The Consumer Financial Protection Bureau is accepting comments as part of its assessment of the ability-to-repay rule. The ATR rule took effect in early 2014, setting standards for how lenders should evaluate potential borrowers. The rule also established protections for loans that meet criteria to be deemed a qualified mortgage. One of the more controversial provisions the CFPB included when setting QM standards was...

Lenders planning to originate non-qualified mortgages have many sources to find potential borrowers, according to officials at Angel Oak Mortgage Solutions. AOMS focuses its business on non-QM originations via the correspondent and wholesale channels. Tom Hutchens, a senior vice president of sales and marketing at Angel Oak, has detailed the ways loan officers can find non-QM borrowers in a series of webinars. He suggests...

An industry trade group is requesting that the Consumer Financial Protection Bureau exclude reverse mortgages from the income-reporting requirement of the Home Mortgage Disclosure Act.The National Reverse Mortgage Lenders Association is seeking an exemption similar to the HMDA exemptions for rate spread; Home Ownership and Equity Protection Act status; origination charges; discount points; lender credits; total loan costs; points and fees; prepayment penalty term; and balloon payments. However, should the CFPB require income reporting on reverse mortgages, the NRMLA would want further guidance and clarification. Home Equity Conversion Mortgage loans make up over 99 percent of the reverse mortgage market today, and have not dropped below 85 percent since 1993, according to the group. NRMLA’s request is part of a broader comment on ...

Four financial regulatory agencies recently recommended that appraisers get temporary practice permits and waivers when moving to another state in order to help alleviate the shortage of appraisers, especially in rural areas. The Federal Reserve System, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the National Credit Union Administration are concerned that the limited number of state-certified and licensed appraisers is slowing down appraisal turnaround times. They suggest that when an appraiser moves to another state, that the new state regulator recognize the certification or license issued by another state on a temporary basis for federally related transactions. The banking regulators also recommend...

Mortgage lenders say they need another year, at least, to prepare for all the new requirements they will confront under the Consumer Financial Protection Bureau’s revised Home Mortgage Disclosure Act rule. One of the biggest problems is that the industry is waiting for multiple actions to be completed by the bureau before it can fully implement the new changes and test compliance systems, the Mortgage Bankers Association said in a comment letter filed with the CFPB last week. Back in April, the bureau proposed...

Federal banking regulators this week took action against two mortgage lenders for failing to enforce flood insurance requirements on properties in flood-prone areas. Separately, House lawmakers mulled over draft Republican legislation to reform and reauthorize the National Flood Insurance Program. The Office of the Comptroller of the Currency announced it slapped Colonial Savings Bank with an $87,500 penalty for violation of the Federal Disaster Protection Act of 1973. The FDPA requires...

The mortgage industry has come to the conclusion that meaningful housing-finance reform is so elusive that any legislation being introduced is a long shot, even in the Senate Banking, Housing and Urban Affairs Committee, which seems to be more involved in the topic than any other panel on Capitol Hill. Over the past month, rumors have circulated that some senators on the committee, including Bob Corker, R-TN, have been discussing with fellow members what an outline for housing-finance reform might look like, but with nothing committed to paper. A spokeswoman for the committee told...

The House of Representatives this week began voting on H.R. 10, the Financial CHOICE Act, the Republican effort to replace significant portions of the Dodd-Frank Act. The legislation, introduced earlier this year by House Financial Services Committee Chairman Jeb Hensarling, R-TX, passed out of committee in early May on a party-line basis. The final vote was expected to be completed late this week. The House Rules Committee voted...

The CFPB recently announced its plan to review and evaluate the effectiveness of its ability-to-repay/ qualified mortgage rule, as per the requirements of the Dodd-Frank Act, and is soliciting interested parties for their input. “We are asking the public to comment on our plan, to suggest sources of data, and generally to provide information that would help with the assessment,” bureau officials said in a blog posting revealing the plan. They added that the agency views the pending review and evaluation as an opportunity. “Conducting the assessment will advance our knowledge of the benefits and costs of the key requirements of the ATR/QM rule,” said the officials. “The assessment will also provide the public with information on the mortgage lending market, ...

Perhaps the single most critical aspect of the CFPB’s pending assessment of its ability-to-repay/qualified mortgage rule will be what happens to the so-called GSE patch. Under the patch, one of the discretionary elements the bureau added to the Dodd-Frank Act parameters of the rule, loans eligible for sale to the two government-sponsored enterprises, Fannie Mae and Freddie Mac, are granted safe-harbor QM status regardless of the loans’ debt-to-income ratio, as long as they meet other QM requirements. “Without that exemption, the bureau realized that being left with the standard QM (with the 43 percent DTI and Appendix Q) would have significantly limited mortgage lending,” said Richard Andreano, a partner in the mortgage banking unit at the Ballard Spahr law firm ...