The Consumer Financial Protection Bureau’s ability-to-repay requirements and standards for qualified mortgages will prompt greater rating-service scrutiny of lenders that participate in the non-agency mortgage-backed security market. Fitch Ratings noted last week that its new criteria for non-agency MBS with mortgages that have loan applications that were received on or after Jan. 10 will require additional analysis, including an expanded review of underwriting processes ...

Bipartisan mortgage-reform legislation under consideration in the Senate could open significant opportunities for firms currently involved in the non-agency market, according to industry analysts. Firms with jumbo conduit operations and real estate investment trusts that invest in non-agency mortgage-backed securities could see their potential markets increase significantly under the proposed system. Sens. Tim Johnson, D-SD, and Mike Crapo, R-ID, have proposed a ...

Bank of America this week agreed to settle lawsuits filed by the Federal Housing Finance Agency regarding non-agency mortgage-backed securities purchased by Fannie Mae and Freddie Mac. Eleven of the 18 non-agency MBS lawsuits filed by the FHFA in 2011 have now been settled and the claims against BofA and its affiliates were by far the largest. BofA said it agreed to make a total of $5.8 billion in payments to Fannie and Freddie as part of the settlement and spend $3.5 billion to ...

The Structured Finance Industry Group said it’s scheduled to meet with the Treasury Department next week regarding return of private capital to the mortgage market. The trade group has a meeting on the same topic with the Federal Housing Finance Agency scheduled for April 16. W.J. Bradley Mortgage Capital announced a number of new jumbo product offerings last week. The lender now offers loans with balances of up to $3.0 million and ... [Includes seven briefs]

Origination of FHA-insured reverse mortgages fell in the fourth quarter as borrowing costs increased and loan amounts shrank due to tighter agency rules for these loan products, according to Inside FHA Lending’s analysis of agency data. The FHA reported $15.3 billion Home Equity Conversion Morgages originations for 2013, which was up 20.6 percent from $12.7 billion in 2012. Production, however, fell 12.6 percent quarter over quarter as policy changes designed to stabilize the ailing Mutual Mortgage Insurance Fund and help ensure that HECM borrowers can sustain themselves for longer periods of time took effect on Sept. 30. The changes include limiting disbursements at loan closing, or during the initial 12 months after closing, to 60 percent of the initial principal limit. Borrowers who draw more than 60 percent will pay ... [1 chart]

As former Fannie Mae executive William Maloni put it: “More money for Uncle Sam!” The Treasury Department ultimately will benefit since it gets to “sweep” almost of Fannie’s and Freddie’s earnings.

The scorecard was ushered in by former Acting Director Edward DeMarco who stepped down from his post in early January, to be replaced by former North Carolina Congressman Mel Watt.

Among other things, the proposed Mortgage Securities Cooperative would be the only issuer of government-backed MBS. The MSC would be governed on a one-member, one-vote basis.

Carrington Mortgage made a big splash this week, unveiling a plan to offer to fund FHA loans for borrowers with credit scores as low as 550, but already some skeptics are openly questioning just how many such loans Carrington – or any company – can produce. Carrington Executive Vice President Ray Brousseau declined to estimate production. The company’s minimum FICO score for FHA loans had been 580. The expanded FHA program will be...[Includes one data chart]

The cost of borrowing for many homebuyers could rise as a consequence of the Senate’s newest housing finance reform legislation if it’s enacted as is, according to an analysis by Barclays. The bill, filed last week by Sens. Tim Johnson, D-SD, and Mike Crapo, R-ID, would replace Fannie Mae and Freddie Mac with a new mortgage-backed securities program for conventional mortgages that requires private investors to take the first 10 percent of losses. The Barclays analysis found...