While the Consumer Financial Protection Bureau has encouraged originations of loans that don’t meet standards for qualified mortgages, consumer advocates this week voiced skepticism about the products. At a meeting by the CFPB’s consumer advisory board, Gary Acosta, CEO of the National Association of Hispanic Real Estate Professionals, noted that most non-QM lenders appear to be focusing on jumbo borrowers. “Certainly that’s a gap,” he said of ...

Sources tell IMFnews that the Federal Housing Finance Agency is looking into the matter and is promoting the idea of capital minimums for nonbanks that do business with Fannie Mae and Freddie Mac.

A senior Treasury Department official pushed back against the idea of rehabilitating the two government-sponsored enterprises, noting in a speech late last week that the firms cannot be re-capitalized and reiterating the Obama administration’s commitment to wind down Fannie Mae and Freddie Mac. Mary Miller, the Treasury’s undersecretary for domestic finance, said that even if the two GSEs were allowed to stay in business and build up capital, it could take “at least” 20 years to recapitalize Fannie and Freddie. “During these 20 years, the taxpayer would remain...

Major post-crisis changes in the mortgage market should boost new issuance of residential MBS and have a long-lasting, positive impact on credit, according to Moody’s Investors Service. The rating service cites three key developments that will continue to support a strong credit environment for new MBS issuance, starting with the final rule on ability to repay and qualified mortgages. Moody’s believes the rule will help MBS performance by improving the reliability and accuracy of data lenders use to underwrite loans. Under the ATR rules, lenders are required...

This week, the Federal Reserve, as expected, maintained the current pace of its reduction of support of the housing and mortgage markets, reducing its net purchases of agency MBS to $15 billion per month (down from $20 billion), beginning in July. The Fed Open Market Committee also maintained its forward guidance regarding the federal funds rate target of between zero and 0.25 percent and reaffirmed its view that a highly accommodative stance of monetary policy remains appropriate. “Even after today’s action takes effect, we will continue...

The supply of single-family MBS outstanding fell modestly during the first quarter of 2014, reversing three consecutive quarters of modest growth, according to a new Inside MBS & ABS analysis. As of the end of March there was $6.371 trillion of single-family MBS outstanding, down 0.3 percent from the end of 2013. The supply of single-family MBS had been drifting lower since peaking at $7.007 trillion at the end of 2009 as refinance activity – which adds little to outstanding supply – dominated the agency market and non-agency MBS issuance gained little traction. For the last nine months of 2013, the MBS market finally began...[Includes two data charts]

RBS, which is effectively owned by the British government, still faces liability in private label security (PLS) matters tied to Greenwich Capital, a U.S. subsidiary that at one time was the largest nonprime issuer in the nation.

In a few weeks, Fannie Mae and Freddie Mac will release second quarter results, likely posting positive earnings, but the revenue figures will not include any major boost from legal settlements or the recapture of previously set-aside loan loss reserves. In short, what the two government-sponsored enterprises report in earnings for the second quarter should reflect what their operating profits might look like going forward, given normal market conditions. However, over the past six months, the CEOs of Fannie and Freddie and top officials at the Treasury Department – the owner of its senior preferred shares – have consistently argued...

Six months after the Consumer Financial Protection Bureau implemented rules for originations and servicing, it’s too early to tell what impact the rules have had, according to industry participants, consumer advocates and even officials at the CFPB. The CFPB this week convened a meeting of its consumer advisory board, a 19-member panel of consumer advocates and other industry participants. Board members had plenty to say about issues in the mortgage market, but evidence about the impact of the CFPB’s rules – the reason for the meeting – was scant. Abhishek Agarwal, the CFPB’s acting assistant director of mortgage markets, said...

Consumer Financial Protection Bureau Director Richard Cordray came under sustained partisan criticism from Republicans on the House Financial Services Committee this week over the joint National Mortgage Database the CFPB is working on with the Federal Housing Finance Agency. “We have learned since Director Cordray was last before the committee that the joint database project by the CFPB and the FHFA will undeniably collect personally identifiable information on millions of Americans in the National Mortgage Database,” said Committee Chairman Jeb Hensarling, R-TX. “I’m not speaking merely of names, addresses and phone numbers – though the database will certainly include those – but shockingly also people’s Social Security numbers, their race, religion, personal financial information, and even the GPS coordinates of their homes. If this is not considered personally identifiable information by the CFPB, then I don’t know what is.” A breach of this database could cause...