It’s not just the defenders of the CFPB that are itching to enter the legal fray between the bureau and PHH Corp. The plaintiffs in State National Bank of Big Spring, Texas, et al. v. Lew have also filed a motion to intervene in the en banc proceeding. The plaintiffs – State National Bank of Big Spring, TX, the 60 Plus Association and the Competitive Enterprise Institute – had previously asked the federal district court for the District of Columbia to consolidate their 2012 lawsuit against the CFPB with that of PHH. However, they were recently denied. In their subsequent petition to the U.S. District Court of Appeals for the DC Circuit, the plaintiffs noted, “More than 18 months ago, this court ...

If federal policymakers do away with the CFPB’s mortgage rules without proper replacements, the credit quality of residential mortgage-backed securities could be compromised, analysts at Moody’s Investors Service said in a recent report. The analysts were providing a review of President Trump’s recent executive order related to the Dodd-Frank Act. “Any significant repeal of the Dodd-Frank Act’s mortgage-related provisions without effective alternatives would weaken residential RMBS credit quality because these provisions have strengthened the credit quality of mortgage originations, improved servicing practices and bolstered the credit integrity of RMBS structures,” the analysts said. The report is significant because it flies in the face of the traditional industry narrative that the bureau’s mortgage rules have been nothing but an onerous burden ...

In a competitive mortgage market with increasingly knowledgeable and demanding borrowers, it is essential that originators implement proper processes and controls to produce accurate property tax data collection, analysis and estimation, according to an online blog posting by Dominique Lalisse, an analyst with CoreLogic. One of the critical components of the new loan origination process that has emerged under the CFPB’s Truth in Lending Act/Real Estate Settlement Procedures Act integrated disclosure rule is property- tax amount estimation for residential properties, she pointed out. “The estimating process is conducted during the initial stages of origination in order to complete the required loan estimate (LE) provided to the borrower,” Lalisse said. “With increased scrutiny around the preparation of the LE, lenders must ...

The Department of Housing and Urban Development is apparently poised to begin an investigation of allegations of redlining on the part of CIT Group, Pasadena, CA, through its CIT Bank subsidiary, the successor to OneWest Bank, after agreeing to accept a complaint against the lender filed by the California Reinvestment Coalition. The CRC alleges the bank violated and continues to violate the Fair Housing Act by providing residential real estate-related transactions in a manner that discriminates on the basis of race, color and national origin. Specifically, the complaint alleges that since at least 2011, CIT Bank discriminated in marketing and originating housing-related products, as evidenced by the low number of mortgages it made to African-American, Asian-American and Latino borrowers in ...

The CFPB recently issued a request for information into ways to expand access to credit for consumers who are “credit invisible,” that is, those who don’t have enough credit history to generate a credit score. The bureau issued the RFI to drum up public feedback on “the benefits and risks of tapping alternative data sources such as bills for mobile phones and rent payments to make lending decisions about consumers whose lack of credit history might otherwise block opportunities.” According to the CFPB, there are 26 million Americans who are credit invisibles. “Another 19 million consumers have a credit history that has gone stale, or is insufficient to produce a credit score under most scoring models,” said the agency. The ...

Could this be an omen of the decision to come? Earlier this month, the U.S. Court of Appeals for the District of Columbia Circuit granted the CFPB’s request for an en banc rehearing in its controversial legal dispute, PHH Corp. v. CFPB. “Upon consideration of respondent’s [CFPB] petition for rehearing en banc, the briefs amici curiae in support of the petition, the response of the United States to the petition, the response of the petitioners [PHH Corp.] to the petition, the supplemental response of petitioners, and the vote in favor of the petition by a majority of judges eligible to participate, it is ordered the petition be granted,” 10 of the court’s 11 justices wrote in their ruling. One of ...

Despite a Feb. 21 ruling barring GSE shareholders from making illegal Treasury sweep claims, plaintiffs and speculators are keeping hope alive. In Perry Capital LLC vs. Treasury, the U.S. Court of Appeals for the District of Columbia put a stop to shareholders who have been arguing that the government is illegally confiscating GSE profits, citing language in the Housing and Economic Recovery Act of 2008. The Appeals Court notes: “We hold that the stockholders’ statutory claims are barred by the Recovery Act’s strict limitation on judicial review … We also reject most of the stockholders’ common-law claims. Insofar as we have subject matter jurisdiction over the stockholders’ common-law claims against...

Most real estate investment trusts that invest in MBS and other mortgage-related assets reported declines in their holdings of agency and non-agency securities during the fourth quarter, according to a new Inside MBS & ABS ranking and analysis. The top publicly traded REITs had a combined residential MBS portfolio valued at $228.28 billion as of the end of 2016. That was down 3.5 percent from the previous quarter and off 6.5 percent from the end of 2015. The figures are preliminary because several smaller REITs have not yet reported fourth-quarter results. Agency MBS continued...[Includes one data table]

In a long-awaited decision, the United States Court of Appeals for the District of Columbia Circuit ruled this week against Fannie Mae and Freddie Mac shareholders who have been contesting the Treasury Department’s net worth sweep of the government-sponsored enterprises’ earnings. On Feb. 21, Judge Royce Lamberth ruled shareholders in Perry Capital LLC vs. Treasury, et al, are barred by the 2008 Housing and Economic Recovery Act from making their claims. Perry sued...

The U.S. Treasury doesn’t get to invest in the booming stock market, but its stake in two guarantors of mortgage-backed securities is making a killing. Fannie Mae and Freddie Mac posted $9.9 billion in combined profits for the fourth quarter of 2016, and $20.2 billion for the full year. It was up 16.1 percent from 2015 and the fourth best year ever for the two government-sponsored enterprises. Their all-time high was...