As the wait for the highly anticipated “qualified mortgage” final rule continues, its impact on FHA lending programs remains uncertain. Concerns have been raised over the possibility that the final QM rule the Consumer Financial Protection Bureau is finalizing may establish a “safe harbor” for prime loans with a maximum debt-to-income ratio of up to 43 percent. This could have implications for FHA loans, which allow higher back-end ratios under certain circumstances, according to some lenders and industry participants. At what point the DTI ratios will ...

The CFPB has initiated a public comment period to determine how the Credit Card Accountability Responsibility and Disclosure Act of 2009 has affected the daily lives of consumers and the behavior of industry. Passage of the act was expressly intended to “establish fair and transparent practices related to the extension of credit” in the credit card market. To achieve these purposes, the law changed the requirements applicable to credit card pricing in a number of significant respects. Prior to the CARD Act, the...

The latest CFPB-related work plan of the Federal Reserve Office of Inspector General indicates the OIG is working on an evaluation of the bureau’s annual budget process, a political flash point on Capitol Hill for Republican critics and opponents of the agency. “As an independent agency within the Federal Reserve System, the CFPB is funded principally by the Federal Reserve System in amounts determined by the CFPB director as necessary to carry out the agency’s operations, subject to limits established in the...

The CFPB has issued the examination procedures it plans to use to make sure private student lenders comply with federal consumer financial laws. The CFPB claims the authority to supervise large banks, as well as nonbanks, that make private student loans. The bureau said the new procedures may be used to examine both types of lenders. “Examiners will be assessing whether student lenders have the appropriate processes in place to prevent harm to borrowers,” the CFPB said. Among the requirements federal consumer financial...

CFPB Reorganizing Supervision Offices. Now that the bureau has launched its separate supervision programs for large banks and for nonbanks, it has decided to realign its headquarters supervisory staff. The CFPB will continue to have two supervision offices at its headquarters, but instead of one office for nonbank supervision and another for large bank supervision, one office will focus on examinations and another on policy. The examinations team will oversee the CFPB’s efforts to recruit, train and commission...

The FHA and VA have announced loan limit adjustments in many counties even as disparities with conventional loan limits persist in 2013, according to a new analysis by Inside FHA Lending. FHA loan limits for forward mortgages will increase in 2013 for 19 counties, 10 of which are part of the Houston metropolitan area. In those counties, the one-unit limit is going up just $1,500 to $272,550. The remaining counties are in Alaska. Congress authorized the “emergency” loan limits for high-costs markets – still $729,750 for FHA and $625,500 for Fannie Mae and Freddie Mac –to run through Dec. 31, 2013. The base loan limit nationwide and in ...

The Department of Housing and Urban Development reported strong note sales of more than $1.7 billion under the expanded Distressed Asset Stabilization Program (DASP) and announced another big sale in the first quarter of 2013. Preliminary results from the sale in September showed record participation among interested bidders on 13 pools. In total, the 13 pools went to 10 different entities, among them nonprofit and community-based organizations, according to HUD. While still in the process of settling the transactions, the FHA said it is very ...

Despite the renewed focus on the FHA in the wake of the recent actuarial report, analysts do not expect any meaningful action in 2013 given the important role that FHA plays in supporting the housing market. But that does not mean that the Department of Housing and Urban Development will be sitting idly by next year. It has a lot of additional measures to implement to protect and preserve the FHA Mutual Mortgage Insurance Fund, HUD Secretary Shaun Donovan told Senate lawmakers recently during a hearing on the condition of the fund. The changes are both ...

An FHA lender need not cancel a scheduled foreclosure sale to reassess a borrower if the property is non-owner occupied, vacant or an investment property, according to newly issued agency guidance. Under such circumstances, the lender does not have to cancel a foreclosure sale date because loss mitigation retention options are only available to owner-occupants, the FHA explained in a frequently-asked-questions guidance on the revised requirements for loss mitigation retention options. The FHA announced the changes last month in an effort to ...

The FHA has made changes to its internal systems to make sure lenders are paying the correct recertification fees based on the number of FHA-approved branch offices. Currently, an approved lender is required to pay annual recertification fees within 90 days of the end of the fiscal year to maintain approval for the next annual reporting period. Recertification fees cover the home office and each FHA-approved branch office. Previously, lenders were allowed to terminate branch offices at the start of the annual reporting period but before paying the recertification fees. However, system flaws caused ...