The Department of Housing and Urban Development has released a final rule defining a “qualified mortgage” that is insured by the FHA. The final rule will be effective on Jan. 10, 2014. The HUD rule builds off the QM/Ability-to-Repay rule, which the Consumer Financial Protection Bureau finalized earlier this year. The Dodd-Frank Act requires HUD to propose a QM definition that is aligned with the ability-to-repay criteria set out in the Truth in Lending Act and with the agency’s mission to ...

“We are expecting to see people trying to inflate their income or hiding and downplaying their monthly obligations,” said Interthinx's Ann Fulmer.

The Consumer Financial Protection Bureau may formally address the treatment of affiliate fees in the points-and-fees calculation for qualified mortgages under the agency’s ability-to-repay rule, which takes effect in just a few weeks. Until such a decision is made, industry representatives have put together some guidance on how to exclude such fees from that 3 percent cap. “There has been significant industry confusion concerning the extent to which affiliate fees are included in the points-and-fees calculation, particularly when only a portion of a fee is retained by an affiliate,” the Mortgage Bankers Association said early this week. The trade group has put together a document outlining its understanding of the CFPB’s definitive guidance, based on discussions with bureau staff, on the treatment of affiliate fees in both the qualified mortgage and the Home Ownership and Equity Protection Act points-and-fees calculations. “Please keep in mind...

A ton of new servicing deals have hit the market. But will regulatory scrutiny throw a monkey wrench into the transactions?

Fitch says nonbank servicers resolve delinquencies at a significantly faster pace than banks, partly due to the loss-mitigation requirements for the five big banks included in the $25 billion national servicing settlement.

Banks maintain huge reserves of roughly $21.3 billion to cover residential loan repurchase requests, Inside Mortgage Trends discovered.

The Financial Accounting Standards Board has begun meeting with various industry groups to get a clearer sense of where it needs to go to develop the most appropriate accounting treatment for to-be-announced transactions. Last Friday, FASB met with both the Mortgage Bankers Association and the Securities Industry and Financial Markets Association to vet some of the board’s tentative decisions on its project for accounting for repos, dollar rolls and TBA transactions, and the likely effect those decisions could have. Meetings with other groups have taken place...

Brokers and the trade groups that represent them believe new regulations from the Consumer Financial Protection Bureau put them at a competitive advantage to lenders that actually fund mortgages.

“Our estimate of legal and rep and warrant reserves for the largest banks is a total of roughly $60 billion,” S&P writes in a new report. “We estimate that the largest banks may need to pay out an additional $55 billion to $105 billion to settle mortgage-related issues, some of which is already accounted for in these reserves.”

Freddie Mac this week racked up another settlement in the GSE’s recent ongoing series of mortgage buyback deals when Bank of America announced it will pay $404 million to settle repurchase obligations tied to loans sold between 2000 and 2009. The payment also compensates Freddie for “certain past losses and potential future losses relating to denials, rescissions and cancellations of mortgage insurance,” the GSE said. The amount is less $13 million of repurchases already made.