California. In Balderas v. Countrywide Bank, N.A., the U.S. Court of Appeals for the Ninth Circuit recently ruled that the Truth In Lending Acts delivery obligation requires borrowers be permitted to keep written copies of the right-to-rescind notice. The court noted that to deliver the notice as per TILA requires a permanent physical transfer from one party to another, as opposed to momentary delivery. Illinois. Earlier this month, the Department of Financial and Professional Regulations published amendments to the states mortgage originator licensing requirements. One change ...
Consumer Financial Protection Bureau. Comments Wanted on Mortgage-Related Rules. The Consumer Financial Protection Bureau is asking for public comment on currently approved information collections associated with certain recently published interim final rules having to do with mortgage lending. One such rule has to do with the Secure and Fair Enforcement for Mortgage Licensing Act (Regulation G) 12 CFR Part 1007.The information collection will improve the flow of information to and between regulators; provide accountability and ...
The House Oversight and Government Reform Subcommittee on TARP and Financial Services plans to hold a hearing on the afternoon of Tuesday, Jan. 24, on the subject of how the Consumer Financial Protection Bureau will function under its new director, Richard Cordray. A witness list had not been provided as of press time. The event is scheduled to be streamed live on the committees website, http://oversight.house.gov/. The new Consumer Financial Protection Bureau is investigating PHH Corp. to see if the lender may have violated the Real Estate Settlement Procedures Act (and possibly ...
There has been little progress in the development of new ways to pay for credit ratings even though researchers have seven proposed systems designed to address the conflicts of interest that have plagued the non-agency MBS market, according to a new Government Accountability Office report. The GAO noted that there were five significant ratings compensation models when it last reported on the subject in 2010, and two more have since been proposed. But the authors of these models have done little additional work to flesh them out, and none has been adopted in the marketplace, the GAO said. Given that the [rating...
Insurance companies will likely increase their investment in non-agency residential MBS, with market and regulatory influences encouraging movement toward hybrid and floating-rate securities as opposed to fixed-rate bonds, according to some top securities industry analysts. The primary driver on the regulatory level is the anticipated slight rise in capital requirements expected to result from a recent action by the National Association of Insurance Commissioners, the association of state insurance regulators. On Dec. 27, 2011, the NAIC released updated pricing designations that...
The Consumer Financial Protection Bureau will place an emphasis on nontraditional and subprime mortgages, according to origination exam procedures released last week for both banks and nonbanks. The new areas of emphasis largely fall under the CFPBs recently gained authority to prohibit unfair, deceptive, or abusive acts or practices by lenders. The CFPB received the UDAP authority under the Dodd-Frank Act. In the CFPBs originator exam procedures, the UDAP concerns are listed as ...
The Department of Housing and Urban Development this week announced new regulations strengthening the process by which it requires errant lenders to indemnify the agency for insurance claims paid on ineligible mortgages. The final rule is the latest in a series of steps HUD says it has undertaken to protect and strengthen the FHAs Mutual Mortgage Insurance Fund while providing qualified borrowers access to government-backed mortgage financing. The health of the MMI fund has come under scrutiny after a recent independent audit reported further decline in the FHAs capital reserves for unexpected losses. Testifying before Congress in December, HUD Secretary Shaun Donovan discussed ...
Congress should repeal legislation raising the FHAs maximum loan limit before the agencys losses skyrocket, triggering a massive taxpayer bailout, warned the American Enterprise Institute. In a new research paper, Peter Wallison and Edward Pinto, resident fellows at the AEI, urged Congress to correct its mistake of restoring the pre-Oct. 1 temporary maximum loan limits of $729,750 for FHA while leaving Fannie Mae and Freddie Mac at the lower permanent high-cost loan limit of $625,500 set by Congress in 2008. Congress should bite the bullet recognize the losses that are already embedded in the FHAs insurance fund and adopt reforms to the agencys accounting and underwriting that will stop the bleeding, the two public policy analysts said. Last fall, the FHA came under fire from Republicans and conservatives after an independent actuarial review of the agencys Mutual Mortgage Insurance Fund found ...
Fewer mortgage lenders were terminated in 2011 through the FHA Credit Watch Termination Initiative than in the preceding three years. According to the Department of Housing and Urban Developments 2011 Credit Watch termination list, only 20 approved lenders lost their authority to originate and underwrite FHA loans. The number was way down from 2010, when a record 122 mortgagees had their origination approval agreements with HUD and the FHA ended. Poor performance of FHA-insured loans originated by the mortgagee results in a termination. Specifically, an agreement with a lender may be terminated if ... (includes one chart)
The Department of Housing and Urban Development has proposed to eliminate an outmoded appeals process for determining the maximum FHA mortgage loan limits in certain areas. Published in the Jan. 13 Federal Register, the proposed rule specifically would do away with regulations that allow HUD to set the area-based loan limits on a yearly basis and permit appeals of these loan limits. The appeals were once an important source of data for HUD because it allows any party to submit documentation in support of alternative mortgage limits if that party believes the limit set by HUD did not reflect the median house prices in an area. The loan limit appeals process was set ...