Wells Fargo Chairman and CEO John Stumpf will be on what is expected to be a very hot seat before the Senate Banking, Housing and Urban Affairs Committee tomorrow when he is expected to explain what went wrong at his institution that enabled employees to open more than two million deposit and credit card accounts that may not have been authorized by consumers. CFPB Director Richard Cordray is also scheduled to testify, as is Comptroller of the Currency Tom Curry and ...

First it was Corinthian Colleges, then ITT Educational Services. Now, Bridgepoint Education Inc. has been taken to task by the CFPB over alleged misconduct. Last week, the bureau brought a $31.5 million enforcement action against the for-profit post-secondary education company based in San Diego, accusing it of deceiving students into taking out private student loans that cost more than advertised....

Even Under Trump, Would the CFPB Be Invincible? If businessman Donald Trump wins the White House in November, the CFPB would be in the Republican’s crosshairs for sure. But the bureau’s recent consumer fraud case against Wells Fargo for opening up roughly two million deposit and credit card accounts without authorization has caused such outrage nationwide that it may very well give the controversial regulator a “shield” of sorts. At least that’s what we’ve been…

Bank and thrift holdings of non-agency ABS fell slightly during the second quarter, but the industry is not backing away from the consumer credit space. Depositories prefer to hold these assets in unsecuritized form on their balance sheets. A new Inside MBS & ABS analysis of call-report data shows that banks and thrifts held $130.98 billion of non-mortgage ABS at the end of June. That was down 0.7 percent from March and represented the 10th consecutive quarterly decline since the end of 2013, when the industry’s ABS holdings hit their all-time peak. According to the Securities Industry and Financial Markets Association, the supply of non-mortgage ABS debt outstanding actually rose...[Includes two data tables]

The average daily trading volume in agency MBS fell to $195.0 billion in August, the second weakest reading of the year, according to figures compiled by the Securities Industry and Financial Markets Association. The peak came the month before at $219.3 billion, and the low was back in March at $189.4 billion, not too far from the August volume. It’s...

Regulations and practices in the mortgage market will help protect investors in MBS backed by residential mortgages from marketplace lenders, according to Moody’s Investors Service. However, it’s not clear if the protections will be enough to offset the rating penalties often applied to originators and assets that lack historical performance records. Moody’s published its analysis last week, noting that while no residential MBS has been issued by a marketplace lender as yet, the firm expects issuance at some point. Marketplace lenders – the most prominent of which is Social Finance – connect...

Individual investors in Fannie Mae and Freddie Mac stock lost separate legal battles to inspect the corporate records of Freddie and prove that the Treasury sweep of the government-sponsored enterprises’ profits is damaging and unjust. In the case of Arnetia Joyce Robinson v. The Federal Housing Finance Agency, et al., the shareholder plaintiff argued that her investments were materially damaged when FHFA and the Treasury Department implemented the net worth sweep back in 2012. Robinson argued...

Investors in auto loan ABS may need to buckle up. Both prime and subprime auto loan ABS have weakened month-over-month and year-over-year, according to S&P Global Ratings. “Collateral performance in the U.S. prime auto loan ABS sector was weaker in July, with net losses and 60-plus-day delinquencies increasing month-over-month, while recovery rates decreased,” the S&P analysts said. “Collateral performance for the subprime sector deteriorated...

A GSE investor in Kentucky lost her case last week when the court dismissed claims that the government damaged Fannie Mae and Freddie Mac by implementing the net worth sweep of the GSEs’ profits. Arnetia Robinson alleged that her investments in Fannie and Freddie were “materially damaged” when the Federal Housing Finance Agency and the Treasury Department amended the existing preferred stock purchase agreement in 2012. According to court records, Robinson was seeking declaratory and injunctive relief that would prevent enforcement of portions of the PSPA. She contended that the sweep violates the Housing and Economic Recovery Act and said the Treasury acted “arbitrarily and capriciously.”

An increase in interest rates will help boost originations of non-agency nonprime mortgages, according to panelists at a webinar hosted by Inside Mortgage Finance this week. Higher interest rates will make it less attractive for prime borrowers to refinance, which could force lenders to look for volume elsewhere, including the nonprime market. Purchase mortgages account for a large share of the nonprime loans originated in recent years and higher interest rates could also increase nonprime mortgages aimed at debt consolidation. Matthew Nichols, CEO of Deephaven Mortgage, said...