The CFPB is putting into place a prioritization framework, apportioning examination, investigation and fair lending resources across product types, and it may well prove to be particularly significant for nonbank entities. “A specific charge of the bureau is to attempt to level the playing field between banks and nonbank entities relative to compliance with federal consumer financial laws,” said CFPB Deputy Director Steven Antonakes in a speech before the Federal Deposit Insurance Corp.’s Advisory Committee on Economic...

Opposition to lower loan limits for the government-sponsored enterprises appears to be increasing by the day as the Federal Housing Finance Agency considers the issue. Support from non-agency participants for a reduction – at least in the high-cost loan limits – has been proportional to the non-agency share of total mortgage originations: about one in 10. “My sense is that there will never be a good time to reduce the conforming loan limit,” said Mark Zandi, chief economist at Moody’s Analytics ...

The strength of the non-agency jumbo market is a major factor in efforts to reduce the government-sponsored enterprises’ market share, according to a former advisor for the Obama administration. “If the GSEs pull back too quickly, it will change the whole discussion,” said Jim Parrott, owner of Falling Creek Advisors and a senior advisor at the National Economic Council until earlier this year. “The political feedback will be very quick and ruthless. It would make GSE reform extremely difficult.” ...

Fannie Mae priced its first capital markets risk-sharing transaction this week, attracting even more investors than those that initially bought into a similar transaction from Freddie Mac. While non-agency mortgage-backed security investors haven’t shown significant interest in jumbo MBS recently, many are looking toward the government-sponsored enterprises’ risk-sharing deals. “There is voracious investor demand for risk-sharing,” said Randal Johnson, a director in the structured credit group at Deutsche Bank ...

The Department of Housing and Urban Development’s proposed “qualified mortgage” rule attaches certain conditions to QM treatment that may complicate matters for participating lenders, said attorneys with K&L Gates in Washington, DC. On Sept. 30, the Department of Housing and Urban Development published its own proposed QM rule for FHA loans. The CFPB rule takes effect on Jan. 14, 2014, and will apply to FHA loans until HUD issues a final rule. Under the CFPB rule, many FHA loans would not qualify for the rule’s safe harbor because the higher mortgage insurance premiums would make them “higher priced mortgage loans.” Thus, in order to ...

Two surviving spouses of deceased reverse mortgage borrowers won their case against the Department of Housing and Urban Development after a U.S. court found HUD in violation of federal law for failing to protect the spouses from foreclosure. The court’s decision marks a turning point for surviving spouses, such as Robert Bennett of Annapolis, MD, and Leila Joseph of Brooklyn, NY, and ensures that they will be protected against eviction and foreclosure, despite the loss of their husband or wife, said Jean Constantine-Davis, a senior attorney with the AARP Foundation Litigation. In March 2011, the AARP and the law firm of Mehri & Skalet of Washington, DC, filed ...

FHA loan originations declined by 10.5 percent in August from July, following a downward trend that seems to suggest that private mortgage insurance companies are gaining the upper hand against their biggest government-backed competitor. Volume dropped to $16.8 billion in August from $18.8 billion in July, and from $22.1 billion a year ago, according to Inside FHA Lending’s analysis of FHA data. Purchase-mortgage originations comprised 68.7 percent of FHA business for the month as rising interest rates slowed refinancing activity. Despite the increase in purchase lending, FHA lenders noted it was ... [1 chart]

The Department of Housing and Urban Development’s inadequate response and poor implementation of corrective actions recommended by its own inspector general did little to stop claim files from squeezing through without reviews. HUD’s Office of the Inspector General urged Charles Coulter, deputy assistant secretary for single-family housing, to go back and implement the IG’s recommendations properly. The process HUD said it had implemented had failed to select all FHA loans that met review criteria, resulting in more than ...

Bucking the stampede of mortgage- and housing-industry interests campaigning against a cut in the conforming loan limits for Fannie Mae and Freddie Mac, the American Securitization Forum is urging the Federal Housing Finance Agency to go ahead and shrink the footprint of the two government-sponsored enterprises. The ASF urged the FHFA to use its authority “to at least marginally reduce” GSE loan limits to lessen Fannie’s and Freddie’s “vice grip on the mortgage market finance market” and encourage the return of private capital. “Such marginal reductions in conforming loan limits would appropriately increase...

It’s no secret that Fannie Mae this year has been pushing some of its newly minted seller/servicers to use the cash window as opposed to swap MBS transactions, but the government-sponsored enterprise may be weighing an “either/or” policy. A spokesman for the GSE told Inside MBS & ABS that he has no knowledge of such a stern choice being given to Fannie customers, but he noted that the secondary market giant continues to wonder why so many new seller/servicers have MBS contracts, but do not actively issue. He said...