The Federal Reserve Board Office of Inspector General is keeping a close watch on the CFPB as it continues to bolster its operational safeguards, Inspector General Mark Bialek said in the OIG’s recent semi-annual report to Congress. “The CFPB is continuing to develop policies, procedures, and other safeguards around its operations,” the IG said. “In its strategic plan, the CFPB has specifically indicated that it will focus on working to ensure ‘effective and efficient management, protection of the CFPB resources, rigorous...

Bank of America in Settlement Talks with CFPB. Bank of America is reportedly negotiating a settlement with the CFPB over allegations the firm undertook deceptive practices in the sale of credit card add-on products – specifically credit monitoring and debt cancellation products. According to Bloomberg, which broke the story, this development could mean a “winding down” of an industry-wide investigation by CFPB over credit card add-on products. The first enforcement action in this regard came last year against Capital...

Although non-agency MBS issuance has been a dicey proposition since rates spiked in late spring, residential lenders continue to eye the sector, liking the long-term outlook for jumbo securities. Two nonbanks taking a close look at the jumbo MBS market include Freedom Mortgage and W.J. Bradley Mortgage Capital, both established names in the agency MBS arena. In an interview with Inside MBS & ABS, Freedom Mortgage CEO and founder Stanley Middleman said...

Federal Reserve Vice Chair Janet Yellen, President Obama’s nominee to replace Fed Chairman Ben Bernanke, did not deviate in the slightest from Bernanke’s support for a policy that has resulted in the Fed buying two thirds of new agency MBS production, during her nomination hearing before the Senate Banking, Housing and Urban Affairs Committee this week. “The Federal Reserve is using its monetary policy tools to promote a more robust recovery,” Yellen said. “A strong recovery will ultimately enable the Fed to reduce its monetary accommodation and reliance on unconventional policy tools such as asset purchases. I believe that supporting the recovery today is the surest path to returning to a more normal approach to monetary policy.” Sen. Mike Crapo, R-ID, ranking member of the committee, took issue...

It is unclear how much money is needed to recapitalize RMIC, which is currently in a run-off mode, but Old Republic plans to contribute up to $50 million and raise additional funds in the capital markets to resurrect its MI subsidiaries.

Fitch Ratings released its “initial perspective” this week on how the Consumer Financial Protection Bureau’s ability-to-repay rule and requirements for qualified mortgages will impact ratings for new non-agency MBS. That makes Fitch the first rating service to provide formal insight on how the CFPB rule, which takes effect Jan. 10, will impact jumbo mortgage securitization. Fitch is considering requiring issuers to state the QM status of any mortgage to be included in an MBS, putting a greater emphasis on lender compliance and due diligence, and a focus on representations and warranties for compliance with the ATR rule and QM standards. “The rating approach will likely focus...

A report released this week by analysts at the Federal Reserve Bank of Richmond suggests that real estate investment trusts that invest in agency MBS don’t necessarily pose systemic risks. “While mortgage REITs clearly present risks to investors, it is not yet clear where mortgage REITs fall relative to other financial institutions in terms of their systemic risk,” according to an economic brief from the Richmond Fed. REITs held...

A Manhattan district court judge dismissed a lawsuit against Bank of America in which shareholders accused the bank of hiding a $10 billion fraud case, saying the defendant and several of its top executives were not obliged to reveal the lawsuit in advance to shareholders. Filed in 2011, the shareholders alleged that CEO Brian Moynihan and other BofA executives knew as early as February 2011 that insurer AIG intended to sue BofA in connection with $28 billion of MBS it bought from the bank and its Countrywide and Merrill Lynch acquisitions. According to the shareholders, the bank knew...

The Center for American Progress called on FHFA to keep g-fees at current levels “until there is reliable evidence” to suggest that the government needs more revenue to cover the cost of the guaranty.

It was the now-senior Democrat senator from Massachusetts, Elizabeth Warren, who faulted the Fed for enabling the financial crisis that prompted such an unconventional accommodative response in the first place.