The qualified residential mortgage requirements recently proposed by federal regulators could force banks to retain mortgages in portfolio instead of issuing non-agency mortgage-backed securities, according to industry participants. The Dodd-Frank Act requires that non-QRMs be subject to required risk retention of at least 5 percent. In August, federal regulators proposed aligning the definition for QRMs with the definition for qualified mortgages established by the Consumer Financial Protection Bureau ...

SunTrust Banks has agreed in principle with the Department of Housing and Urban Development and the Department of Justice to settle certain FHA-related claims. Separately, a federal judge in Texas refused to dismiss a government suit against two FHA lenders accused of manipulating HUD into insuring poorly underwritten loans which later resulted in massive losses to the agency. Announced on Oct. 10, SunTrust’s agreement with the government agencies is part of a broader resolution of certain legacy matters and repurchase agreements with Fannie Mae and Freddie Mac. SunTrust has agreed to settle certain ...

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 ...

More than one in five loans originated today won’t satisfy the criteria for safe harbor legal protections as qualified mortgages under the ability-to-repay rule from the Consumer Financial Protection Bureau, according to an analysis by ComplianceEase.

The QM Plus option would be limited to loans secured by a principal dwelling. No subordinate liens would be permitted for purchase-money transactions.

Still, one industry lobbyist warns that with Cory Booker’s election to the Senate, the White House may be willing to exert more influence to advance Mel Watt’s nomination to head the FHFA.

The Consumer Financial Protection Bureau this week updated certain provisions in its complex new mortgage servicing rules, most notably the interplay between the servicing rules and the U.S. bankruptcy code, and the Fair Debt Collection Practices Act. “As servicing implementation enters its final phases, we heard from many sources that it was important to address these remaining issues to ensure a smooth transition and provide certainty to the market,” said CFPB Director Richard Cordray. “When mortgage servicers better understand the rules they have to follow, that is better for consumers.” One of the latest hot buttons to emerge regarding the servicing rules has been...

Golf is for slackers. Inside Mortgage Finance knows of at least four veteran mortgage banking executives who, after “retiring,” are looking to reenter the business.

After years of claiming that regulatory uncertainty was holding back mortgage originations, lenders appeared to be on their way toward certainty as the Consumer Financial Protection Bureau established a definition for qualified mortgages at the beginning of this year. However, industry participants suggest that few originations of non-QMs are likely in the next few years due to uncertainty regarding litigation. “We don’t know how the courts are going to interpret the rule,” Jon Wishnia, a partner at the law firm of Lowenstein Sandler, said last week at the ABS East conference sponsored by Information Management Network in Miami. “That will really drive where the market goes.” CFPB officials have said...