It appears that looser underwriting has been driven by an increase in the number of lenders participating in the HARP program and copy-cat efforts that allow for LTVs of greater than 95 percent.
A mortgage employee who who merely states general information such as “we offer rates as low as 3% to qualified consumers” would not be considered a loan originator.
There is a whole other level of supervisory and enforcement authority available to the bureau under a director approved with the consent of the Senate, mostly having to do with non-bank lending.
The expanded system would include a more comprehensive method for measuring lenders’ loss mitigation activities as well as their compliance with FHA’s default servicing requirements.
The Congressman argues that if the two are not allowed pay down their draws from Treasury “then any future funds sent" to the U.S. should be reinvested in the housing market.
Private MBS investors will likely see reduced competition from the Federal Reserve later this year if the central bank begins to slow down its purchases of agency MBS, but there is also likely to be a sharp drop in new MBS supply at the same time. The Federal Open Market Committee made no changes in its policy of adding $40 billion a month to its massive $1.165 trillion portfolio of agency MBS, in addition to reinvesting payments from its agency debt and MBS holdings. It also promised to closely monitor economic and financial developments and stands prepared to increase or decrease its MBS purchases. But Fed Chairman Ben Bernanke later indicated...[Includes two data charts]
Fed Chairman Ben Bernanke indicated that the central bank is leaning toward scaling down its MBS purchases later this year, and that rapidly rising mortgage interest rates don’t pose a major threat to the fledgling housing recovery.
The Mortgage Bankers Association called for the Federal Housing Finance Agency to update standards for representations and warranties provided to the government-sponsored enterprises and asked for more transparent underwriting standards. “Confusion and uncertainty around representations and warranties standards continue to cause lenders to add their own overlays to the existing GSE credit standards,” said Bill Cosgrove, the MBA’s vice chairman. “As a result, lenders are only offering mortgages to those with the most pristine credit for fear that any borrower default will trigger costly repurchase requests.” The MBA detailed...
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