A handful of publicly traded real estate investment trusts have been quietly making inquiries about buying residential loans that do not meet the qualified mortgage standard, including subprime credits and even unsecured consumer loans, according to players on both sides of the equation. One executive who manages a REIT that plays in the jumbo market admitted as much in an interview with Inside MBS & ABS, but pointed to one major deterrent: the Consumer Financial Protection Bureau. “We’ve tried to get clarifications from them on such things as the ability-to-pay rule, but they haven’t been very helpful,” he said. The source noted that his REIT has so far avoided buying any nonprime, non-QM loans, saying he fears the regulator will ...

The Structured Finance Industry Group and the Treasury Department continue to work on complementary initiatives to revive the non-agency mortgage-backed security market. SFIG’s upcoming plans include a push for transparency among issuers, while the Treasury has shifted its focus somewhat away from a benchmark non-agency MBS transaction. Eric Kaplan, a managing director at Shellpoint Partners and one of the leaders of SFIG’s RMBS 3.0 effort, said SFIG is ...

The first nine months of 2015 have seen a tremendous increase in FHA single-family originations as borrowers took advantage of a 50 basis-point premium reduction implemented earlier this year, according to Inside FHA/VA Lending’s analysis of agency data. Total FHA loan production during the first nine months of 2015 was up a whopping 81.3 percent increase. Data also showed a 13.1 percent increase in the third quarter from the prior quarter. It is hard to imagine that back in February this year, we reported a dismal ending for 2014, where overlays and high-loan costs caused an 8.1 percent decline in FHA endorsements in the fourth quarter and a 36.6 percent drop from 2013. In 2015, FHA fixed-rate originations increased 12.7 percent from the second to the third quarter, and rose 86.0 percent on a year-to-date basis. In 2014, conversion ... [ 2 charts ].

President Obama last week threatened to veto legislation progressing in Congress to provide qualified-mortgage status to loans held in portfolio by depository institutions. Industry analysts suggest that the bill still has a chance at being signed into law, if adjustments are made. The House approved H.R. 1210, the Portfolio Lending and Mortgage Access Act, on a 255-174 vote last week. Similar legislation is under consideration in the Senate. The bill in the House would ...

Despite FHA’s denial of further mortgage insurance premium reductions any time soon, stakeholders are holding out hope for another cut in the near future. Those supporting the idea of another pricing adjustment say it could open the door wider for more borrowers to use the FHA single-family program and generate the volume needed to offset any potential revenue loss that may result from the reduction. But Housing and Urban Development Secretary Julian Castro and his top officials have denied any plans of reducing MIPs. Castro has called such talk “premature,” despite a positive FY 2015 actuarial evaluation of the FHA’s Mutual Mortgage Insurance Fund, which some claim could be used to justify another premium reduction. Principal Deputy Assistant Secretary for Housing and Interim FHA Chief Ed Golding, in a press briefing, said the focus is elsewhere and not on ...

It may take Ginnie Mae a bit longer than expected to make all the accounting corrections necessary before the Department of Housing and Urban Development’s inspector general to render a clean opinion on the guarantor’s fiscal 2015 financial statement and its restated financials for FY 2014. In fact, Ginnie might have to make some significant long-term investments to address the IG’s accounting concerns, said Thomas Weakland, acting chief financial officer at Ginnie Mae. The agency may have to spend on new technology and infrastructure, and beef up its staff “spanning multiple years” to remediate all of the IG’s concerns, said Weakland. However, Weakland did not state a timeline for making all the necessary corrections and adjustments. Until the IG is fully satisfied with the restatement, it will continue to withhold an audit opinion. “We recognized some of the efforts made and the constraints that ...

The Consumer Financial Protection Bureau’s new integrated disclosure rule didn’t cause a sig-nificant spike in delayed home sales in October, according to the latest Campbell/Inside MortgageFinance HousingPulse Tracking Survey. The Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure rule took effect near the beginning of October. Many industry participants predicted that the new rule would disrupt mortgage closings ...

With the mortgage lending industry’s use of marketing services agreements under the Real Estate Settlement Procedures Act likely hanging in the balance, the CFPB detailed its anti-kickback legal arguments against PHH Corp. and its mortgage units in its “reply” brief with the U.S. Court of Appeals for the District of Columbia, filed earlier this month. In PHH Corp., et al., v. CFPB, the first main argument the bureau made is that PHH violated RESPA Section 8(a) because it entered into agreements with mortgage insurers so that whenever an insurer received a referral from PHH, the insurer paid PHH a kickback in the form of premiums for mortgage reinsurance. “PHH thus committed a separate violation every time it accepted a kickback ...

The Office of the Comptroller of the Currency informed lenders recently it will soon start examining banks for their compliance with the Truth in Lending Act and Real Estate Settlement Procedures Act Integrated Disclosure rule, and issued some updated guidance to help institutions get ready. In OCC Bulletin 2015-42, the agency said during initial examinations for compliance with the rule, OCC examiners will be evaluating a bank’s compliance management system and overall efforts to come into compliance, “recognizing the scope and scale of changes necessary for each bank to achieve effective compliance.”Further, the OCC said, “Examiners expect banks to make good faith efforts to comply with the rule’s requirements in a timely manner. Specifically, examiners are considering the bank’s ...

The CFPB continues to see a host of noncompliance issues with mortgage lenders – but some notable improvement on the servicing side of the industry too. According to the CFPB’s latest supervisory highlights report, the bureau cited a range of problems lenders are having originating mortgages. For instance, regulators saw evidence of failing to fully comply with the requirement that charges at settlement not exceed amounts on the good faith estimate by more than specified tolerances. Some lenders also are failing to fully comply with requirements for completion of HUD-1 settlement statements, to provide homeownership counseling disclosures, or to provide accurate loan servicing disclosure statements. Other lenders are not complying with consumer financial information privacy requirements, the report indicated. In other ...