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 ]

The nation’s subservicers increased their contracts to a record high $1.350 trillion at March 31 as tougher regulations continued to play a key role in the shifting of processing chores away from depositories to nonbanks. On a sequential basis, contracts increased by 7.1 percent in the first quarter and 14.4 percent compared to March 31, 2014, according to a new Inside Mortgage Finance ranking. Only four banks – Flagstar, Cenlar, Wells Fargo and Bank of America – were among the top 20 subservicers. Overall, at March 31, subservicers were...[Includes one data table]

While the characteristics of loans included in jumbo mortgage-backed securities continue to be strong overall, industry analysts note that there are significant differences in “soft” underwriting guidelines used by lenders. “Not all underwriting guidelines, and exceptions to guidelines, are created equal,” analysts at Morningstar Credit Ratings cautioned in a recent report. “Some originators recently have introduced programs that make qualifying for financing easier and require less income documentation.” The company, which is making a new push to rate jumbo MBS, reviewed the guidelines of a number of the most active jumbo originators and aggregators ...

A recent ruling by the New York Court of Appeals regarding the statute of limitations for representation-and-warranty claims on non-agency mortgage-backed securities has caused concerns for some participants in the new-issue jumbo MBS market. In ACE Securities v. DB Structured Products, the court ruled that the statute of limitations for claims of breaches of reps and warrants starts when a deal is closed, not when a potential breach is discovered. Lawyers involved in non-agency MBS were divided on how the ruling would impact issuance going forward ...

Financial institution regulators in Washington state have charged Quicken Loans with using false, deceptive and misleading advertisements to target veterans and active military members with adjustable-rate refinance offers. According to a complaint filed by the Division of Consumer Services of the Washington State Department of Financial Institutions, Quicken Loans falsely implied in its direct mailings that it is associated with the Department of Veteran Affairs. The VA provides guarantees to fixed- and adjustable-rate mortgage loans to veterans and servicemembers through the agency’s Home Loan Guaranty program. Quicken Loans allegedly used graphics in its 5/1 ARM solicitations that resembled the seal of the VA, with the words “Governed By: United States Veterans Department.” In addition, the Michigan-based lender allegedly used an ...

The frequently-asked-questions guidance to using the FHA’s consolidated Single Family Policy Handbook is good to have though it shows just how complicated the FHA’s mortgage origination process is, according to lenders. In fact, the updated FHA handbook could still be confusing to borrowers simply because a lot more information is concentrated in one source, lenders said. According to the FHA, the more than 290 FAQs will enable lenders to make operation adjustments before the handbook goes into effect on Sept. 14, 2015. The FAQs are for information purposes only and do not apply to current FHA policies. They do not establish or modify policy contained in the handbook. The FAQs reiterate information in the handbook under headings such as Credit Underwriting, Closing and Insuring, FHA System Support and Consumer Information. Industry observers noted that the FAQs did not ...

The Senate Banking, Housing and Urban Affairs Committee this week passed the Financial Regulatory Improvement Act of 2015 by a 12 to 10 margin along party lines. The measure, introduced by committee Chairman Richard Shelby, R-AL, includes a number of GSE provisions. Title VII of the bill prohibits the use of increases in Fannie Mae and Freddie Mac guaranty fees to offset outlays or reductions in revenues for “any purpose other than enterprise business functions or housing finance reform as passed by the Congress in the future.” The bill was approved by the Senate Banking, Housing and Urban Affairs Committee. Another provision would prohibit the U.S. Treasury from selling or...

The Department of Agriculture’s Rural Housing Service has issued a final rule creating a certified loan-application packaging process for the agency single-family loan guaranteed housing program.Published in the April 29 Federal Register, the rule also establishes standards for packagers of loan applications, who are independent from RHS but play a key role in providing Section 502 rural home loan programs to potential homeowners. The final rule will take effect on July 28, 2015. Specifically, the rule addresses the weaknesses in RHS’ loan-application process and integrates the lessons learned from a loan-packaging pilot launched in 2010. The packager gathers and submits the information needed for RHS to determine whether a loan applicant is eligible for ...

In another display of multijurisdictional cooperation, the CFPB and the Maryland Attorney General last week brought an enforcement action against a Maryland-based title company and its executives, alleging they participated in a mortgage kickback scheme, trading cash and marketing services in exchange for referrals. The complaint names Genuine Title, LLC, as well as Jay Zukerberg, Brandon Glickstein, Gary Klopp, Adam Mandelberg, William Peterson, and Angela Pobletts, along with a number of limited-liability companies controlled by certain defendants. The CFPB and Maryland allege that Zukerberg and Glickstein developed and operated schemes to give loan officers marketing services and cash payments in exchange for referrals of title work. The kickback schemes violated the Real Estate Settlement Procedures Act, which prohibits giving a ...