test has been obtained,” BofA said in a public comment letter to the CFPB. According to the lender, both of these instances could easily be fixed, either by correcting a ...

Credit union industry representatives want the CFPB to expand some exemptions in some of its recent rulemakings so their CU members could reach larger portions of their targeted markets. One of the recent amendments the bureau proposed to its mortgage rules issued in 2013 would provide an alternative definition of “small provider” applicable to Internal Revenue Code Section 501(c)(3) nonprofit entities that service loans for a fee and on behalf of other nonprofit entities within the same overall organization.This is the so-called “small servicer exemption.” Also for 501(c)(3) nonprofit entities, the proposed rule would exempt certain interest-free, contingent subordinate liens from the credit extension limit under the ability-to-repay rule. This is what’s known as the “small creditor exemption.” As ...

Compliance management systems are a “fundamental focus of supervision” for the CFPB, regardless of whether a given entity is a bank or nonbank, a top official told members of the industry recently. During a recent webinar sponsored by Inside Mortgage Finance, an affiliated newsletter, Ann Thompson, a senior analyst in the CFPB’s Office of Supervision Policy, discussed the critical relevance of a sound and solid CMS. “We think that a fully developed compliance management system is important because it should lessen risks to consumer and reduce the potential for violations of federal consumer financial laws,” Thompson said. “Even though the CFPB does not require a particular CMS structure, our supervisory experience has found that an effective CMS commonly has four ...

Mortgage companies that were hoping to launch initial public offerings this year are putting their plans on hold these days thanks to a weak origination market, according to investment bankers and stock analysts who follow the industry. “It’s deader than a doornail,” said Paul Miller, a senior analyst with FBR Capital Markets. According to Miller, who tracks publicly traded mortgage companies such as Nationstar Mortgage, PHH Corp., and Walter Investment Management, the origination market has...

U.S. Bank became the latest casualty in the government’s offensive against lax underwriting and improper origination of FHA mortgages after the bank to pay $200 million to settle all related charges. The Minneapolis-based bank became the seventh FHA lender since 2012 that has entered into settlement agreements with the Department of Justice and the Department of Housing and Urban Development to resolve alleged violation of the False Claims Act and the Financial Institution Reform, Recovery and Enforcement Act, according to Inside FHA Lending’s analysis of government data. The government lawsuits allege that the banks’ certification of loans as eligible for FHA insurance under the direct endorsement program violated the FCA. The banks’ misconduct allegedly contributed to the legacy losses that crippled the FHA Mutual Mortgage Insurance Fund and placed the ...

FHA lenders reported a significant increase in the number of FHA-insured loans originated in April, breaking a downward production spiral that began in the third quarter of last year. Whether this marks a turnaround for the market, however, is uncertain. April closed with $10.3 billion in total FHA originations, up 18.5 percent from March but down 51.7 percent from the same period a year ago. This surge in FHA financing occurred despite the rising costs of obtaining an FHA loans and access-to-credit issues, which have narrowed the gap between FHA and conventional loans with private mortgage insurance. Spring and Fall are the busiest times of year for home sales which might explain the spike, according to real estate agents. FHA fixed-rate mortgages comprised 95 percent of April’s production, with purchase loans accounting for 78 percent of loans originated during the month. FHA lending trends, however, show ... [2 charts]