While policymakers in Washington, DC, are paying renewed attention to housing-finance reform, some industry representatives took advantage of the opportunity provided by a related hearing on Capitol Hill to also urge changes be made to a number of the mortgage-related rules promulgated in recent years by the Consumer Financial Protection Bureau. Bond giant PIMCO issued a report that called for a handful of key revisions to the mortgage regulatory landscape before any reform of Fannie Mae and Freddie Mac is undertaken. “To bring capital back to the private mortgage market and ensure credit is extended...
The mortgage servicing rules the Consumer Financial Protection Bureau promulgated in the wake of the mortgage market’s collapse brought much-needed stability to the loan servicing arena. But they also have had a host of unplanned side effects that continue to haunt the market to this day. That’s one of the prime takeaways from comments provided by some top lender/servicers and industry trade groups, in response to the CFPB’s announcement that it would begin its five-year assessment of its servicing rules as per the requirements of the Dodd-Frank Act. Wells Fargo said...
The House Financial Services Committee may take up housing-finance reform after Congress returns from its August recess, according to a key GOP member of the panel. But Rep. Blaine Luetkemeyer, R-MO, who chairs the subcommittee on financial services and consumer credit, told a recent meeting of the Financial Services Roundtable that he doesn’t expect any real movement on housing reform this year. “I wouldn’t expect...
The U.S. House of Representatives was a relatively busy place last week, with a handful of measures related to flood insurance passing the House Financial Services Committee, and a few other, small-scale, individual mortgage reforms being introduced. Among the bills passed by the committee was H.R. 2875, the “National Flood Insurance Program Administrative Reform Act of 2017,” introduced by Rep. Nydia Velazquez, D-NY. It would make certain administrative reforms to the NFIP to increase fairness and accuracy and to protect the taxpayer from program fraud and abuse. The legislation passed on a 58-0 vote. Also favorably voted on was...
Sen. Mark Warner, D-VA, suggested the widespread view that Congress won’t get around to resolving the conservatorships of Fannie Mae and Freddie Mac may be too pessimistic. Speaking at a Mortgage Bankers Association conference in Washington, DC, this week, Warner said, “This may surprise some folks, but I think the stars may align where you could actually see housing-finance reform happen in front of some of the Dodd-Frank reform.” Warner, who co-authored a reform bill four years ago, said...
In a new report mandated by the Trump administration, per Executive Order 13772, the Treasury Department slammed the CFPB on multiple counts and called for an overhaul on how the bureau is managed. The Treasury’s perspective was summed up succinctly: “The CFPB was created to pursue an important mission, but its unaccountable structure and unduly broad regulatory powers have led to regulatory abuses and excesses. The CFPB’s approach to enforcement and rulemaking has hindered consumer choice and access to credit, limited innovation, and imposed undue compliance burdens, particularly on small institutions.” The report then detailed a number of more specific criticisms, as follows. “The bureau’s structure renders it unaccountable to the American people,” it began. Also, the CFPB’s substantive authority ...
The Treasury Department’s report on reforming financial regulation in the U.S. blames rules ushered in under the Dodd-Frank Act – and promulgated by the CFPB – for tight credit conditions in the mortgage market. “While Dodd-Frank and the ATR/QM [ability to repay/qualified mortgage] rule were not intended to eliminate markets for loans that did not meet the QM standards, the reality is that the vast majority of lenders remain unwilling to make loans that do not meet those standards, eliminating access to mortgages for many creditworthy borrowers,” Treasury wrote in the 142-page report. (At best, $3 billion to $4 billion in nonprime/non-QM mortgages might be originated this year out of total industrywide originations of $1.5 trillion.) The administration took aim at Appendix ...
House Fires Shot Across CFPB’s Bow, Passes Financial CHOICE Act. The GOP-controlled House of Representatives followed through on the majority’s often expressed intention to largely eviscerate the CFPB, passing H.R. 10, the Financial CHOICE Act, the Republican alternative to the Dodd-Frank Act. The measure passed on a vote of 233-186. All eyes now turn to the Senate Banking, Housing and Urban Affairs Committee, where Mike Crapo, R-ID, will play a pivotal role in Republican efforts to roll back the bureau. “Today’s passage of the Financial CHOICE Act is a significant and thoughtful effort to improve our financial regulatory system,” Crapo said after the vote. “Many of the provisions in this legislation are responses to the failures and consequences of Dodd-...
The Trump administration wants to pare back regulations that inhibit the non-agency MBS and ABS market and tilt current securitization economics that favor the government-sponsored enterprises over private issuers. “In order to revitalize a responsible [private-label securities] market, it is important to improve incentives for issuers through reasonable reductions in costs and regulatory burdens,” the Treasury Department said in a new report released this week. In particular, it aimed at adjusting relative economics for the government-sponsored enterprises and FHA/VA mortgage programs. On the regulatory side, Treasury recommends...
Firms that specialize in subservicing home mortgages for others continued to post steady gains in the first quarter, according to a new tally from Inside Mortgage Finance. The nation’s 20 largest subservicers held $1.689 trillion of contracts at March 31, a 5.1 percent sequential gain and a hefty 24.1 percent improvement from the same period a year earlier. Also, roughly $1.877 trillion of the nation’s mortgages are...[Includes one data table]