House Rules Committee Expected to Clear Legislation to Tweak Points and Fees Definition under the ATR Rule. The House Rules Committee is expected to clear sometime this week H.R. 1153, “The Mortgage Choice Act,” legislation that would make two adjustments to the Truth in Lending Act (TILA) definition of points and fees to ensure greater consumer choice in mortgage and settlement services under the ability-to-repay/qualified mortgage rule.... OIG Has Mixed News for CFPB on Mobile Device Data Security. The CFPB got a dinged report card from the Office of Inspector General in terms of the security of mobile technology that bureau staff use. “Mobile devices help CFPB staff carry out their duties, but the portability of these devices heightens the risk of loss or theft of IT equipment and data,” said the OIG in explaining its motivation for evaluating the CFPB’s mobile encryption practices....

Reforming the housing-finance system under the plan from Sen. Bob Corker, R-TN, includes having at least a handful of guarantors, winding down the GSEs and establishing a mortgage insurance fund with private capital, according to a leaked draft making the rounds this week. The 80-page document seeks to promote competition in the marketplace by having five or six guarantors of conventional mortgage-backed securities, with none of them getting more than 20 percent to 25 percent of the market. Those new guarantors would be expected to launch within two years. Section 809 of the legislation spells out that “as promptly as practicable” the FHFA can greenlight Fannie Mae and Freddie Mac to “sell or transfer” their assets.

In the event that Congress can’t come to an agreement on fixing Fannie Mae and Freddie Mac, Treasury Secretary Steve Mnuchin said the department can take matters into its own hands. But he would rather leave it up to the lawmakers. “There are certain administrative options that we have,” he said, adding, “These entities are very complicated, and I would just say my strong preference would be to work with Congress on a bipartisan basis to reach a long-term solution.” Mnuchin reaffirmed his commitment to reforming the housing-finance system and support for the 30-year fixed-rate mortgage while testifying at a Committee on Banking, Housing, and Urban Affairs hearing Tuesday morning.

With housing-finance reform gaining momentum, the Milken Institute said bringing it over the finish line requires policymakers to address the technical issues in the proposed multiple-guarantor model or one based on private insurance. Failing to address those issues would leave the housing-finance system in worse shape than keeping Fannie Mae and Freddie Mac in conservatorship, the organization said in a new analysis. The multiple-guarantor model suggests attracting new guarantors to promote competition in the market and end the GSE duopoly. But the authors of the paper, which include Erik Kaplan, Michael Stegman, Phillip Swagel and Ted Tozer, said that’s a two-fold challenge that includes determining how to provide space for new guarantors to enter the...

GSE shareholders rights group Investors Unite took issue with a recent op/ed that suggested the Trump administration is preparing to return to the same housing-finance market that purportedly caused the financial crisis. In a piece penned for the Wall Street Journal, the American Enterprise Institute’s Peter Wallison warned that the Treasury Department is going down the wrong road on GSE reform. However, IU said Wallison's fears that the Federal Housing Finance Agency and Treasury are “marching back to the 1930’s” are unfounded. The group said in a blog posting that conservatives like Wallison will always claim that “statist prescriptions to economic questions are inevitably doomed to failure and almost always make matters worse.”

The Community Home Lenders Association wants to make sure that small lender protections like preserving the cash window and limiting the number of guarantors in the market are included in GSE reform legislation. Late last week, the trade group sent a letter to the Senate Committee on Banking, Housing and Urban Affairs about the importance of access for small lenders. “Fannie and Freddie must be preserved and recapitalized, pursuant to a utility model, with the capability to serve the entire small-lender market on fully competitive terms,” the letter said. CHLA said a utility model would work best for small lenders because it ensures their primary role of facilitating loan securitizations.

Ginnie Mae would become the linchpin of the conventional secondary mortgage market of the future, providing an explicit government guarantee for MBS issued by one of several new entities, under a plan being drafted by Senate Republicans.

Housing finance reform – including a potential liquidation of Fannie Mae and Freddie Mac – is moving along in the Senate with one major hurdle looming in the background: Democrats, for the most part, don’t want anything to do with it.

The Department of Justice has directed its prosecutors to seriously consider dismissing meritless False Claims Act complaints from whistleblowers if they do not serve the government’s interests and help defendants, including mortgage lenders, avoid lengthy and costly frivolous lawsuits.

Treasury Secretary Steven Mnuchin told members of the Senate Committee on Banking, Housing and Urban Affairs this week that he’s committed to housing-finance reform, wants to maintain the 30-year fixed-rate mortgage and get more private capital back into the housing market.