Republican and Democrat lawmakers in the Senate formally unveiled their ambitious plan to replace Fannie Mae and Freddie Mac with a new federal entity providing backstop guaranties for securities backed by high-quality conventional mortgages. Although they made a variety of changes to a “discussion draft” version of the legislation that has been widely circulated in recent weeks, the proposal still faces a huge hurdle in the House despite winning generally favorable reactions from industry groups. As it was introduced this week, S. 1217, the Housing Finance Reform and Taxpayer Protection Act of 2013, would create...
The Consumer Financial Protection Bureau, responding to input from the mortgage lending community, this week issued a number of proposed clarifications and revisions to its controversial new rule on loan originators, as well as other mortgage rules set to take effect in January 2014. Separately, CFPB Director Richard Cordray made clear that the agency will not delay implementation of the new rules, which include determining a borrower’s ability to repay and massive changes in mortgage servicing requirements. In a speech late last week, he promised to work with the industry to ensure as smooth an implementation process as possible. “We would make...
In a legal development that could be pivotal for the tenure of Richard Cordray as director of the Consumer Financial Protection Bureau – as well as the scope of the agency’s authority – the Supreme Court of the United States announced this week that it was taking on Noel Canning v. National Labor Relations Board. In Canning, the D.C. Circuit Court of Appeals ruled earlier this year that President Obama’s three recess appointments to the NLRB were unconstitutional. If the SCOTUS upholds that determination, it could eventually spell the end for Cordray’s tenure at the helm of the bureau, numerous attorneys concur, given that he was named to the CFPB as a recess appointment in the same announcement in which the President revealed his NLRB appointments. There’s more...
Servicers appear to have won a battle with consumer advocates regarding state adoption of servicing requirements that exceed those established by the Consumer Financial Protection Bureau. The Council of State Governments this weekend decided against recommending California’s “Homeowner’s Bill of Rights” as model legislation for states, according to a spokesman for the CSG. The Mortgage Bankers Association had warned that piecemeal adoption of California’s bill would increase costs and create confusion. California’s Homeowner’s Bill of Rights included...
Some non-agency participants have called for an immediate return to conforming loan limits of $417,000, which were in place in 2008 before Congress established “emergency” loan limits for high-cost areas.
The new Bachus bill could be a sign that House Republicans are making a fresh push to force a compromise with the Obama administration over the structure of the CFPB.
“Confusion and uncertainty around representations and warranties standards continue to cause lenders to add their own overlays to the existing GSE credit standards,” said MBA vice chairman Bill Cosgrove.
One of the best kept secrets in the servicing sector is a “bifurcated” mortgage program initiated by Fannie Mae that has been gathering momentum over the past six months.
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