GSEs. Congress should be the one that makes the ultimate decision on deciding the future of Fannie Mae and Freddie Mac, according to a just-completed poll from Inside Mortgage Finance. Roughly, 28 percent of industry professionals picked Congress as the ultimate decider with the Federal Housing Finance Agency coming in a close second at 25 percent. Treasury finished third in the poll at 18 percent. Then again, the fourth choice – “I wish we had another option, but we don’t” actually garnered the highest response at 29 percent.Wells Fargo Analysis of GSEs’ Portfolio. Wells Fargo said that the GSEs’ portfolio needs to be able to buy out seriously delinquent loans from mortgage-backed securities and provide

The Consumer Financial Protection Bureau has put out some proposed guidance on the controversial matter of how much of the expanded data collected under the Home Mortgage Disclosure Act will be made available to the public. The bureau did not announce any delay in the effective date of the revamped HMDA rule, slated to take effect Jan. 1, 2018. First, the agency wants to exclude several of the loan-level data points from public disclosure, including the universal loan identifier, the application date, the date the financial institution took action and the property address. Also, it would shield the borrower’s credit score, the mortgage loan originator ID number and any result generated by an automated underwriting system. Additionally, the CFPB is...

Unless the Federal Housing Finance Agency acts soon, Fannie Mae and Freddie Mac will see their capital buffers fall to zero on Jan. 1, 2018. Having zero capital may not be a big deal, initially – but a new complication has arrived in the form of hurricanes Harvey and Irma. According to Tim Rood, chairman of The Collingwood Group, the government-sponsored enterprises are not looking at losses “that will cost tens of billions of dollars – but they don’t need to be. The capital buffer is small as it is. And if a credit event happens, it could wipe out the thin layer of capital they have in a hurry.” If Rood – a former Fannie executive – is correct, the GSEs might have...

Although flood insurance is required for Fannie Mae and Freddie Mac loans in designated flood areas, the recent hurricane activity in Houston and Florida has revealed that a number of borrowers didn’t have the coverage they were supposed to have. But getting to the root of the disconnect is complicated. Both government-sponsored enterprises said that it’s up to servicers to evaluate whether loans are in compliance with flood insurance requirements. But Fannie and Freddie said they also have their own systems in place to help ensure compliance. “Servicers are required...

Trade groups representing smaller mortgage lenders are asking the Trump administration for targeted regulatory relief for smaller independent mortgage bankers. In a joint letter to Treasury Secretary Steven Mnuchin this week, the Community Home Lenders Association and the Community Mortgage Lenders of America urged the administration to back legislation that would exempt independent mortgage lenders from the Consumer Financial Protection Bureau’s supervision, enforcement and third-party vendor audits. Support is also being sought for CFPB administrative action to provide such targeted relief. In June, Treasury issued...

Over the past several weeks, the Treasury Department has been meeting with several industry trade groups about the future of Fannie Mae and Freddie Mac, discussing – among other things – what to do about the impending “zero capital” problem as well as the topic of multiple guarantors. Treasury’s goal, these officials said, is to come up with a workable blueprint on the future of the government-sponsored enterprises and the nation’s housing finance system – changes that might touch Ginnie Mae as well. Late this week there was...

The Milken Institute – a nonpartisan think tank – established a new policy team last week to work on issues involving housing finance reform. Eric Kaplan was named director of Milken’s Housing Finance Program. He was a managing partner at Ranieri Strategies and continues to chair the Structured Finance Industry Group’s RMBS 3.0 effort. Michael Milken and Lewis Ranieri will co-chair a new Housing Advisory Council, which will inform the work of the team led by Kaplan ... [Includes two briefs]

When House Financial Services Committee Chairman Jeb Hensarling, R-TX, first introduced the second version of his Financial CHOICE Act, he acknowledged the comprehensive regulatory relief package might not make it through the Senate in one piece. He said he had a “short game” and a “long game,” suggesting he was open to small, incremental change while still pushing forward with more comprehensive change over the long haul. Last week, the Financial Institutions and Consumer Credit Subcommittee executed a little of that “short game” strategy, holding a hearing to consider a handful of legislative proposals to foster a more efficient federal financial regulatory regime, including two mortgage-related bills. The potentially more significant bill is...

Members of Congress wasted no time getting to work on the CFPB when they returned to the nation’s capital last week after the Labor Day holiday. A subcommittee of the House Financial Services Committee held a hearing to consider a few legislative proposals to foster a more efficient federal financial regulatory regime, including a soon-to-be introduced TRID Improvement Act. Slated to be introduced by Rep. French Hill, R-AR, the TRID Improvement Act of 2017 would amend the Real Estate Settlement Procedures Act and the Truth in Lending Act to expand the period in which a creditor is allowed to cure a good-faith violation on a loan estimate or closing disclosure from 60 to 210 days after consummation. The bill also ...

The Independent Community Bankers of America issued a statement midweek questioning – nine years after the fact – the federal takeover of Fannie Mae and Freddie Mac, saying it was the government’s way of putting the two mortgage giants in a “time out.” ICBA said the move by the Bush administration on Sept. 6, 2008, was made to “help calm the fears of global investors of GSE mortgage-backed securities.” MBS issued by Fannie and Freddie have an “implicit” government guarantee, not an explicit one. However, before and since the takeover, the GSEs have never missed a bond payment to MBS investors. ICBA said, “After being put into conservatorship – an action that has since been proven to be...