CFPB Moves to Defend its Supervisory Information in Ocwen Case. The CFPB recently asked a federal judge to let it intervene in a whistleblower case brought against Ocwen Loan Servicing in order to protect the confidentiality of its supervisory information. “The bureau seeks to intervene for the limited purpose of invoking the bank examination privilege and the bureau’s regulations to protect confidential and privileged bureau supervisory records and information related to the bureau’s supervision of Ocwen,” the CFPB said in its motion filed in U.S. District Court for the Eastern District of Texas, Sherman Division. Among its legal arguments provided to U.S. District Judge Amos Mazzant, the CFPB said its regulatory and supervisory interest could be impaired if it is ...
CFPB Firmly in CHOICE Act’s Crosshairs. Since Inside the CFPB went to press last, House Financial Services Committee Chairman Jeb Hensarling, R-TX, released more details about the Republican alternative to replace the Dodd-Frank Act. Dubbed the Financial CHOICE (Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs) Act, the bill not only includes provisions to provide a qualified-mortgage safe harbor for any mortgage that has been held in portfolio by a depository institution since origination, but also a host of provisions targeting the structure of the CFPB itself. For instance, the bill could change the name of the CFPB to the “Consumer Financial Opportunity Commission (CFOC),” and task it with the dual mission of consumer protection and competitive markets, with ...
The Structured Finance Industry Group late last week published a final draft of the standards for due diligence firms to use when testing loans for compliance with the Truth in Lending Act/Real Estate Settlement Procedures Act disclosure rule. “The underlying premise of this documentation is to establish a best practices approach to pre-securitization testing logic that will drive the due diligence conducted by third-party review firms,” SFIG said. The RMBS 3.0 TRID Compliance Review Scope documentation addresses...
The Securities and Exchange Commission will re-propose a rule addressing conflicts of interest regarding certain securitizations, according to SEC Chair Mary Jo White. The rule required by the Dodd-Frank Act was originally proposed by the SEC in 2011. “It’s proved to be much more complicated than our experts in the agency envisioned,” White said last week at a hearing by the Senate Committee on Banking, Housing and Urban Affairs. Section 621 of the DFA requires...
Fannie Mae and Freddie Mac MBS guarantee fees are too high, given the strong credit profile of new business since the financial crisis, according to a diverse collection of real estate, banking and consumer interest groups. The groups called on the Federal Housing Finance Agency to lower MBS guarantee fees charged by the two government-sponsored enterprises, and to reduce or eliminate the loan-level pricing adjustments that are typically wrapped into the consumer’s note rate. The average g-fee has jumped from 22 basis points in 2009 to 58 bps in 2014, including the 10 bps surcharge that Congress mandated in 2011 to cover a payroll tax cut. Loan-level pricing adjustments can total...[Includes one data table]
Ginnie Mae is once again getting anxious about the growing – and large – presence of nonbanks that service the agency’s MBS, fearing a liquidity crisis could erupt because some firms rely too heavily on “non-traditional and very sophisticated funding mechanisms.” In a statement issued to Inside MBS & ABS this week, Ginnie contrasted nonbanks to depositories “who traditionally were the primary issuers of Ginnie Mae MBS.” The agency added...[Includes one data table]
The Federal Deposit Insurance Corp. this week revised its securitization safe-harbor rule to clarify loss mitigation standards for mortgage servicers to synchronize it with the similar requirements issued by the Consumer Financial Protection Bureau. The FDIC safe-harbor rule sets standards under which the agency will not attempt to capture assets of a failed bank that are transferred to qualifying securitizations. Under the previous rule, servicers of residential mortgages backing MBS that enjoy safe-harbor status were required to take loss mitigation action within 90 days after the loan becomes delinquent. In January 2013, the CFPB adopted...
Mortgage-finance reform doesn’t look to be anywhere on the horizon, but at some point government policymakers will have to figure out what to do with trillions of dollars of Fannie Mae and Freddie Mac MBS if the two government-sponsored enterprises are put out to pasture. In fact, the transition to a new GSE single security that’s scheduled to start in 2018 could become a test run of sorts for the even bigger changes ahead, according to a paper published by the Urban Institute. Crafted by five mortgage-industry veterans, “A More Promising Road to GSE Reform” is centered on the creation of a new government corporation that would replace Fannie and Freddie. The National Mortgage Reinsurance Corp. would issue...
Standard & Poor’s lost a little market share in the business of rating non-mortgage ABS during the first quarter of 2016, but the firm still was the most active player in the market, according to a new ranking by Inside MBS & ABS. S&P rated 58.4 percent of the $41.42 billion of non-mortgage ABS issued in early 2016, down from its 61.5 percent share for all of last year and its 64.1 percent share back in 2014. The company’s strong suit was in vehicle-finance ABS, where it rated 64.7 percent of the market, by dollar volume. While S&P’s share was up slightly in a few categories, its stake in the credit card ABS segment fell...[Includes two data tables]
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