Housing is showing some traction, but heavy regulation and enforcement continue to weigh on the mortgage market, according to analysts at this week’s secondary-market conference sponsored by the Mortgage Bankers Association in New York. Charles Gabriel, president of Capital Alpha Advisors, said there are some green shoots in the mortgage market, including signs of more home sales. But he characterized it as “a mature market that is suboptimized.” Lenders have paid massive penalties in lawsuits, he added, and there is no sign that they will expand the credit box. “U.S. Bank was asked...

Sen. Richard Shelby, R-AL, chairman of the Senate Banking, Housing and Urban Affairs Committee, released the text of his pending regulatory relief bill last week. Among a handful of CFPB-related provisions is one that would grant qualified mortgage status under the bureau’s ability-to-repay rule for residential loans held in portfolio. However, as per the draft Financial Regulatory Improvement Act of 2015, certain conditions would have to apply. To begin with, the lender/creditor would have to hold the loan in portfolio from its inception, or any acquirer of the loan must continue to hold it in portfolio. Additionally, the mortgage cannot have been acquired through securitization, nor can it have certain forbidden features, like negative amortization, interest-only provisions, or a loan ...

Republicans in the House of Representatives continued their efforts to chip away at the Dodd-Frank Act during a hearing this week by rolling out critics who said the act not only was a poor and ineffective response to the 2008 financial crisis, but also created a host of new problems and could be contributing to the next debacle. Rep. Sean Duffy, R-WI, chairman of the House Financial Services Oversight and Investigations Subcommittee, said a major assumption underlying Dodd-Frank – that the primary cause of the financial crisis was misbehavior by securities market participants – was false. “Main Street lenders are being...

Consumer Financial Protection Bureau Director Richard Cordray continues to tell the mortgage industry and its allies in Congress that the CFPB will not look the other way while the industry grapples with implementation of the integrated mortgage disclosure rule. The director’s latest official rebuff was delivered in a recent letter to Rep. Blaine Luetkemeyer, R-MO, who has been pressing the director for some kind of an enforcement grace period. Cordray historically has been...

President Barack Obama threatened Republicans in Congress that he would veto H.R. 1195 – not because of the substance of the original measure, but because of amendments that would reduce the cap on the total amount of funding that could be requested for the CFPB for fiscal years 2020 and 2025.As originally passed out of committee, H.R. 1195, the Bureau of Consumer Financial Protection Advisory Boards Act, would direct the CFPB to establish advisory councils for community banks, credit unions, and small businesses to advise and consult with the bureau. Since the bureau already convenes such panels on an ad hoc basis, the legislation seeks to formally codify and require it to do so. But the president and congressional Democrats ...

Republican leaders in the Senate and the House plan to press ahead with legislation to provide regulatory relief for mortgage lenders, especially for small community banks. It’s likely that provisions to automatically designate mortgages held in portfolio as qualified mortgages will be included in a legislative package the Senate Banking, Housing and Urban Affairs Committee will mark up sometime in the middle of May. And Republicans might use...

A final rule issued this week by federal regulators setting standards for oversight of appraisal management companies goes against the concerns raised by many industry participants. The rule implements standards required by the Dodd-Frank Act, among other issues. The Consumer Mortgage Coalition, the National Association of Appraisal Management Companies and other industry participants had raised concerns about the rule proposed in April 2014. The proposal established minimum standards for AMCs – which are intermediaries between appraisers and lenders – and allowed states to establish requirements that go beyond the minimum standards. The final rule adopts...

The CFPB doesn’t have enough power as currently authorized under the Dodd-Frank Act and should be given oversight over auto dealers, according to the “mother” of the bureau, Sen. Elizabeth Warren, D-MA. “The consumer agency’s early results have been good for consumers and good for the economy as a whole, but there’s more to be done,” Warren said in a speech last week. “Right now, the auto loan market looks increasingly like the pre-crisis housing market, with good actors and bad actors mixed together.” As the senator sees it, the market is now “thick with loose underwriting standards, predatory and discriminatory lending practices,” and increasing repossessions. She then cited one study that estimated that these kinds of auto dealer markups ...

The CFPB put out a final interpretive rule last week on how lenders should provide mortgage applicants with a list of local homeownership counseling organizations. Lenders may fulfill this Dodd-Frank Act requirement by using bureau-developed housing counseling lists, which are available via an online tool the CFPB created in 2013, or by generating their own lists using the same Department of Housing and Urban Development data the bureau uses to build its lists. The interpretive rule restates guidance the CFPB issued in 2013, and provides further guidance for lenders who are building their own lists of housing counselors. In response to questions the CFPB has received, the guidance also includes new instructions about how to provide applicants abroad with homeownership ...

Although the Federal Housing Finance Agency has upped its efforts to promote diversity and inclusion in the workforce in 2014, the agency said challenges remain as some racial and ethnic groups are still underrepresented, according to a March 31 report to Congress by FHFA’s Office of Minority and Women Inclusion. Because of the Dodd-Frank Act requirements, there has been considerable increases in racial, ethnic and gender diversity of FHFA’s executive leadership team since the agency first began reporting to Congress in 2011. Even though the number of FHFA executives has declined by 13.5 percent in the past three years, minorities comprised 23.5 percent, compared to 10.1 percent in 2011, and women comprised 33.3 percent, compared to 25.4 percent.