The Consumer Financial Protection Bureau issued an interim final rule last week that the new federal regulator said prevented significant disruption of the origination and modification of alternative mortgages – including ARMs. However, the interim final rule also narrowed the definition of “alternative mortgage transactions” that are eligible for preemption from state laws. The interim final rule temporarily updated the Alternative Mortgage Transaction Parity Act as required by the Dodd-Frank Act. “Without this interim rule implementing the AMTPA amendments, state lenders would lose ...

Lenders and even consumer advocates are pushing for expansions to proposed streamlined refinance standards for “qualified mortgages.” Federal regulators proposed an exception to the QM ability-to-repay requirements for refis of “non-standard mortgages” into standard mortgages. “MBA urges the CFPB to revisit these criteria so more borrowers qualify for streamlined products and such products are treated as QMs,” the Mortgage Bankers Association said in a comment letter sent to the Federal Reserve. The comment period on the proposed rule ...

The Federal Reserve last week fined Wells Fargo & Co. $85.0 million, alleging that a non-bank subsidiary of Wells steered prime borrowers to subprime mortgages. The consent order is the first formal enforcement action taken by a federal bank regulatory agency to address alleged steering of borrowers into high-cost subprime mortgages. The civil money penalty is also the largest the Fed has assessed in a consumer-protection enforcement action. In addition to the civil money penalty, the order requires that Wells compensate more than ...

The Federal Housing Finance Agency this week filed a lawsuit against UBS Americas alleging misstatements and omissions on non-agency mortgage-backed securities purchased by Fannie Mae and Freddie Mac. FHFA Acting Director Edward DeMarco warned that further action against other non-agency MBS issuers is likely. “From the issuance of 64 subpoenas last year to the filing of this lawsuit and further actions to come, we continue to seek redress for the losses suffered by ...

Ocwen Financial has posted impressive results with a shared appreciation modification program that recently received broad regulatory approval. The servicer noted that the mods, which include principal reduction, benefit borrowers and mortgage investors.Ocwen launched a SAM pilot program in August and announced this week that it hopes to expand the program nationwide. Ocwen CEO Ronald Faris said 79.0 percent of borrowers that have been offered the mods have accepted and the pilot program had a ...

The Department of Housing and Urban Development said it will soon issue guidance regarding audit requirements for small FHA direct lenders. A department spokesman said HUD is “very close” to issuing a mortgagee letter on revised compliance audit requirements needed for FHA lender approval or renewal. No date was given for the mortgagee letter’s release. On April 12, the FHA confirmed in an email to the American Bankers Association that it has approved ...

Most state-licensed mortgage companies in the Nationwide Mortgage Licensing System and Registry are mortgage brokers, of which a significant portion does FHA loan correspondent business, according to a recent report issued by the Conference of State Bank Supervisors. As of the end of the first quarter, 14,980 companies possessed 28,415 licenses – an average of two state licenses per company, according to the report, “A Nationwide View on State-Licensed Mortgage Entities, Quarter I, 2011.” The licensee/registrant reports ...

The Department of Housing and Urban Development is seeking comment on a proposed rule requiring appraisers to be certified, rather than licensed, by a state appraisal licensing board in order to be placed on the FHA appraiser roster. Mandated by the Housing and Economy Recovery Act of 2008, the proposed requirement would supersede HUD’s current practice of listing only state-licensed appraisers on the FHA roster. Although the practice complies with the statutory mandate, HUD believes the policy is outdated. There are approximately 55,000 state-certified appraisers on the FHA roster who would be ...

With the days winding down to the effective date for permanent lower loan limits set by the Housing and Economic Recovery Act, the mortgage industry is strongly urging Congress to extend the current temporary higher loan limits to enable the FHA, Fannie Mae and Freddie Mac to continue providing liquidity until the housing market recovers sufficiently. If the temporary limits are allowed to expire on Oct. 1, getting financing for home purchases or refinancing will become more difficult and expensive for many borrowers, which may result in ...

The impact of lower loan limits on the supply of Ginnie Mae mortgage-backed securities and other agency MBS would be very modest and that such loan limit changes should not affect Ginnie Mae prepayments, according to a recent analysis by Barclays Capital. With respect to agency MBS supply, the “permanent” lower loan limit established by the Housing and Economic Recovery Act of 2008 should cut the combined issuance of both conventional and Ginnie Mae pools by about 5 percent, the report said. The report, among other things ...