Government regulators continue to wrestle with the controversial risk-retention rule mandated by the Dodd-Frank Act that is widely seen as one key to the prospects for reviving the non-agency MBS market. Officials from one of the agencies involved in the rulemaking told attendees at this week’s annual meeting of the American Securitization Forum that regulators are still studying the landslide of comment letters that came in response to a proposed rule published in April 2011. The extended comment period closed in August. “It is in the nature of the rulemaking process that an advanced notice of proposed...

The Federal Home Loan Bank of Chicago is in the midst of crafting an “unusual” plan to supplement the Bank’s current affordable housing and community investment programs with $50 million in additional funds to be used to promote housing and economic development throughout its district.According to a filing the Chicago Bank made with the Securities and Exchange Commission late last month, the three-year initiative will be in addition to the Bank’s current Affordable Housing Program (AHP) grant process and is part of an agreement with the FHLBank regulator, the Federal Housing Finance Agency.“We are in the process of developing the framework for the use of these funds which will be deployed by the end of 2014,” explained the Bank in its Dec. 27 SEC filing. “This program will be in addition to our other community investment programs in 2012, 2013 and 2014.”

The Federal Housing Finance Agency this week less than enthusiastically issued a call for public comment on the potential revival of Property Assessed Clean Energy program loans even as the Finance Agency is appealing the court order mandating issuance of its proposed rule.On Jan. 26, the Finance Agency published in the Federal Register an Advanced Notice of Proposed Rulemaking concerning PACE mortgage assets and a Notice of Intent to prepare an environmental impact statement under the National Environmental Policy Act “to address the potential environmental impacts of FHFA’s proposed action.” Property Assessed Clean Energy programs offer loans for energy-efficiency home improvements. While 27 states and the District of Columbia have legislation in place to permit PACE financing for green homes, in July 2010, Fannie Mae and Freddie Mac stopped purchasing PACE-related mortgages that had automatic first-lien priority over previously recorded mortgages.

California Democrats, including many in the state’s congressional delegation, would like the current head of the Federal Housing Finance Agency replaced by President Obama for someone who will take “immediate action to prevent more foreclosures.” Earlier this month, a group of 28 California House Democrats dispatched a letter to the president urging him to appoint a new permanent FHFA director via recess appointment. The Finance Agency under Acting Director Edward DeMarco has “consistently and erroneously interpreted its mandate” as Fannie Mae and Freddie Mac’s regulator “far too narrowly” and consequently has failed to help struggling California homeowners.

Government oversight of mortgage lending has dramatically increased in the last two years, and the current trajectory established by the Dodd-Frank Act suggests things are going to get a lot worse before they’re going to get any better. The Dodd-Frank Act will generate a heavy load of new regulations for the industry to implement, and the process is not yet halfway done, said Rod Alba, senior regulatory counsel at the American Bankers Association, during an Inside Mortgage Finance Publications webinar this week. “We are in the midst of at least 24 months’ worth of overheated regulatory pronouncements,”...

President Obama used his State of the Union address this week to announce a new federal-state law enforcement project aimed at mortgage origination and securitization practices and to propose a broad federal refinance program for performing underwater non-agency mortgages that would be funded with fees imposed on banks. Most observers say the refi proposal stands little chance in Congress and is mostly a campaign tool aimed at banks and the track record of Republican lawmakers. “I’m sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a...

The never-ending board game over mortgage foreclosure processing errors flailed through another week of meetings between state attorneys general, top lenders and federal officials that were so “informal” many didn’t confirm that they were in attendance. A leaked copy of a new draft settlement indicates that the latest offer on the table includes $17 billion in principal reductions and a $5 billion reserve account for state and federal programs. According to the Associated Press, some of that account would pay for $1,800 checks to homeowners affected by banks’ deceptive practices. Another $3...

Richard Cordray, the new director of the Consumer Financial Protection Bureau, this week parried with a key House Republican over disclosure of the agency’s regulatory agenda, a lengthy to-do list that was virtually dictated by Congress in the Dodd-Frank Act. “Since the onset of the financial crisis, members of Congress have heard from businesses of all sizes that markets ... need certainty. In this regard, the CFPB has failed the test,” said Rep. Patrick McHenry, R-NC, chairman of the House Oversight and Government Reform Subcommittee on TARP, Financial Services and Bailouts of Public and Private...

A cloud of uncertainty continues to hang over the private mortgage insurance industry as companies struggled to get new capital waivers and other relief from their state insurance regulators to stay in business. This week, Mortgage Guaranty Insurance Corp. announced a new two-year waiver from regulatory capital requirements from the Office of the Insurance Commissioner for the State of Wisconsin, which would allow it to write new business through Dec. 31, 2013. The waiver approved on Jan. 23 came after the previous waiver expired at the end of last year. As did the prior order, the new waiver allows MGIC to...

The newly empowered Consumer Financial Protection Bureau is wasting no time jumping into its oversight of mortgage origination practices and procedures at banks and nonbanks alike, issuing a set of M.O. examination procedures that will be used to put mortgage lenders and brokers under a compliance magnifying lens. But one industry attorney warns that in doing so, the CFPB has tilted the playing field against nonbank mortgage originators. CFPB Director Richard Cordray said the CFPB’s supervision of nonbank mortgage originators will “illuminate the entire marketplace by making nonbanks play by ...