The new political landscape in Washington, DC, has intersected with the judicial movement on the PHH Corp. v. CFPB case to give the mortgage industry some hope that the bureau can be scaled back. But the task is complicated by the fact that the new administration is headed by a political novice, and by the fact that the industry itself is not particularly unified about what kind of changes should be made. During a recent webinar sponsored by Inside Mortgage Finance, three top industry attorneys discussed some of the prospects for change on three separate fronts of the federal government: the executive branch, the legislative branch and the judicial branch. If there’s a single theme or take-away from the event,...
With the topic of regulatory reform experiencing a resurgence of attention since the Trump administration moved into the White House, the U.S. mortgage insurance industry is calling for greater uniformity when it comes to the nitty gritty details of the ability-to-repay rule and its qualified-mortgage standard. One area of particular concern for mortgage insurers is the differences between the CFPB’s QM rule for conventional mortgages and the Department of Housing and Urban Development’s QM rule for FHA-insured mortgages. These differences include different debt-to-income caps, different formulae to calculate points and fees, and different standards for higher-cost mortgages. According to U.S. Mortgage Insurers, these differences incentivize greater reliance on programs of the U.S. government, increasing risk to taxpayers. “While consistency and ...
In a recent letter to CFPB Director Richard Cordray, Rep. Emanuel Cleaver, D-MO, called upon the bureau to address potential abuses by financial technology companies that may be engaged in predatory small-business lending. In so doing, he asked that the CFPB “investigate whether fintech companies engaged in small business lending are complying with all anti-discrimination laws, including the Equal Credit Opportunity Act.” The congressman’s letter noted that fintech lending companies, also known as alternative small-business lenders, are a fast-growing industry offering a new wave of innovation, but they also pose many risks, he added. “Over the past decade, there’s been a very large increase of Silicon Valley start-ups and technology companies that are functioning like banks,” Cleaver said. “The CFPB ...
CFPB Poised to Commence Five-Year Review of Its Major Mortgage Rules. The CFPB is getting ready to start, as per the Dodd-Frank Act, its five-year evaluation of some of the significant mortgage rulemakings it has promulgated thus far, according to a recent account by Politico, as cited by Pavitra Bacon, an associate in the Washington, DC, office of the Ballard Spahr law firm, in an online blog posting.... Will We See CHOICE Act 2.0 This Week? With less than a week left before the end of March, one well-placed industry lobbyist is still holding to the prediction that Rep. Jeb Hensarling, R-TX, chairman of the House Financial Services Committee, will in fact introduce another incarnation of his Financial CHOICE act by the end of the month....
Vice President Mike Pence’s chief economist said the Trump administration is working on GSE reform principles. The comments came this week during a government relations summit hosted by the American Bankers Association. Mark Calabria, former director of financial regulation studies at the Cato Institute, caused a media frenzy when during a general session he said that a “set of principles” on GSE reform is likely to emerge in the coming months. Calabria is not a proponent of the GSEs, and believes that without Fannie Mae or Freddie Mac, commercial banks would step in to fill the liquidity void for the simple reason they have so much in the way of “excess reserves.”
For the 2017 examination cycle, the Federal Housing Finance Agency recently issued an advisory bulletin for new classifications of adverse findings for the GSEs and the Federal Home Loan Banks. Three designated classifications were established to help examiners define the issues more effectively with hopes of a faster remediation plan. When communicating adverse examination finds to the regulated entities and Office of Finance, the FHFA said the examiners will classify them as either “matters requiring attention, recommendations or violations.” MRAs are broken down into two separate categories: critical supervisory matters and deficiencies. The difference boils down to the nature and severity of the issues requiring corrective action, according to the bulletin.
The Federal Housing Finance Agency issued an interim rule last week that changed some of the components of its Freedom of Information Act regulation, including the fee categories. The interim rule gives notice about the circumstances in which the FHFA can extend its response time to the FOIA request and tells when it should notify the person requesting the information about their right to seek dispute resolution services. In the new FOIA rule, the agency is required to provide a minimum of 90 days for requestors to file an administrative appeal and must notify requesters about available dispute resolution services.
Fitch Ratings was the most active provider of credit ratings for non-mortgage ABS and non-agency MBS in 2016, a new Inside MBS & ABS analysis reveals. Fitch edged out Standard & Poor’s in a busy ABS market, garnering a 54.8 percent share of rated transactions last year. The company boosted its ABS ratings business by 4.6 percent compared to 2015, based on dollar volume, nudging its market share up 1.9 percentage points. Fitch’s deepest penetration was...[Includes two data tables]
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