Many financially struggling consumers echoed the American Bankers Association in arguing that the CFPB’s proposed rules on prepaid products could hurt the so-called underbanked and those who sometimes have more month than they do money. “The CFPB’s proposed rules for prepaid products include some onerous provisions that could create insurmountable compliance barriers for banks offering the cards,” the ABA said in a comment letter. “This would be particularly harmful for ‘underbanked’ individuals, many of whom rely on prepaid accounts as an alternative to traditional deposit products.” One barrier is the CFPB’s proposed treatment of overdrafts, which “effectively prohibits linking prepaid cards to overdraft services ... and prohibits imposing any fee when an account is in overdraft status,” the trade group ...
Concerns about how borrowers will be impacted by a change in servicers go beyond mortgages in non-agency MBS. Analysts at Moody’s Investors Service warn that the decentralized servicing models used for consumer loan ABS issued by Springleaf Holdings and OneMain Financial face significant risks in the event that servicing needs to be transferred. Both Springleaf and OneMain originate consumer loans at local branches, where they conduct certain servicing operations and collections. The decentralized model can help boost originations and loan performance, though there are risks for investors in consumer ABS with decentralized servicing. “As long as the originator maintains the customer relationship and local presence, this ‘high-touch’ model can help...
Fitch Ratings has issued a report updating its standards for rating residential MBS under the ability-to-repay and qualified mortgage rules that went into effect early last year. Issued by the Consumer Financial Protection Bureau, the rules outline a set of underwriting criteria, which, when met for a particular loan, protects the lender from any undue litigation risk and provides a safe harbor for the loan. The rules affect...
Nonbank servicers would be subject to increased capital requirements and scrutiny under standards proposed last week by state regulators. Many parts of the proposal are similar to standards established by federal regulators, though there are some nuances for non-agency mortgages. “By relying upon existing standards and generally accepted business practices, we hope to minimize regulatory burden for small, less complex firms, while still incorporating a ...
Large bank servicers significantly reduced their use of principal reduction loan modifications in the past year, according to new data from the Office of the Comptroller of the Currency. Principal reduction mods – which are largely limited to non-agency mortgages – were used in 6.5 percent of the loan mods completed in the fourth quarter of 2014 by eight large bank servicers tracked by the OCC. In the fourth quarter of 2013, large bank servicers employed principal reduction on ...
Ginnie Mae mortgage-backed securities issuance fell in the first quarter of 2015 with FHA volume slipping during the period, according to an Inside FHA/VA Lending’s analysis of agency data.Ginnie MBS production in the first quarter totaled $79.8 billion, down from $80.6 billion in the 4Q14, despite a 29.3 percent increase from February to March. On the other hand, production was up 41.6 percent from a year ago.FHA-backed Ginnie MBS issuance dropped 3.1 percent in the first quarter from 4Q14, ending the period with $39.9 billion. Year-over-year volume rose 22.0 percent from the previous year. On the other hand, refinancing increased to $12.3 billion from $7.8 billion during the same stretch. VA securitization totaled $35.5 billion, up from $33.6 billion quarter-over-quarter, powered by refinance loans. Rural housing securitization totaled $4.2 billion in the first quarter, down from $5. 7 billion in 4Q14. Securitized FHA purchase loans rose 7.7 percent in March from February, while ... [3 charts].
The Department of Veterans Affairs will continue removing barriers to delivering home-loan benefits to veterans and service members in 2015, focusing more on further improvements in appraisal and servicing. “It’s going to be geared around improving on the things we have already done,” said Mike Frueh, director of the VA Home Loan Guaranty program. VA loan originations are on the upswing and the agency wants to maintain the trend by getting more vets and active-duty personnel into the program. Last year, 18 percent of VA loans were to active-duty service members and 82 percent to veterans. Frueh said the VA program is by far the better deal. Interest rates are lower on a VA loan than on conventional loans and, generally requires no downpayment, he noted. In addition, VA loans do not have mortgage insurance. Based on the volume of VA loans originated in 2014, veteran borrowers ...
RSS