The House Financial Services Subcommittee on Housing, Insurance and Economic Opportunity will conduct another hearing on a Republican proposal to reform government mortgage programs and spur private sector participation in home financing. The Department of Housing and Urban Development, Ginnie Mae and the Rural Housing Services (RHS) will be asked to testify on the draft bill, the “FHA-Rural Regulatory Improvement Act,” which proposes reforms for the three agencies, enhanced lender enforcement tools, and return of private capital to the residential mortgage market. No date has been set for the hearing, and HUD has declined ...

The Mortgage Bankers Association has asked the FHA to allow the use of electronic signatures, or e-signatures, for all mortgage origination forms required by the agency. In a recent letter, the MBA requested Robert Ryan, acting assistant secretary for housing and FHA commissioner, to implement a revised policy authorizing e-signatures on all FHA loan documents. Electronic signatures are already acceptable under federal law and by the FHA on certain documents, the MBA noted. The use of e-signatures will help reduce processing issues that impair the homebuying process ...

Industry groups are recommending changes to FHA’s condominium rules to boost sales without putting pressure on the FHA’s Mutual Mortgage Insurance fund. Amending FHA rules on condo developments would enable lenders to move more real-estate-owned properties off their books as more units become eligible for buyers with FHA mortgages, the groups said. On the other hand, current condo owners would benefit from the increased owner-occupied ratio as vacant units are purchased, the groups noted. Improving the health of condo developments will reduce the risk to the insurance fund, they added. Condo loans are performing stronger ...

The U.S. Supreme Court did FHA lenders a small favor recently by limiting the use of evidence obtained from government sources in cases brought under the False Claim Act, lately the bane of mortgage lenders that originate government-insured loans and are accused of fraud and abusive lending practices. The opinion could discourage whistleblowers from bringing FCA lawsuits if they base their allegations not on their own experience but on information obtained through the federal Freedom of Information Act. In a May 16 decision in Schindler Elevator Corp. v. United States ex rel. Kirk, No. 10-88, the Supreme Court ruled ...

Congressional Republicans have at least temporarily prevented the Obama administration from appointing Elizabeth Warren as the first director of the Consumer Financial Protection Bureau. There was speculation that the White House would use the recess scheduled for the Senate this week to appoint Warren to lead the CFPB, an agency she helped design. Last week, 20 Senate Republicans wrote House Speaker John Boehner, R-OH, urging him not to pass the Senate’s adjournment resolution, keeping the Senate at least nominally in session and preventing Pres. Obama from making any recess appointments. In 2007, Democrats in the Senate used...

The Department of Justice has stepped up its fair lending enforcement initiatives and more cases are anticipated in the future, but with them comes a dilemma, according to industry sources. The DOJ currently has five lawsuits pending against lenders and several investigations, a DOJ insider said. The official said cases involve redlining, wholesale pricing, product steering and retail pricing. Wholesale issues and broker fee cases are likely to continue popping up, the source said. “The other big development for 2011 is going to be the...

Federal regulators should adopt a fair value method for measuring an MBS sponsor’s retained interest in non-agency transactions and make subtle changes in the proposed premium capture provisions in order to provide a framework that’s feasible for issuers, according to Redwood Trust officials. In a briefing with the Federal Housing Finance Agency, the company explained several key changes to the proposed inter-agency rule on risk retention as it would affect non-agency MBS. Redwood, the only company that has issued non-agency MBS backed by newly originated mortgages over the past few years, was joined by officials from Wells Fargo, which had been one of the most...

Savings institutions reported a total of $200.9 billion of residential MBS in their retained portfolios at the end of the first quarter of 2011, up marginally from the end of the previous year. But the heart of the industry – firms regulated by the Office of Thrift Supervision – actually posted a small decline in their MBS holdings during the period. The OTS itself is being phased out as a separate federal regulator, although the savings association charter will continue under the supervision of a dedicated unit in the Office of the Comptroller of the Currency. OTS-regulated thrifts held $157.6 billion of MBS in their portfolios at the end of... [Includes two data charts]

Pending inter-agency proposals to implement risk-retention requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act could undermine the return of private capital to the housing finance market, warned industry participants. Testifying this week during a House subcommittee hearing, the Mortgage Bankers Association and other critics of risk retention said that a narrow definition of a “qualified residential mortgage” and overemphasis on higher downpayment may have an adverse impact on credit availability. MBA Chairman Michael Berman told members of the House Financial Services Subcommittee on Insurance, Housing and Economic Opportunity that while...