Mortgage lending oversight by the CFPB and the states will likely be far more interrelated and integrated in the future than might be expected – this in response to the rulemaking and enforcement jurisdictional shake out that occurred as a result of the Dodd-Frank Act, a top regulator told industry participants at a recent mortgage lending conference. “The CFPB can’t cover everything, because of resources – it isn’t that big of an agency. But more importantly, it lacks the legislative authority to cover everything that...
The U.S. District Court for the District of Massachusetts recently decertified a class of borrowers who claimed that their mortgage lender violated the Equal Credit Opportunity Act and the Fair Housing Act by allowing its brokers to impose charges not related to a borrower's creditworthiness. In Barrett v. Option One Mortgage Corp., No. 08-10157, 2012 WL 4076465, the borrowers, who are African-American, claimed that the lender’s loan pricing policy had a disparate impact on African-American borrowers who...
Low house prices remained the biggest obstacle to borrowers being approved for mortgage credit in 2011, according to a new Inside the CFPB analysis of Home Mortgage Disclosure Act data. Some 23.4 percent of application rejections in 2011 were because of insufficient collateral, roughly even with the 23.8 percent rate back in 2010. Although there was some firming up of house prices in a number of markets last year, the overall market continued to be under significant stress. Low house values were a bigger...
√House Financial Services Committee Member Patrick McHenry, R-NC, apparently believes there could be an overhaul of the Dodd-Frank Wall Street Reform and Consumer Protection Act if Republican presidential contender Mitt Romney beats President Obama in next month’s election, according to one credit union industry lobbyist. McHenry recently appeared before a meeting of credit union representatives where he reportedly made the remarks. …
Gibbs & Bruns, the law firm representing non-agency MBS investors that reached a precedent-setting settlement with Bank of America, is now targeting Wells Fargo and Morgan Stanley. The law firm’s clients issued Wells and Morgan Stanley a notice of non-performance last week identifying covenants in pooling and servicing agreements that the servicers have allegedly failed to perform. “The holders’ notice alleges that each of these failures has materially affected the rights of the certificate holders and constitutes an ongoing event of default in the servicer’s performance under the relevant PSAs,” the law firm said. Bank of America received...
The Federal Reserve is launching its aggressive new campaign to boost economic growth by gobbling up the lion’s share of new agency MBS production in a stagnant market. The volume of outstanding single-family agency MBS grew by just $651 million during the second quarter of 2012, according to a new Inside MBS & ABS analysis. At $5.382 trillion, the agency MBS market at the end of June was down 0.5 percent from the same point in 2011. Because the non-agency MBS market is...[Includes two data charts]
The third and latest round of quantitative easing rolled out earlier this month by the Federal Reserve will sweeten MBS demand far above supply, but it will ultimately provide only a negligible boost to mortgage refinance activity, analysts say. The Federal Open Market Committee announced QE3 on Sept. 13, making a commitment to buy an additional $40 billion in agency MBS a month and saying that it would continue buying “if the outlook for the labor market does not improve substantially.” The New York Fed has been buying about $27.9 billion of agency MBS per month since October 2011 in an effort to reinvest principal payments from its MBS holdings back into the mortgage securities market. An analysis by Bank of America Merrill Lynch this week found...
A presidential task force created to investigate the pooling, sale and securitization of residential mortgages is now ready to pursue action against those whose business practices contributed to the financial crisis, according to New York Attorney General Eric Schneiderman. Certain financial institutions have contacted outside counsel after Schneiderman, chairman of the Residential MBS Working Group, told reporters the group is ready to take legal action “sooner rather than later.” A spokesman for the New York AG’s office declined to provide details but confirmed that there are ongoing investigations and that there would be upcoming announcements. “We are looking at conduct that led...
It looks like the controversial risk-retention proposal won’t be issued by federal regulators until sometime next year, as major components of the Dodd-Frank Act remain in limbo. “I think much of the Dodd-Frank regulatory process is on hold until after the elections, and we’re unlikely to see decisions on most major issues until sometime in 2013,” said Steven Abrahams, an analyst at Deutsche Bank Securities. “The only process that seems to be rolling is the one run by the Consumer Financial Protection Bureau to define mortgage origination and servicing standards.” As he sees it, “the first half of next year will probably see...
Researchers with the Federal Reserve Bank of New York have found additional evidence to support New York Fed President William Dudley’s call for an increase in streamlined refinances for current borrowers with agency mortgages. They suggest that further changes to the Home Affordable Refinance Program to prompt refis and prepayments are not a “zero sum game” between borrowers and agency MBS investors. In January, Dudley said obstacles have prevented...
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