The Consumer Financial Protection Bureau boosted Fannie Mae and Freddie Mac business by some $132.9 billion when it gave the two government-sponsored enterprises a free pass on the debt-to-income ratio requirements of the qualified-mortgage rule. For the non-agency world, a qualified mortgage has to have a DTI ratio of 43 percent or less. While the government-insured market has its own QM rules that effectively ignore DTI, a loan eligible for sale to the GSEs is considered a qualified mortgage if it meets all the QM criteria – such as no interest-only payments – other than the DTI cap. From the beginning of 2014 through the end of the first quarter of this year, about 16.3 percent of the loans securitized by Fannie and Freddie had...[Includes two data tables]
Basel III capital requirements for mortgage servicing assets started to take effect in the first quarter of 2015, with full implementation slated for 2018. Smaller banks were impacted by new servicing capital rules much more so than larger banks in the first quarter, according to industry analysts. Previously, a bank’s servicing could contribute up to 50 percent of a bank’s total capital. Under the new Basel framework, mortgage servicing assets are limited to 10 percent of a bank’s common equity Tier 1 capital. MSA in excess of the 10 percent threshold must be deducted from common equity. “Despite the fact that changes to servicing capitalization have been telegraphed to the market as early as 2010, a disproportionate number of small banks appear...
A number of recent headline-generating fair lending settlements may have focused largely on issues of pricing disparities, but there has been a sea change among policymakers these days moving in the direction of greater access to mortgage credit, some industry experts say. During an Inside Mortgage Finance webinar this week, Jeffrey Naimon, a partner in the Washington, DC, office of the BuckleySandler law firm, said the industry is seeing a pendulum swing from the focal point of concern being loan pricing to loan access. “Especially during the time when subprime loans were available, there was a lot of concern that minority borrowers were being steered into higher-cost subprime loans,” he told attendees. “The adoption of the loan originator compensation rule by the Consumer Financial Protection Bureau affected...
An increase in existing home sales during May offers further evidence of an improved housing market, thanks in part to first-time buyers taking advantage of recent mortgage initiatives. The National Association of Realtors said the number of existing home sales rose to 5.35 million, up from 5.09 million in April, and up 9.2 percent from the 4.90 million transactions reported a year ago. That was the strongest sales rate since 2009. “We have seen...
Sometimes lost in the hoopla over the rising nonbank share of mortgage servicing is that banks have fallen in and out of love with the servicing market for decades.
J.P. Wieske, legislative liaison and public information officers for the WIC, confirmed that the state has made an information request, but would not address content.
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