The Consumer Financial Protection Bureau any day now could release its long-awaited regulation finalizing its proposed amendments to its 2013 mortgage servicing rules, posing yet another compliance challenge and requiring one more round of systems upgrades from the industry as a result. According to a consensus of industry experts, the two biggest subject areas have to do with bankruptcy proceedings and successors in interest. “On the eve of the servicing rules taking effect, the bureau made...

The Government Accountability Office said regulatory uncertainty and other barriers may inhibit the use of private flood insurance. The Flood Insurance Market Parity and Modernization Act, H.R. 2901, which passed the House unanimously in April, expands flood insurance options by including private flood insurance. The bill also lifts certain federal restrictions placed on insurance companies and gives states more flexibility to license and regulate private flood insurance. The GAO reported...

A recent ruling by the Washington State Supreme Court goes against servicers’ practice of changing the lock on a property before a foreclosure. While such practices are generally allowed under mortgage contracts and have been approved by other states, the Washington state court ruling is favorable to 3,600 borrowers in a class-action lawsuit and could cause further issues for servicers. Laura Jordan v. Nationstar Mortgage centered on Nationstar’s actions after the borrower defaulted on her mortgage. A vendor acting on behalf of Nationstar inspected the property, deemed it to be vacant and changed the lock on the front door. The vendor also left a lockbox on the door with the key to the new lock and the borrower was provided access to the key. Jordan represents...

Smaller banks and nonbanks are rallying behind legislation recently introduced to relieve community mortgage lenders from some of the scrutiny placed on larger banks. Rep. Roger Williams, R-TX, authored H.R. 5907, the Community Mortgage Lenders Regulatory Act of 2016, and emphasized that community mortgage lenders engaged in traditional mortgage lending were not responsible for the recent mortgage crisis. Scott Olson, director of the Community Home Lenders Association, told...

Analysts at Morningstar Credit Ratings suggest that most non-agency MBS backed by new mortgages will be subject to full reviews due to uncertainty regarding the TILA-RESPA Integrated Disclosure rule.

The new guidance includes a number of provisions, including a requirement for lenders to escrow PACE payments to protect the FHA from losing collateral in a tax sale.

To help address racial disparities in lending, the NCRC called for expansion of the Community Reinvestment Act, stronger enforcement of the CRA and strengthening of the government-sponsored enterprises’ affordable housing goals.

A new tax policy proposed by the Internal Revenue Service in April aimed at corporate “earnings stripping” tax avoidance maneuvers could cause significant problems for the MBS and ABS markets, according to industry participants. The proposed rule from the IRS under Section 385 of the Internal Revenue Code of 1986 would treat related-party debt as equity, aiming to reduce internal restructurings at foreign corporations by establishing new taxes. The Structured Finance Industry Group’s Tax Policy Committee submitted...

The secondary market for mortgages with TRID mortgage-disclosure errors has stayed fairly constant the past few months, but there are new signs the business is getting a bit long in the tooth. According to interviews with investors and brokerage firms involved in the scratch-and-dent market, the auction of mortgages with disclosure problems (of all varying degrees) continues, but fewer sales are closing. Mid America Mortgage, Addison, TX, one of the most active buyers in the space, said...

The average daily trading volume in agency MBS totaled $212.6 billion in June, a slight decline from the month prior, according to the Securities Industry and Financial Markets Association. Still, that’s a far cry better than the low established back in December of 2015 when the reading came in at $149.2 billion. June’s performance came...