Mortgage industry participants are confident that newly confirmed FHA Commissioner Carol Galante will deliver on reforms she committed to in an effort to reach out to Republican critics. Eighteen Senate Republicans veered away from their hardline party colleagues to help Carol Galante secure confirmation of her nomination as the Department of Housing and Urban Development’s chief overseer of the FHA mortgage insurance program and overlord of housing policies. Galante broke through the GOP firewall Dec. 30 after the Senate voted 69 to 24 to approve her nomination. She needed at least 60 votes to ...

Staff at the Securities and Exchange Commission this week recommended that the agency do more research before making a decision on how to implement a controversial provision in the Dodd-Frank Act involving random assignments of credit ratings in structured finance. Sen. Al Franken, D-MN, was the major proponent of a requirement that the SEC study the feasibility of creating a government body that would pick which credit rating agency would evaluate new non-agency MBS, non-mortgage ABS, commercial MBS and other structured finance transactions. The provision, Sec. 15e(w) of the Dodd-Frank Act, essentially requires the SEC to implement the new system unless the agency determines that an alternative system would better serve the public interest and protect investors. Although some investors and rating services support the Sec. 15e(w) concept, most securitization market participants oppose...

The CFPB has a pretty full plate digesting hundreds of comments related to its mortgage servicing proposed rule, making it difficult to predict how the final product might end up as it presses to balance the industry’s legitimate concerns with the regulatory mandates of the Dodd-Frank Wall Street Reform and Consumer Protection Act. During a recent webinar sponsored by Inside Mortgage Finance, an affiliated publication, Mitchell Hochberg, counsel in the division of research, markets and regulations at the CFPB...

The U.S. Senate has unanimously passed legislation guaranteeing that privileged information provided to the CFPB will remain confidential, ending months of lender uncertainty about the disclosure of privileged and confidential information to the powerful new bureau. H.R. 4014, introduced in March by Rep. Bill Huizenga, R-MI, adds the CFPB to the list of federal agencies that are permitted to share the privileged information of a regulated entity with other federal agencies without waiving any state...

House Oversight and Government Reform Committee Chairman Darrell Issa, R-CA, and Financial Services Subcommittee Chairman Patrick McHenry, R-NC, released a harshly critical report of the CFPB, asserting the bureau’s structure and mandate will dry up credit for large swaths of the American people. “At a time of prolonged economic strain, American consumers can ill-afford such an unaccountable, unresponsive and all-powerful financial regulator,” the report began. The document also cited a Federal Deposit...

Those fee disclosure stickers seen at automated teller machines across the U.S. as per the Electronic Fund Transfer Act are slated to become a thing of the past, after a vote by the Senate cleared the way for the CFPB to eliminate the requirement. The Senate recently followed up on action by the House of Representatives and approved H.R. 4367, legislation that amends the EFTA to eliminate the law’s requirement that a fee disclosure be placed in a prominent and conspicuous location on or at an ATM. Critics say the ...

As the wait for the highly anticipated “qualified mortgage” final rule continues, its impact on FHA lending programs remains uncertain. Concerns have been raised over the possibility that the final QM rule the Consumer Financial Protection Bureau is finalizing may establish a “safe harbor” for prime loans with a maximum debt-to-income ratio of up to 43 percent. This could have implications for FHA loans, which allow higher back-end ratios under certain circumstances, according to some lenders and industry participants. At what point the DTI ratios will ...

The latest CFPB-related work plan of the Federal Reserve Office of Inspector General indicates the OIG is working on an evaluation of the bureau’s annual budget process, a political flash point on Capitol Hill for Republican critics and opponents of the agency. “As an independent agency within the Federal Reserve System, the CFPB is funded principally by the Federal Reserve System in amounts determined by the CFPB director as necessary to carry out the agency’s operations, subject to limits established in the...

CFPB Reorganizing Supervision Offices. Now that the bureau has launched its separate supervision programs for large banks and for nonbanks, it has decided to realign its headquarters supervisory staff. The CFPB will continue to have two supervision offices at its headquarters, but instead of one office for nonbank supervision and another for large bank supervision, one office will focus on examinations and another on policy. The examinations team will oversee the CFPB’s efforts to recruit, train and commission...

Despite the renewed focus on the FHA in the wake of the recent actuarial report, analysts do not expect any meaningful action in 2013 given the important role that FHA plays in supporting the housing market. But that does not mean that the Department of Housing and Urban Development will be sitting idly by next year. It has a lot of additional measures to implement to protect and preserve the FHA Mutual Mortgage Insurance Fund, HUD Secretary Shaun Donovan told Senate lawmakers recently during a hearing on the condition of the fund. The changes are both ...