The CFPB held a forum in Washington, DC, recently on campus banking that featured some clues about likely forthcoming regulatory requirements for lenders that provide such services. One initial finding provided at the event was that arrangements between financial institutions and institutions of higher education on many student banking products are not well understood. Another was that “affinity products” – those co-branded by a lender and an educational institution – do not always have more competitive features...
Overall, internal controls for the CFPB Government Travel Card program should be strengthened to ensure program integrity, according to a new report by the Federal Reserve Office of Inspector General, which audits the bureau. “While controls over the GTC issuance process were designed and operating effectively, we found that controls are not designed or operating effectively to prevent and detect fraudulent or unauthorized use of GTCs, and [to] provide reasonable assurance that cards are properly monitored and closed...
The Financial Regulatory Reform Initiative of the Bipartisan Policy Center, a Washington, DC, think tank, issued a report late last month with dozens of recommendations by which the CFPB could improve transparency and accountability. “Perhaps the most significant trend the task force discovered was that when the bureau operated in a transparent, open and iterative manner, repeatedly seeking input from all stakeholders throughout a process, the results were generally positive,” the report said. “However, when the bureau made...
Drop in GSE Loan Limit Will Harm Special Category QMs, Industry Says. In a letter late last week to the Federal Housing Finance Agency, the regulator of Fannie Mae, Freddie Mac and the Federal Home Loan Banks, the Mortgage Bankers Association warned against any lowering of the conforming loan limit for the size of mortgages that Fannie and Freddie can purchase. “Any FHFA action to lower loan limits would ... undermine the special category of QMs created by the CFPB for loans that are eligible for Fannie Mae and Freddie Mac purchase,” the MBA...
Certain members of the U.S. Senate want to see some type of analysis from FHFA on what impact lower loan limits will have on the housing and mortgage markets.
Clayton Holdings has long cooperated with members of the Residential MBS Working Group, but a change in personnel at the interagency group and a wide-ranging subpoena have strained the due diligence firm’s relationship with prosecutors, according to court filings. The U.S. Attorney’s Office for the District of Connecticut, on behalf of the RMBS Working Group, is seeking an order to compel Clayton to cooperate with a subpoena issued in early July. The subpoena relates to an investigation into 16 firms that participated in the issuance and underwriting of non-agency MBS from 2005 through 2007. The RMBS Working Group is looking into possible violations of the Financial Institutions Reform, Recovery and Enforcement Act. The subpoena essentially seeks...
Fannie Mae remains on track to securitize $30 billion in multifamily loans this year, compared with nearly $34 billion in 2012, which would meet the FHFA scorecard target.
A Manhattan federal judge last week rebuffed a motion by a number of major lenders to dismiss a bid by the Federal Deposit Insurance Corp. against the firms in connection with $388 million of non-agency MBS sold to the now-defunct Colonial Bank. The FDIC filed its complaint in August 2012, alleging that the defendants – including JPMorgan, CitiGroup, Ally Securities, First Horizon, Credit Suisse, Deutsche Bank, Merrill Lynch and Wells Fargo – placed poor-quality loans in the 11 underlying residential MBS and then misled investors by marking them as safe investments. Montgomery, AL-based Colonial Bank failed...
Fannie Mae plans to issue a $675 million risk-sharing securitization in a transaction that likely will hit the market by mid-October, according to potential investors who were briefed on the government-sponsored enterprise’s plans. Market participants said Fannie has contemplated issuing two such transactions by year-end, but the company isn’t talking about specifics, at least not yet. Still, the GSE is laying...
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