The CFPB Office of Inspector General plans to complete one audit, two evaluations and two reviews of the bureau during the first quarter of 2016, according to the OIG’s latest work plan, released early this week. First on the list is an audit of the CFPB’s space-planning activities, largely in response to the bureau’s renovation of its headquarters building. “We will determine whether the CFPB has established adequate controls to properly manage its space needs and whether the CFPB is complying with applicable requirements,” the OIG said. Next is an evaluation of the CFPB’s coordination with external organizations to implement targeted consumer education. “We are assessing the effectiveness of the CFPB’s coordination with external organizations to implement consumer education efforts ...
Facing the possibility of a potential False Claims Act lawsuit, PHH Corp. is reconsidering its participation in the FHA mortgage insurance program. Though PHH’s FHA segment represents only 3 percent of its mortgage volume over the past 12 months, the company will proceed cautiously as it evaluates the risk-adjusted return of FHA products and programs, said Glenn Messina, PHH president and chief executive.Ranked 50th among FHA lenders as of June 30, 2015, PHH expects more regulatory challenges in 2016 as well as rising compliance costs, said Messina during a third-quarter earnings call. In its latest quarterly filing, PHH disclosed receiving a subpoena from the inspector general of the Department of Housing and Urban Development for documents related to, among other things, FHA loan origination and underwriting practices. Like several other FHA lenders, PHH is ...
The Federal Home Loan Bank System is seeking to boost its share of government-backed lending and the Ginnie Mae market with a new servicing-release option for FHA, VA and rural housing mortgages that are sold into the Mortgage Partnership Finance program. The new feature adds to an existing servicing-retained execution in the MPF Government Mortgage-Backed Securities program. The current servicing-retained component requires participating lenders to service loans they originate and sell into the MPF conduit. The servicing-release option from Nationstar Mortgage, a top-10 mortgage servicer based in Dallas, will provide lenders with greater pricing flexibility so they can become more competitive in the communities they serve, said Matt Feldman, president of the Chicago FHLB. Only FHLBank members that are participants in MPF can use the government MBS program. In order to ...
In an apparent confirmation of the fears of some industry representatives, CFPB Director Richard Cordray seemed to blame technology vendors for some of the failures the mortgage industry might have in complying with the bureau’s Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure (TRID) rule. “Quite frankly, I have been disturbed by reports I have been hearing about the vendors on whom so many of you rely,” Cordray said in a speech at the Mortgage Bankers Association’s annual convention in San Diego recently. “Some vendors performed poorly in getting their work done in a timely manner, and they unfairly put many of you on the spot with changes at the last minute or even past the due date,” ...
As rumors ran rampant over the past few weeks about the White House possibly looking to end GSE conservatorship before a new administration takes reign, Treasury and White House officials said this week there are no plans in the works to recapitalize and release the GSEs. “None of us should be misled by the increasingly noisy chorus of the advocates of recap and release,” said Michael Stegman, the White House’s senior policy director for housing, speaking at this week’s annual Mortgage Bankers Association conference. He added that doing so would “turn back the clock on the run-up to the crisis,” which he said would be “bad judgment and poor stewardship of taxpayer’s interest.”
The nation’s seven active mortgage insurance firms expect to be fully compliant with the Federal Housing Finance Agency’s new capital eligibility rules by the yearend deadline – if they aren’t already – but now there’s a new worry: more regulations may be on the way. According to sources inside the MI sector, the FHFA is taking a close look at the use of reinsurance by private mortgage insurers with an eye toward capping it. “FHFA is worried that reinsurance firms may not pay,” said one MI official who spoke extensively on the topic under the condition he and his firm not be identified. “They want to reduce the credit you get for using reinsurance firms.” “The FHFA is trying...
The CFPB and all of the prudential banking regulators will recognize the good-faith efforts of the mortgage industry to comply with the bureau’s Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure (TRID) rule as of its effective date of Oct. 3, 2015. “During initial examinations for compliance with the rule, the agencies’ examiners will evaluate an institution’s compliance management system and overall efforts to come into compliance, recognizing the scope and scale of changes necessary for each supervised institution to achieve effective compliance,” said CFPB Director Richard Cordray, in a letter to industry trade groups. “Examiners will expect supervised entities to make good-faith efforts to comply with the rule’s requirements in a timely manner,” the director continued. “Specifically,...
The Securities Industry and Financial Markets Association emphasized its concerns about the GSEs’ single security initiative in a letter sent last week to the Federal Housing Finance Agency. A large part of SIFMA’s letter focused on a lack of alignment between Fannie Mae and Freddie Mac. The trade group believes that the FHFA doesn’t have a strong enough role in maintaining the policy and practice alignment of the GSEs. “This causes significant concern about the potential outcome of the initiative,” the letter said, adding that the effective alignment of policies and practices, to achieve a continuing alignment to security performance, is the single most important factor in the success, or lack thereof, of the initiative.
The Securities and Exchange Commission recently loosened risk-retention requirements somewhat for collateralized loan obligations, giving in to requests from industry participants. Risk-retention requirements for non-residential securitized products, including CLOs, take effect Dec, 24, 2016. Federal regulators issued a final rule for risk-retention requirements in October 2014 and CLO industry participants have been working since then to try and get regulators to address issues created by the final rule. In mid-July, Crescent Capital Group wrote...
Ginnie Mae issuance of government-insured mortgage-backed securities rose a whopping 47.3 percent in the second quarter of 2015 from the previous quarter, powered by a robust FHA refinancing volume, according to an Inside FHA/VA Lending analysis of agency data. Government-backed Ginnie MBS production in the second quarter totaled $117.5 billion, up from $79.8 billion in the prior quarter. Volume year-to-date also increased by 57.7 percent from the first six months of last year. From May to June, government-backed securitization increased a modest 2.9 percent. FHA loans comprised 62.6 percent of Ginnie MBS issuance in the second quarter while VA accounted for 33.7 percent. Securitized loans with a Rural Housing Service guaranty represented 3.6 percent of total Ginnie MBS issuance during the period. FHA loan securitization was robust in the second quarter, as volume ... [ Charts ]