Pacific Investment Management Company published an opinion piece this week calling for changes in the non-agency market before policymakers enact reforms that affect the government-sponsored enterprises. PIMCO was also critical of other GSE reform proposals. “Without a functioning private mortgage market, it will be nearly impossible for the GSEs to shrink their footprint without significant disruption to the housing market and to the underlying homeownership rate,” PIMCO said. PIMCO was...
A few months back, Citadel Servicing Corp., Irvine, CA, was eyeing the May/June period as the target date for its first nonprime mortgage-backed security. Now that July is almost over, it’s eyeing the fall – if that. According to company founder and CEO Dan Perl, prices being paid in the whole loan market for its high-yielding loans are just too good to turn down. Perl indicated that for his company, at least, the economics of a whole loan transaction are just too favorable right now. Although he could not be too specific on pricing, the industry veteran indicated...
Last week, the Consumer Financial Protection Bureau issued its long-awaited rule banning mandatory arbitration in consumer financial contracts. The industry concern is that, if left intact, the rule could lead to a rash of litigation impairing liquidity in the secondary markets and limiting consumer access to credit as companies seek to pull back on their risk exposure. The final rule prohibits “covered providers of certain consumer financial products and services from using an agreement with a consumer that provides for arbitration of any future dispute between the parties to bar the consumer from filing or participating in a class action concerning the covered consumer financial product or service.” It further requires...
The Consumer Financial Protection Bureau needs to do more to address problems with the TILA-RESPA Integrated Disclosure rule, according to participants in the non-agency market. The final rule issued this month by the CFPB was seen as helpful but insufficient. The final rule from the CFPB clarified some issues and formalized some guidance. The Structured Finance Industry Group said uncertainty regarding TRID violations persists. “SFIG applauds the efforts of the CFPB to ...
The House Appropriations Committee this week approved a FY 2018 spending bill for the Department of Housing and Urban Development with a $135 million allocation for information technology upgrades in lieu of a proposed lender fee. The set-aside also covers quality control and risk management improvements as well as other administrative costs. The recommended funding is $5 million more than the FY 2017 enacted level for administrative contract expenses and $25 million below the budget request. Approved by a vote of 31 to 20, the bill provides HUD with $38.3 billion in discretionary spending for FY 2018, down $487 million from the current level. The House bill authorizes $400 billion for loan guarantees under the FHA Mutual Mortgage Insurance Fund, including the Home Equity Conversion Mortgage program, and $500 billion for Ginnie Mae. Ginnie will also receive $25.4 million for agency staffing, which is ...
An internal watchdog audit alleges that the Department of Housing and Urban Development has been auctioning distressed notes to investors with no formal guidance or procedures in place. In a recent audit report, the HUD Office of the Inspector General said the department did not conduct rulemaking or develop standards for its single-family note sales program. The IG said it performed the audit due to the large amount of FHA claims paid on note sales as well as public concerns over the creation and administration of the program. In addition, the IG has never audited the program. In 2002, HUD referred to the initial note sales program as the Accelerated Claims Disposition Demonstration Program. The department later renamed it the Loan Sales Program, and subsequently to its current name: Distressed Asset Stabilization Program. DASP accepts assignment of eligible, defaulted single-family mortgage loans in ...
The Department of Housing and Urban Development’s lender disciplinary arm, the Mortgagee Review Board, has suspended a Pennsylvania FHA lender from originating or underwriting any new agency-insured loans. In addition, HUD’s enforcement center suspended owner John Seckel from doing business with the federal government. According to HUD, Seckle Capital of Newton, PA, and its owner submitted statements and certifications purporting to show the firm was properly audited by independent certified public accountants, when, in fact, it was not. The MRB said Seckel and his firm engaged in a “years-long pattern” of deceit and falsehoods. The action is the result of HUD’s ongoing effort to hold the mortgage industry accountable for the loans it originates, underwrites or services. According to HUD’s Neighborhood Watch website, Seckel Capital has a compare ratio of 164 percent. Of the 557 loans the ...
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