During a conference call last week with members of the news media, Massachusetts Democrat Barney Frank, the one-time chairman of the House Financial Services Committee, defended the CFPB and criticized congressional Republicans for their attack on the agency, accusing them of hypocrisy on multiple fronts. “I thought Republicans were concerned about excessive power in the executive branch, that they want to defend their congressional prerogative,” said Frank. But during the debate on the Dodd-Frank Act, Congress decided quite consciously that we would have an independent, single director, independent in the sense that the president could not fire that person at will,” he noted. “That was a congressional restriction on presidential appointment power, no question about it.” But now, apparently their ...

More changes, or at least additional guidance, may be in the offing for the pending Home Mortgage Disclosure Act rule from the Consumer Financial Protection Bureau that is scheduled to take effect next year, agency Director Richard Cordray said last week during an appearance on Capitol Hill. During a hearing of the House Financial Services Committee, Rep. Brad Sherman, D-CA, pointed out, “Studies have shown that in some geographic areas, it is possible to determine the identity of nearly 100 percent of the borrowers using the data that lenders are required to collect and report by the Home Mortgage Disclosure Act. This is despite the fact that that act supposedly provides for anonymous data in its final form.” Sherman also ...

New York State Aligns State Law With TRID. New York Gov. Andrew Cuomo, D, recently signed into law Senate Bill S982, legislation that tweaks the existing state legal definition of the “consummation” of a mortgage loan to synchronize with the Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure Rule promulgated by the CFPB.... Industry Need to Get TRID-Compliant Boosts DocMagic’s Bottom Line. Industry vendor DocMagic, based in Torrance, CA, late last week reported a 42 percent increase in revenue for 2016, due in large part to industry demand for products that enable compliance with the CFPB’s Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure Rule, otherwise known as TRID....

There are multiple sides to the Treasury sweep debate but despite rumors to the contrary, the GSEs sent the bulk of their fourth-quarter earnings to the Treasury at the end of March, as scheduled. While some advocate for suspending the profit sweep, others question whether the timing of future payments could be altered to reduce the likelihood that either Fannie Mae or Freddie Mac might need another bailout. In early March, industry officials and lobbyists began voicing their belief that the FHFA, possibly with Treasury’s blessing, might alter or suspend the quarterly dividends. One possibility floated was changing the four quarterly payments to one annual one. Speculation may have been fueled...

Treasury Secretary Steven Mnuchin made it clear after being nominated that resolving the conservatorships of Fannie Mae and Freddie Mac would be a top priority for his department. And although Mnuchin will clearly be a player in the debate, the policy “ax” on the issue will be Craig Phillips, recently tapped to serve as counselor with an agenda that includes fixing the two government-sponsored enterprises. Most mortgage professionals have applauded President Trump’s pick of Mnuchin and now Phillips. Mnuchin was the former head of Goldman Sachs’ MBS department, and Phillips was a former managing director of Morgan Stanley’s fixed-income division. Phillips was...

The USDA Rural Development has issued guidance instructing approved lenders to continue using the two-tiered income limit pilot for the agency’s Section 502 single-family housing programs. Launched in June last year, the pilot bands together the income limits of households with one to four members and with 5-8 members. The USDA banding process significantly increases the number of rural households that are eligible for Rural Development’s direct home loan program and the Home Repair Loan and Grant Program, the agency said. The pilot is based on the Department of Housing and Urban Development’s one-to-eight person income limits, which the department releases every year. Until last year, the USDA had been using the HUD income limits for its single- and multifamily housing programs, with the exception of the USDA’s “hold harmless” clause and the moderate-income banding allowed in the ...

Correction: There was an error in the total number reported for Home Equity Conversion Mortgage originations in 2015 in the March 17, 2017, issue of Inside FHA/VA Lending. The correct total is $16.0 billion. HUD Secretary Ben Carson Visits Dallas/Ft. Worth. Housing and Urban Development Secretary Ben Carson continued his national listening tour this week in Dallas/Ft. Worth to learn more about HUD’s public housing programs. Carson embarked on a national listening tour March 15 at a Detroit high school bearing his name President Trump recently released his proposed preliminary FY 2018 budget, which showed among other things a drastic $6.2 billion reduction in funding for public housing assistance and affordable housing. Carson said the discretionary budget plan promotes fiscal responsibility at HUD by “promoting better efficiencies and ...

With House Republicans set to resume work on legislation to overhaul provisions in the Dodd-Frank Act, mortgage lenders testified at a hearing this week calling for changes to standards for qualified mortgages. “As a result of some of the constraints in the QM definition, many borrowers who should qualify for a QM are unable to access safe, sustainable and affordable mortgage credit,” said David Motley, president of Colonial Companies and chairman-elect of the Mortgage Bankers Association. He made the comments at a hearing by the House Financial Services Subcommittee on Financial Institutions and Consumer Credit. The MBA urged...

The new political landscape in Washington, DC, has intersected with the judicial movement on the PHH Corp. v. CFPB case to give the mortgage industry some hope that the bureau can be scaled back. But the task is complicated by the fact that the new administration is headed by a political novice, and by the fact that the industry itself is not particularly unified about what kind of changes should be made. During a recent webinar sponsored by Inside Mortgage Finance, three top industry attorneys discussed some of the prospects for change on three separate fronts of the federal government: the executive branch, the legislative branch and the judicial branch. If there’s a single theme or take-away from the event,...

With the topic of regulatory reform experiencing a resurgence of attention since the Trump administration moved into the White House, the U.S. mortgage insurance industry is calling for greater uniformity when it comes to the nitty gritty details of the ability-to-repay rule and its qualified-mortgage standard. One area of particular concern for mortgage insurers is the differences between the CFPB’s QM rule for conventional mortgages and the Department of Housing and Urban Development’s QM rule for FHA-insured mortgages. These differences include different debt-to-income caps, different formulae to calculate points and fees, and different standards for higher-cost mortgages. According to U.S. Mortgage Insurers, these differences incentivize greater reliance on programs of the U.S. government, increasing risk to taxpayers. “While consistency and ...