Federal banking regulators should make a number of adjustments to proposed net stable funding ratio requirements, according to the Structured Finance Industry Group and other industry participants. The Federal Deposit Insurance Corp., the Federal Reserve and the Office of the Comptroller of the Currency issued the NSFR proposed rule in April, following standards set by the Basel Committee on Banking Supervision. Comments on the proposed rule were due late last week. The NSFR addresses...

JPMorgan Chase is a step closer to settling a dispute with Deutsche Bank and the Federal Deposit Insurance Corp. over certain mortgage securitization agreements in connection with the government’s takeover of failed mortgage lender Washington Mutual. According to Chase’s most recent 10-Q filing with the Securities and Exchange Commission, the firm, Deutsche Bank and the FDIC have signed a term sheet to resolve pending litigation brought by the German bank against Chase and the FDIC in relation to WaMu as well as Chase’s outstanding indemnification claims pursuant to the terms of the purchase-and-assumption agreement with the FDIC. The term sheet is subject...

A federal judge rejected efforts by the government to keep a new batch of official memos and other documents from being disclosed in the ongoing legal war over the terms of the conservatorships of Fannie Mae and Freddie Mac. U.S. Court of Federal Claims Judge Margaret Sweeney released a new set of documents that included a brief excerpt of former White House housing policy expert Jim Parrott’s deposition from January, a presentation from the Federal Housing Finance Agency in 2008 and several memos dating back to 2008 and 2012. Sweeney rejected...

The proposed rule from the Consumer Financial Protection Bureau addressing the TILA-RESPA Integrated Disclosure rule will likely help the non-agency market, according to industry participants. However, there’s also some frustration that the CFPB didn’t do as much as it could have to address cures and assignee liability. Industry attorneys note that if enough comments are submitted on the issues, the CFPB might make further changes to TRID. The changes proposed by the CFPB ...

In the event of a severe economic crisis, Fannie Mae and Freddie Mac could need a bailout of up to $125.8 billion, according to a Federal Housing Finance Agency stress test released this week. The test of severely adverse scenarios, required by the Dodd-Frank Act for companies with total consolidated assets of more than $10 billion, took place in March and is based on Fannie and Freddie portfolios as of Dec. 31, 2015. The bailout would be needed on an incremental basis and would also depend on the treatment of the government-sponsored enterprises’ deferred tax assets. Under this hypothetical economic scenario, situations include...

The CFPB is not offering additional cure provisions in its proposed rule to update and clarify certain aspects of its Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure rule, otherwise known as TRID. TRID “2.0” was released late last month, fulfilling the bureau’s promise to issue the proposal by the end of July. As widely anticipated, the proposed amendments also essentially codify the bureau’s informal guidance on various issues and include clarifications and technical amendments. (See additional stories on pages 3-6.) “The intent of this proposal is to integrate some of the bureau’s existing informal guidance, whether provided through webinar, compliance guide or otherwise, into the regulation text and commentary of Regulation Z where appropriate,” the agency said....

Perhaps the most significant change in the proposed rule the CFPB issued late last month to clarify its TRID rule is guidance on sharing disclosures with various parties involved in the mortgage origination process in light of privacy concerns. “The bureau has been asked repeatedly by creditors, settlement agents, and real estate agents about the sharing of the closing disclosure with third parties involved in the mortgage transaction,” the proposal stated. “These inquiries have largely concerned which third parties may receive a copy of the CD but have also concerned whether a combined CD form must be provided to the consumer and seller or whether separate CD forms may be provided to the consumer and the seller.” The CFPB provided ...

The biggest win for mortgage lenders in the CFPB’s proposal to clarify certain aspects of its integrated disclosure rule is the apparent closing of what’s known as the TRID’s “black hole.” The black-hole problem stems from the fact that, currently, the integrated disclosure rule requires that the creditor deliver or place in the mail the loan estimate no later than the third “general” business day after receipt of the consumer’s application, and the borrower must receive the final revised LE no later than four business days prior to consummation. Once the closing disclosure has been issued, the LE can no longer be provided. If there is a valid change of circumstance that delays closing and results in a fee change,...

One proposed rule change to the TRID could help the secondary mortgage market; that is, the creation of tolerances for the total of payments. As the proposal noted, the Truth in Lending Act establishes certain tolerances for accuracy in calculating the finance charge and disclosures affected by the finance charge. However, “In light of changes to certain underlying regulatory definitions, the bureau believes it would be helpful to establish tolerances for the total of payments to parallel the existing provisions regarding the finance charge,” the CFPB said. Under the proposed rule, the same tolerances that now apply for the finance charge would also apply to the total of payments. The bureau said it is concerned that, absent the explicit application ...

Another noteworthy part of the CFPB’s TRID 2.0 proposal would extend the applicability of a partial exemption that mainly affects housing finance agencies (HFAs) and nonprofits. The existing rule provides a partial exemption for certain non-interest bearing subordinate-lien transactions that provide downpayment and other homeowner assistance (housing assistance loans). The CFPB said it has learned that the exemption may not be operating as intended. “The bureau has received information that many HFAs are having difficulty finding lenders to partner with in making these loans,” the proposed rule stated. Following the introduction of the TILA/RESPA integrated disclosures, some vendors and loan originator systems no longer support the Real Estate Settlement Procedures Act disclosures. “Although the RESPA disclosures are still required for ...