More Industry Advice for a Post-Cordray CFPB. Competitive Enterprise Institute financial policy expert John Berlau said last week, “Richard Cordray’s impending resignation as director of the CFPB is long overdue.... Growth of CFPB Leveling Off. The total number of employees at the CFPB came to 1,668 for fiscal year 2017, up 20 positions from the year before, according to the bureau’s latest financial statements for the last two years.... GAO Signs Off on CFPB Financial Statements. The Government Accountability Office audited the CFPB’s financial statements for fiscal years 2016 and 2017, and found they are “presented fairly, in all material respects, in accordance with U.S. generally accepted accounting principles.”...

With the Senate and the House having both recently released their tax proposals, it’s the House plan to cut corporate taxes in 2018 that would impact the GSEs by threatening their deferred tax assets. A corporate tax cut would likely force Fannie Mae and Freddie Mac to take draws from the U.S. Treasury. This is especially true in light of the fact that by Jan. 1, 2018, neither GSE will be allowed to hold a capital buffer to absorb any losses. A cut to corporate taxes means a write down of some Fannie/Freddie DTAs, including mortgage-related assets, allowances for bad loans, derivatives-related basis differences and deferred fees, which are all currently held at a higher tax rate.

With several recent hearings on sustainable housing finance under its belt, the House Financial Services Committee appears to be exploring GSE reform in depth, but no word yet on when and what that may look like. The HFSC’s Subcommittee on Insurance and Housing held three hearings over a three-week period with the latest taking place last week. A financial services committee staffer wouldn’t confirm whether a piece of legislation is being worked on, but she said that committee Chair Jeb Hensarling, R-TX, believes housing finance reform is a priority for the committee this Congress.

Three analysts at Wells Fargo Securities discussed in a new report this week what could happen to the agency MBS market as a result of pending tax reform, one version of which was passed by the U.S. House of Representatives this week. As always, the devil is in the details; hence, the bitter in-fighting among entrenched interests on Capitol Hill.

Republican leaders in the Senate detailed their tax reform legislation late last week, with some differences compared with the bill making its way through the House. While the Senate bill would leave the existing mortgage interest deduction largely untouched, participants in the housing industry raised a number of other concerns.

Industry stakeholders are increasingly dour on the prospect of Federal Housing Finance Agency Director Mel Watt acting to rectify the government-sponsored enterprises’ capital buffer issue before yearend, but there’s growing hope that bipartisan reform legislation might be enacted next year.

Regulatory relief got a sudden and surprising boost on Capitol Hill early this week when the Senate Banking, Housing and Urban Affairs Committee unexpectedly passed a bipartisan package of provisions making it easier for lenders to extend mortgage credit to borrowers.

Texas sticks out like a sore thumb in its regulation of home-equity lending, but the swelling will be reduced somewhat after Lone Star voters approved an amendment to the state’s constitution that will loosen some of the rules.

Members of the House who are drafting housing-finance reform legislation are tackling a number of issues that impact the non-agency market. At a hearing last week by the House Financial Services Subcommittee on Housing and Insurance, Chairman Sean Duffy, R-WI, said the panel’s recent hearings were aimed at getting feedback for a new legislative proposal. Duffy also stressed that the effort should be bipartisan. “I believe that if we’re going to be successful not just in ...

A proposal in the House Republican tax reform bill significantly lowering the corporate tax rate, at first glance, may seem to put mortgage real estate investment trusts at a competitive disadvantage with non-REITs. However, the disparity would remain beneficial for REITs, according to tax experts.