The government is warning mortgage lenders to settle their fair lending cases upfront instead of litigating.

The Consumer Financial Protection Bureau late last week issued a proposed rule to clarify a number of issues about qualified mortgages and other aspects of its ability-to-repay final rule promulgated in January that is set to take effect in early 2014. The agency proposed to clarify a key issue regarding the QM status of loans originally securitized by Fannie Mae or Freddie Mac, or insured by the FHA or VA, that are later subject to repurchase demands. Lenders have been concerned that such loans might lose their automatic QM status as agency loans, but the CFPB said they will not. “The fact that a [government-sponsored enterprise] or agency demands...

It was once thought that Basel III proposals capping the amount of mortgage servicing rights counting toward Tier 1 capital would force depositories to either sell MSRs or severely mark down the value of the asset. And although certain banks – including most of the largest – have indeed reduced the value of their MSRs, certain regionals still have sky-high ratios of servicing rights that are being counted toward this key measurement. According to new figures compiled by Sterne Agee, at least two depositories that rank among the top 25 residential servicers have Tier 1 capital measurements north of 25 percent: Flagstar Bank FSB at 55 percent and EverBank at 26 percent. The readings are as of year-end. The Basel III accords, which are on hold and have yet to be adopted, cap...

Consumer advocates are working to get state legislatures to pass servicing laws that are more stringent than national standards established by the Consumer Financial Protection Bureau and others. Servicers oppose the efforts, warning that deviation from uniform national standards will create uncertainty, add costs and conflict with existing laws. The Center for Responsible Lending and Consumers Union are urging states to “close gaps” in the CFPB’s pending servicing rules and the $25 billion national servicing settlement. Their top priority is a private right of action allowing borrowers to pause the foreclosure process while a servicer corrects violations of law and encourages servicers to consider loss mitigation alternatives. “Although the CFPB rules will be...

Potentially conflicting federal regulations over mortgage lending practices and standards from different government agencies increasingly appear to have the industry in a damned-if-you-do, damned-if-you-don’t position. During a webinar on fair lending challenges this week sponsored by Inside Mortgage Finance, Melanie Brody, a partner at K&L Gates, highlighted one of the challenges the industry faces in navigating between the Department of Housing and Urban Development’s new discriminatory effect rule and the Consumer Financial Protection Bureau’s ability-to-repay rule. “The problem is that ability-to-repay and qualified mortgage requirements add up...

Republicans in Congress worry about the CFPB collecting too much data on consumers but are their concerns overblown?

Standard and Poor's is fighting back against the federal government in its $5 billion MBS fraud case.

The non-agency/jumbo market cannot truly revive until Congress passes laws aiding transparency and decreasing risk to potential participants.

Stearns Lending, one of the fastest growing servicers in the U.S., has hired a new manager to help it with servicing acquisitions.

Residential lenders can rest easy: the GSEs aren't about to hike their net worth minimums. Also: the CFPB shows some love to banks.