The secondary market for bulk agency mortgage servicing rights is beginning to pick up a decent head of steam, but one factor is holding it back from a full-throttle: worries about prepayment speeds. “We’ve had one month of low prepayment numbers,” said Mark Garland, president of MountainView Servicing Group, Denver. “A couple of more months would be better.” According to investment bankers who work the market, although rates have been on a steady climb since the November election – the yield on the benchmark 10-year Treasury is...

House Financial Services Committee Chairman Jeb Hensarling, R-TX, is looking to retain the CFPB, restructure key parts of the agency, and drastically limit its authority, Inside the CFPB has learned.According to a draft memorandum of the major changes to Hensarling’s Financial CHOICE Act, now dubbed CHOICE Act 2.0, the bureau “is to be retained and restructured as a civil law enforcement agency similar to the Federal Trade Commission, with additional restrictions on its authority,” as follows: Sole director, removable by the president at will. Rule-making authority limited to enumerated statutes. Unfair, deceptive acts or practices authority repealed in full. Supervision repealed. Consumer complaint database repealed.•Market monitoring authority repealed. Enforcement powers limited to cease-and-desist and civil investigative demand/subpoena powers....

Hensarling Threatens to Use Budget Reconciliation Process to Push Through CHOICE Act 2.0. Rep. Jeb Hensarling, R-TX, chairman of the House Financial Services Committee, raised some industry eyebrows last week when details of his new, more aggressive Financial CHOICE Act got leaked to the press, and he indicated he might use the budget reconciliation process to push the bill through Congress.... CFPB Brings Legal Action Against Debt Relief Law Firms, Attorneys. The CFPB recently sued Howard Law PC, Williamson Law Firm LLC, and Williamson & Howard LLP, as well as attorneys Vincent Howard and Lawrence Williamson, in federal court, accusing them of collaborating to charge illegal fees to consumers looking for debt relief....

Treasury secretary nominee Steve Mnuchin still has GSE reform high on his list, according to one of President Trump’s top economic advisors. Meanwhile, speculation abounds as to whether there’s an administrative solution to GSE reform absent any legislative action. After some back and forth on the topic since the announcement of Mnuchin’s nomination his subsequent comments on the GSEs, economic advisor Gary Cohen said in national media outlets late last week that GSE reform is definitely a priority for Mnuchin. In fact, he said that it’s something Mnuchin’s spent a lot of time working on. “Once he gets approved and confirmed, Steve will be taking that on as one of this early priorities. So we definitely have some plans...

Uneconomic price competition coupled with Congressional discord are some of the concerns analysts have expressed about the Mortgage Bankers Association’s newly released plan for GSE reform. The MBA’s proposal recommends multiple privately owned guarantors, preferably more than two, to increase competition in the market. Fannie Mae and Freddie Mac would be the first two and the MBA suggests that new guarantors receive a charter to enhance competition. “The more market participants that compete, the better for consumers, the economy and the system,” said Rodrigo Lopez, MBA chairman. GSE Reform Principles and Guardrails also suggests that Congress sanction an “explicit government guarantee for eligible securities in order to entice domestic and foreign investors to keep buying...

Industry observers and groups expressed support this week for President Trump’s move to put the Dodd-Frank Act under the microscope, with an eye toward scaling back its regulatory burden and possibly replacing at least parts of it with more pro-market reforms. Late last week, Trump signed an executive order that directs the Treasury secretary to consult with the heads of the agencies that comprise the Financial Stability Oversight Council, review the current regulatory structure for the U.S. financial system, and report back in 120 days. The order also lays...

The need to preserve liquidity and transparency in the existing to-be-announced market was an important component of the Mortgage Bankers Association’s newly-released plan for housing finance reform, according to Deutsche Bank Securities. Jeana Curro, research analyst with Deutsche, said a handful of provisions in the MBA’s latest proposal stand out as improvements from the industry group’s previous ideas on how to reform Fannie Mae and Freddie Mac. She agreed...

President Trump late last week signed an executive order laying out his “core principles” for regulating the U.S. financial system, and giving the head of the Treasury Department 120 days to detail how the current massive regulatory regime measures up. Trump’s core principles include fostering informed consumer choices, preventing bailouts, promoting economic growth, tailoring regulations and ensuring regulatory accountability. The broadly-worded order specifies, “Nothing in this order shall be construed to impair or otherwise affect ... the authority granted by law to an executive department or agency, or the head thereof.” The order was...

Late last week, a three-judge panel of the U.S. District Court of Appeals for the District of Columbia Circuit agreed with arguments made by PHH Corp. and blocked three separate efforts to intervene in the dispute the lender has with the Consumer Financial Protection Bureau. In a simple, single-page order, the three judges "ordered that the motions be denied." The ruling affects...

Ben Carson, who is expected to be confirmed soon as the next secretary of the Department of Housing and Urban Development, said he’s looking for an experienced mortgage professional to guide the FHA program during his tenure. In recent years, the top FHA job has been held by people with more experience in government than in the mortgage business. The last industry veteran in the post was Dave Stevens, who brought years of mortgage finance experience when he took the job in the first Obama administration. He left in 2011 to become president and CEO of the Mortgage Bankers Association. In response to written questions from Senate Democrats, Carson said...