Members of Congress have left Washington, DC, for their summer recess, and mortgage industry representatives are using the time to plan strategy and educate lawmakers on key issues to help propel a number of measures across the finish line before the year ends. The most time-sensitive issues are reauthorizing the national flood insurance program and setting budgets for FHA and Ginnie Mae activity in fiscal 2018, which begins Oct. 1, 2017. Lawmakers will be looking to deal with these in September. Authority for the National Flood Insurance Program expires...

Mortgage industry groups cannot seem to agree on whether there should be more than two guarantors of conventional mortgage-backed securities once Congress and the White House figure out what to do with Fannie Mae and Freddie Mac. The Mortgage Bankers Association firmly supports multiple guarantors, arguing that more competition is better. But groups representing smaller lenders worry about the burden of maintaining relationships with many secondary-market outlets and the potential for an uneven playing field. David Stevens, president and CEO of the MBA, said...

Fannie Mae and Freddie Mac earnings remained strong in the second quarter with the GSEs posting a combined $4.86 billion in net income, but concerns about the soon to be non-existent capital buffer also remain. The GSEs’ $9.85 billion in net income for the first half of the year more than doubled their combined earnings from the same time period in 2016, according to their second quarter earnings statements released last week. While Fannie posted a net income of $3.20 billion, a 15.4 percent quarterly improvement, Freddie witnessed a 24.7 percent decline to $1.66 billion in the second quarter.

Although Federal Housing Finance Agency Director Mel Watt is concerned about the GSE capital buffer falling to zero early next year, it appears he’s unlikely to take administrative action anytime soon to fix the situation. At least that’s the message conveyed in a new letter Watt penned to National Association of Realtors President William Brown. According to the Aug. 9 letter, Watt notes he’s “very concerned” about the issue because it “increases the probability of a draw which could cause an adverse market reaction.” The regulator adds: “However, I am sensitive to the prospect that whatever steps FHFA could take might be misperceived as either an effort...

The Mortgage Bankers Association released a paper focused on how the various aspects of its reform proposal could impact consumer costs and concluded any impact would be minimal.The trade group explained that costs under the MBA proposal, which calls for multiple privately owned guarantors, are likely to be similar to costs in today’s mortgage market. “While the precise impact on consumer costs from true housing-finance reform may be difficult to gauge, we know that attempts to shortcut reform through recap and release would lead to much higher costs for consumers,” said the MBA, adding that global investors have been clear that they don’t want to return to a world of implicit guarantees.

The Mortgage Bankers Association said its housing-finance reform proposal would likely have little impact on consumer mortgage costs. Whether costs to consumers are modestly higher or lower will depend on how the different components suggested for reform are determined through the political process, according to the MBA. “While the precise impact on consumer costs from true housing-finance reform may be difficult to gauge, we know...

For months now, the industry has expected the Trump administration to tap veteran mortgage banker David Kittle to be the new president of Ginnie Mae – but so far it’s a no go. According to industry officials who claim to have knowledge of the matter, Kittle is still the top pick, and they’re not sure why his name hasn’t shown up on the White House “Nominations & Appointments” webpage. Kittle, so far, has declined to comment. Industry officials interviewed by Inside MBS & ABS believe...

In a move that would benefit the secondary market for loans made by national banks, members in the Senate and the House of Representatives recently introduced legislation to clarify that interest rates on certain loans remain unchanged after the sale or transfer of the loan. In the Senate, Democrat Mark Warner of Virginia late last week introduced S. 1642, which would amend the National Bank Act to clarify that loans which are valid when made remain valid when they’re sold, even to buyers subject to different state law. Similar language would be added to the Home Owners’ Loan Act, the Federal Credit Union Act, and the Federal Deposit Insurance Act. Joining Warner in sponsoring the bill were...

The Senate Committee on Appropriations last week voted 31 to 0 to set aside $40.2 billion in discretionary spending for the Department of Housing and Urban Development for FY 2018. The full committee vote on July 31 followed a subcommittee vote earlier in the week. The Senate funding bill includes $400 billion in new loan commitments under the FHA Mutual Mortgage Insurance Fund, including the Home Equity Conversion Mortgage program, and $130 million for FHA’s administrative expenses. However, the bill did not grant a HUD request for authority to impose a lender fee to help cover FHA’s information technology upgrades, risk management and quality-assurance improvements. The House HUD spending bill provided $130 million for administrative costs and added another $5 million for IT enhancement. House appropriators passed their version late last month. The Senate bill also ...

The private mortgage insurance industry urged the Consumer Financial Protection Bureau this week to consider including the qualified-mortgage standards of the FHA, VA and the U.S. Department of Agriculture in its assessment of the ability-to-repay/QM rule. In a comment letter, industry trade group U.S. Mortgage Insurers said it would be impossible to perform a full assessment of the ATR/QM rule without considering the different federal agency QM rules. If it does not expand the scope of its assessment, the CFPB should at least consider the impact the rules have on consumers in relation to the agency QM rules. In May, the CFPB notified stakeholders of its plan to evaluate the effectiveness of the ATR/QM rule in terms of its benefits and costs. Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, which established new standards for mortgage lending, including requiring lenders to assess consumers’ ability to repay. The statute also established a class of “qualified mortgage” loans that cannot have certain risky product features and are presumed to comply with the ATR requirement.