FDIC Issues Updated Exam Procedures for TRID. The FDIC recently published revised interagency examination procedures for the new Truth in Lending Act /Real Estate Settlement Procedures Act integrated disclosures rule (TRID) in an effort to help its supervisory charges better cope with the new regulatory regime. The new guidance also addresses some issues related to the bureau’s mortgage servicing rules, providing an alternative definition of the term “small servicer” for certain nonprofit entities.It also deals with aspects of the ability-to-repay rule with its qualified mortgage standard. “The examination procedures should be helpful to financial institutions seeking to better understand the areas on which the FDIC will focus as part of the examination process,” the agency said in a recent ...
A number of trade groups that represent firms involved in the securitization market are pushing for an appeal to be heard in a case that has significant implications for the MBS and ABS markets. A ruling in May by the Second Circuit Court of Appeals in Madden v. Midland Funding determined that nonbanks shouldn’t receive the federal preemption of state law that has been allotted to banks under the National Bank Act. “The outcome of the case would significantly impair...
Estimating where MBS prices might be headed has never been an easy game – and thanks to the debt crisis in Greece and a stock meltdown in China, it’s become a whole lot more difficult of late. But for now, analysts and market watchers are certain of one thing: MBS prices have been volatile the past two weeks thanks to a flight to quality, forcing investors everywhere to buy U.S. Treasuries. And because mortgages track Treasuries, yields have fallen and prices have increased. “The Greek crisis already has taken...
With interest rates expected to increase at some point in the future, federal regulators continue to raise concerns about mortgage-related interest rate risk for banks. The risk perspective report issued last week by the Office of the Comptroller of the Currency was the sixth-consecutive semi-annual report from the federal regulator to warn about the risks posed to small banks by holdings of agency mortgage-backed securities. “Material concentrations in MBS could make...
No matter how cleverly hidden, the Securities and Exchange Commission can eventually ferret out bad business practices – a costly lesson learned by AlphaBridge Capital Management. The SEC ordered AlphaBridge, a registered hedge-fund adviser, and two of its principals to pay a $5 million penalty for allegedly inflating the prices of illiquid MBS held in hedge-fund portfolios managed by the firm. The SEC charged...
The Treasury Department didn’t meet key elements of federal guidelines for cost-benefit analysis when considering changes to the non-agency Home Affordable Modification Program that were implemented in November, according to the Government Accountability Office. In a report released last week, the GAO conceded that the Treasury isn’t required to follow cost-benefit guidance from the Office of Management and Budget when making changes to HAMP ...
The Department of Veterans Affairs has issued guidance to servicers regarding the use of an auction service in lieu of a foreclosure sale to terminate a VA loan. The goal is to get more from foreclosure-sale proceeds to lower the veteran’s mortgage debt. Mortgage holders may find it better to pursue VA loan termination through an auction service, rather than having to waive a greater amount at foreclosure, the VA said. It also may raise awareness among potential bidders and increase marketability and competition, the agency said. While traditional foreclosure methods have long been a part of the loan termination process, they limit servicers’ chances of obtaining greater proceeds at sale, which are applied to lower the veteran’s debt. Consequently, VA ends up paying more for a claim and assuming the liability of managing and marketing a conveyed real estate-owned property. In addition, state and county ...
Lending to veterans and members of the U.S. military is expected to trend up in the second half of 2015 as the economy improves further, wages rise and unemployment declines, predicts the country’s top VA lender. “We’re seeing increased activity in housing while house values have gone up modestly, which I expect will continue in the next couple of years,” said Stan Middleman, president and chief executive of Freedom Mortgage. It is a great time for veterans to purchase a home, Middleman said, and he would he like to see more vets become homeowners. However, despite the low interest rates, crisp and clear underwriting and no downpayment required, many veterans are still not taking advantage of the VA program as they should, he noted. Middleman feels he should advertise and market the VA product more. In the past seven months, Freedom Mortgage has added ...
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