A new study from the Government Accountability Office has confirmed that the CFPB can monitor banks for their mortgage servicing compliance with the terms of settlements that were reached before the bureau received its full authorities with the appointment of a confirmed director. The degree to which the CFPB has actively done so, however, appears to be limited. The GAO study at issue concerned the consent orders the Office of the Comptroller of the Currency and the Federal Reserve reached with 16 mortgage servicers back in 2011 and 2012. Those agreements required the servicers to hire consultants to review foreclosure files for errors and to remediate harm to borrowers. The CFPB was established on July 21, 2011, and the first...

The House Appropriations Committee this week approved the FY 2015 Transportation, Housing and Urban Development funding bill, which, among other, things contains a provision prohibiting federal housing agencies from facilitating the use of eminent domain in resolving foreclosure problems. Specifically, the FHA, Ginnie Mae and the Department of Housing and Urban Development would not be allowed to use funds appropriated by Congress to “insure, securitize or establish a federal guarantee” of any mortgage or mortgage-backed security that refinances or replaces a mortgage that has been subject to eminent domain condemnation or seizure by a state, municipality or any other political subdivision of a state. In addition, the bill would prohibit the use of appropriated funds or any receipts or amounts collected under any FHA program to implement the FHA’s new Homeowners Armed with Knowledge (HAWK) program. HUD has proposed to ...

During a legislative markup session this week, the House Financial Services Committee approved H.R. 2673, the Portfolio Lending and Mortgage Access Act, introduced by Rep. Andy Barr, R-KY, which would deem all mortgages held in portfolio to be qualified mortgages under the Consumer Financial Protection Bureau’s ability-to-repay rule. Republican supporters characterized the bill as the ultimate “skin in the game” measure and noted it was specifically drafted to avoid the pitfalls of the “originate to distribute” model so heavily criticized for contributing to the financial crisis. But Democrat opponents said...

New GSE stress test results released by the Federal Housing Finance Agency this week reveal what many in the industry have been talking about for the past year: Because Fannie Mae and Freddie Mac are not allowed to build capital, they would be forced to tap Uncle Sam once again for cash assistance should a financial calamity strike the nation. If a severe recession hits, Fannie and Freddie would need Treasury draws ranging from $84.4 billion to $190 billion, depending on the treatment of deferred tax assets, according to new calculations made by the GSEs and the FHFA. Adjustments to DTAs have allowed the two to book huge earnings the past year, but those accounting adjustments are now running out.

HUD Secretary Shaun Donovan said this week that housing finance reform can no longer be put off, but no more so than for the FHA which continues to play an “outsized role” in the mortgage market as private capital remains on the sidelines. Speaking in New York at an event co-hosted by the Bipartisan Policy Center, Donovan said the Obama administration is squarely behind the legislative proposal by Senate Banking, Housing, and Urban Affairs Committee Chairman Tim Johnson, D-SD, and Ranking Member Mike Crapo, R-ID. “Despite its imperfections, does this bill represent progress? Absolutely,” said Donovan, seeking to win over housing advocacy groups disenchanted with the bill. “When looking for ways to improve [the bill], let’s not lose sight of its potential. Let’s not forget its importance to the housing market and its future.” The Johnson-Crapo legislative proposal calls for a wind-down of Fannie Mae and Freddie Mac and creation of a ...

Industry joint-venture professionals are trying to stay upbeat as they feel their way around a changing economic and regulatory landscape. A number of them are pulling back somewhat as they strategize to find their niche in a recovering market and a business redefined by the Dodd-Frank Act. “As everybody here knows, there have been a long-standing number of mortgage joint ventures that have exited the business over the last couple of years,” Gerard Griesser, president of The Trident Group, said in introducing a panel of industry executives at the Real Estate Settlement Providers Council’s 2014 annual conference this week in Washington, DC. Robert Moline, president and chief operating officer at HomeServices of America, a Berkshire Hathaway affiliate based in Minneapolis, said...

It will be difficult to tell whether the Dodd-Frank Act is driving waves of small lenders out of the mortgage market or whether a severe drought in new production is an equally weighty factor, but community lenders may be gaining some ground among policymakers. At a hearing in the House Financial Services Committee this week, Chairman Jeb Hensarling, R-TX, read at some length from a letter he received from a small mortgage banker in central Texas who said his firm is being forced out of the market because of the cost and complexity of regulatory compliance. The major culprit is the wave of mortgage regulations imposed by the Consumer Financial Protection Bureau under the Dodd-Frank Act. Hensarling did not reveal the company’s name. Rep. Shelley Moore Capito, R-WV, who chairs the Financial Institutions and Consumer Credit Subcommittee, reiterated...

The Consumer Financial Protection Bureau, the Federal Housing Finance Agency and four other federal financial regulators issued a proposed rule this week that would implement minimum requirements for state registration and supervision of appraisal management companies. Mandated by the Dodd-Frank Act, the requirements would apply to states that voluntarily choose to establish an appraiser certifying and licensing agency with the authority to register and supervise AMCs. While there would be no penalty imposed on states that do not establish a regulatory structure for AMCs, these businesses would be barred from providing appraisals in such states. The provisions in the proposed rule are...

The Dodd-Frank Wall Street Reform and Consumer Protection Act is proving to be a burden to small banks throughout the country and threatens to cut off a variety of product offerings for many of the borrowers they serve, according to a new study by George Mason University's Mercatus Center. "Our initial analysis suggests that Dodd-Frank is having significant effects on small banks and their customers. A large majority of small banks view Dodd-Frank as more burdensome than the Bank Secrecy Act, a regulatory regime that banks widely regard as very burdensome," said the study, which was prepared by a trio of academics, including senior research fellow Hester Peirce, former senior counsel to Sen. Richard Shelby, R-AL, on the Senate Banking, Housing and Urban Affairs Committee.

Kara Stein, a commissioner at the Securities and Exchange Commission, said the SEC needs to take action regarding the rating services. It was one of many recent MBS-related calls for action directed at the SEC, from the agency's leadership, Congress and industry analysts. "We need to finally and firmly address the conflicts of interest in asset-backed securitizations and the provision of credit ratings," Stein said in a speech late last week. She noted...