Determining a borrower’s ability to repay a bank-statement mortgage is more complicated than evaluating a borrower underwritten with full income documentation, according to a recent report by Moody’s Investors Service. The rating service noted that originations of bank-statement loans tend to be non-qualified mortgages for self-employed borrowers. “The quality of loans originated through bank-statement income documentation programs depends heavily on ...

Major servicers participating in the non-agency portion of the Home Affordable Modification Program have improperly ended mods for a number of borrowers, according to data from the Treasury Department. The Special Inspector General for the Troubled Asset Relief Program is urging the Treasury to take actions to prevent servicers from terminating mods that meet HAMP guidelines. “Treasury’s findings in its on-site visits to the largest seven mortgage servicers in HAMP over ...

The Consumer Financial Protection Bureau last week published its policy for issuing no-action letters for certain innovative financial products. Lenders had called for the policy but industry analysts caution that no-action letters from the CFPB won’t necessarily be helpful. Under the policy, lenders can apply for a no-action letter from the CFPB. The regulator said it will review applications for such letters and in certain circumstances indicate that ... [Includes three briefs]

Carol Galante, former head of the FHA, has been named to Ocwen Financial’s board of directors. Galante left the FHA in August 2014 to take on the position of faculty director with the Terner Center for Housing Innovation at the University of California, Berkeley. Current director Phyllis Caldwell was elevated...

Many small and medium-sized nonbanks have been earning steady profits the past three years, but all that ended in the fourth quarter of 2015, thanks to the integrated disclosure rule known as TRID. At least that’s what some warehouse managers told Inside Mortgage Finance. These credit executives, who spoke under the condition their names not be used, were somewhat surprised by the development, but were quick to caution that about a third of their clients posted losses. The managers also noted...

Guaranty-fee income increased in 2015 at Fannie Mae and Freddie Mac despite the fact that average g-fees on new business acquisitions were down slightly. The two government-sponsored enterprises reported a combined $17.33 billion in net income for all of last year, a 20.9 percent drop from 2014. However, g-fee income at the two GSEs was up 8.2 percent from 2014 to 2015, and continued to account for a growing share of their income as their investment portfolios shrank. G-fee income did not climb...

The odds are currently zero that Congress will find a legislative solution to the future of Fannie Mae and Freddie Mac this year, which is causing anxiety for the man charged with being both conservator and regulator to the government-sponsored enterprises: Mel Watt, director of the Federal Housing Finance Agency. Moreover, there is a growing concern among mortgage bankers that severe interest swings to the downside could cause a large net loss at Freddie in the first quarter of this year, a loss so large it will force the GSE to ask the U.S. Treasury for a draw on taxpayer funds. And it will happen...

Comments from real estate agents across the country are largely negative regarding the CFPB’s integrated disclosure rule known as TRID, according to the latest HousingPulse survey sponsored by Inside Mortgage Finance Publications. However, the data suggest a nuanced interpretation is necessary, as the damage from TRID is far from universal. For instance, the data collected in January represent the first time since TRID took effect that the share of on-time closings has diverged between FHA loans and Fannie Mae/Freddie Mac loans. That suggests TRID isn’t necessarily the sole culprit causing delays. If TRID was a major problem, loan types across the board would likely have a lower share of on-time closings. The survey also revealed that more than half of ...

The sale of jumbo mortgages – and even agency loans – by nonbanks continues to be problematic because of the CFPB’s integrated disclosure rule known as TRID. One mortgage official cited an example of a mortgage with TRID errors that was sold to one of the government-sponsored enterprises. “The lender self-reported the problems and was immediately asked to repurchase the loan,” this official said. Speaking of the GSEs, Fannie Mae and Freddie Mac issued $56.56 billion of single-family mortgage-backed securities in January, a modest 5.6 percent decline from the previous month, according to a new ranking and analysis by Inside The GSEs, an affiliated publication. December, however, may have been an anomaly. Many mortgage originators reported delays in loan closings in October ...

Since the Oct. 3, 2015, implementation of the CFPB’s integrated disclosure rule – TRID – attorney Daniella Casseres, an associate in the financial institutions regulatory practice at the Offit Kurman law firm in New York City, has received hundreds of questions concerning the new disclosure requirements.In a recent blog post, she provided answers to some of the most frequent and most pressing. Many have asked if they need to send all required three-day disclosures if the individual is just shopping. “The TRID rules require that you send a Loan Estimate and the home loan toolkit, when applicable, within three business days of receiving an application. An application for purposes of this rule, means the receipt of the following six pieces of ...