Steven Mnuchin, President-elect Donald Trump’s choice to be the next Treasury secretary, startled financial markets this week by indicating he would act quickly to bring Fannie Mae and Freddie Mac out of government conservatorship. “We’ve got to get Fannie and Freddie out of government ownership,” Mnuchin said during an interview with Fox News. “It makes no sense that these [two] are owned by the government and have been controlled by the government for as long as they have. In many cases, this displaces private lending in the mortgage markets, and we need these entities to be safe.” Mnuchin, a former Goldman Sachs executive who bought the failed IndyMac Bank and resurrected it as OneWest, continued...

Warehouse providers ended the third quarter with $58.0 billion of commitments on their books, a modest improvement over the prior period and a sign that nonbanks still hunger for residential credit. Compared to the same quarter a year ago, warehouse commitments increased an impressive 23.4 percent, according to survey figures compiled by Inside Mortgage Finance. That’s the good news. Now comes the bad: with interest rates rising since the election, warehouse managers are voicing their concern about what may lie ahead, namely lower originations. “Right now it feels...[Includes one data table]

With CFPB Director Richard Cordray’s tenure possibly on the line while a pro-business President-elect Donald Trump works on staffing up his incoming administration, the bureau earlier this month filed its highly anticipated appeal to the full U.S. Court of Appeals for the District of Columbia Circuit in its long-running dispute with PHH Corp. Back in mid-October, in PHH Corp. v. CFPB, a three-judge panel of the court nixed the agency’s $109 million penalty against the lender under the Real Estate Settlement Procedures Act, and determined that the CFPB’s leadership structure was unconstitutional because it is run by a sole director who can only be removed for cause. While an appeal by the bureau was widely expected, the issue took on ...

As part of its TRID 2.0 clarifying rulemaking, the CFPB sought comment on whether lenders should have the option of disclosing lender or seller credits as either credits specific to particular charges or general credits applicable to settlement costs. The Mortgage Bankers Association suggested the CFPB give lenders options and not settle on one approach. “Some lenders would prefer a single approach; others indicate that optionality is likely necessary,” the trade group said in a recent comment letter. It noted that seller credits are governed by sales contracts between the buyer and seller, and that local custom frequently comes into play as to who pays a specific fee, such as owner’s title insurance. “Similarly, the particular application of lender credits ...

The CFPB has made progress in its regulatory treatment of the cash-to-close table as reflected in its proposed rule to clarify aspects of its integrated disclosure rule, but more needs to be done, some leading industry groups said. “The cash-to-close sections of the Loan Estimate and Closing Disclosure represent some of the most challenging aspects of the TRID rule,” said the Real Estate Services Providers Council in a comment letter to the bureau. “The industry had noted that a failure of the prior disclosures was that they did not provide for disclosing to the consumer the lender’s estimate of the cash that he or she would need to close the loan,” it added. Further, the industry did not indicate that ...

Another area in which the CFPB sought industry input in its TRID clarifying rulemaking process is whether the proposed 120-day implementation period, starting from final publication in the Federal Register, will be adequate. Some industry commenters essentially said no. Others basically said, it depends. Wells Fargo was one of the commenters that fell into the former camp. “[S]ome of the clarifications in this proposal have already been implemented by the majority of the industry based on previous informal guidance from the bureau,” said the lender. “However, this proposal also contains a number of changes that are new or that are being proposed with more detailed direction than previously offered.” Some examples the lender cited were the proposed expansion to the ...

Some top industry players support the CFPB’s proposed amendment to its existing TRID rule that clarifies a lender’s ability to use a revised closing disclosure (CD) to reset tolerance baselines for fees and charges, as long as there are valid changes of circumstances. However, they think a few simple tweaks could maximize the usefulness of the change without creating an incentive for lenders to act in such a way as to defeat the bureau’s intention. The proposal clarifies that the authority to “rebaseline” exists for all CDs – not just the initial CD – and that for any CD issued after the first one, there is no timing requirement, and no timing limitation on the issuance of the initial CD. That means ...

Securitization Group Meets with CFPB Officials. Earlier this month, staff and members of the Structured Finance Industry Group met with CFPB Director Richard Cordray and other senior officials to talk about the state of the non-agency mortgage securities market and some of the factors hampering its return.... Mortgage Lenders Meet With Bureau, Other Regulators, to Discuss Diversity, Inclusion. A small group of mortgage lenders recently met with staff of the CFPB, the Federal Reserve, the Federal Deposit Insurance Corp., the Federal Housing Finance Agency and the Office of the Comptroller of the Currency to discuss best practices on how to develop and maintain diversity and inclusion programs within the mortgage industry, according to an account by the Mortgage Bankers Association....

The Consumer Financial Protection Bureau late last week filed its much-anticipated petition with the U.S. Court of Appeals for the DC Circuit to reconsider some of the key holdings made by a three-judge panel of the court against the agency in PHH Corp. v. CFPB back in mid-October. One such holding was the panel’s determination that the CFPB’s leadership structure is unconstitutional because it is run by a sole director who can only be removed by the president for cause. While an appeal by the bureau was widely expected, the issue took on a new urgency after Republican real estate developer Donald Trump won the presidential election. In its petition, the CFPB asserted...

Commercial bank and savings institution holdings of non-agency ABS fell again during the third quarter of 2016, marking the 11th consecutive quarterly decline in the industry’s investment in the sector, a new Inside MBS & ABS analysis of call-report data reveals. Banks and thrifts held $128.55 billion of ABS on their balance sheets at the end of September, down 1.9 percent from the previous quarter. The industry’s aggregate ABS portfolio was off 8.8 percent from the same point in 2015. The ABS market itself shrank...[Includes two data tables]