The Consumer Financial Protection Bureau’s decision to ignore more than 40 years of established interpretation of the Real Estate Settlement Procedures Act’s anti-kickback provision would deprive consumers of the benefits of risk retention and do them further harm, warned an industry trade group in an amicus brief. The brief in support of the petitioner in PHH Corporation, et al., v. Consumer Financial Protection Bureau said allowing CFPB Director Richard Cordray’s decision to stand would increase closing costs, make an already lengthy closing period longer, and make the mortgage origination process more confusing for borrowers and lenders. Currently on appeal in federal appeals court in the District of Columbia, the decision issued by Cordray on June 4, 2015, relates...

Private investors in Fannie Mae and Freddie Mac stock are raising concerns about the expansion of risk-transfer activity at the two government-sponsored enterprises, warning that it should not be viewed as the answer to housing reform. The credit-risk transfer programs are often cited as a path to housing finance reform because they bring new private capital to the mortgage business, laying off some of the risk held by the GSEs and, ultimately, by taxpayers. “Some have suggested...

The mortgage refinance business began losing steam in the third quarter, but purchase-mortgage lending helped sustain agency single-family MBS production during the period, according to a new market analysis and ranking by Inside MBS & ABS. Fannie Mae, Freddie Mac and Ginnie Mae combined to issue $351.70 billion of single-family MBS during the third quarter of 2015, a slight 0.3 percent decline from the previous period. Even with the slowdown, year-to-date agency MBS volume of $976.40 billion had already topped the $929.49 billion in gross issuance for all of last year. The bright spot was...[Includes two data tables]

The Financial Industry Regulatory Authority has adjusted a proposal that would set margin requirements for to-be-announced MBS. The independent regulator made some concessions to industry participants compared with a proposal issued in January 2014. FINRA’s proposed rule change was filed with the Securities and Exchange Commission this week. Comments will be accepted for 21 days after the proposal is published in the Federal Register, which is expected shortly. FINRA noted...

Recent disappointing job creation numbers and continued concern about slowing economic activity around the globe have convinced an increasing number of Wall Street analysts, participants and observers that the Federal Reserve’s Open Market Committee will not raise interest rates at its next meeting, scheduled for later this month. Further, more market professionals don’t predict an uptick in rates until sometime in 2016. And a few are even speculating a liftoff won’t come until the year after that. According to Peter Schiff, CEO and chief global strategist for investment firm Euro Pacific Capital, “the downright dismal September jobs report that was released last Friday may prove...

Mortgage lenders have entered a new, unfamiliar zone of regulation with the TILA-RESPA Integrated Disclosure (TRID) rule, which became effective on Oct. 3. The Stratmor Group, a mortgage consulting firm, said reaching out to borrowers prior to loan closing increases borrower satisfaction significantly, which regulators may view as a positive indicator of good-faith efforts to comply with the complex new rule. “One aspect of TRID compliance is making sure that the customer ...

Community banks continue to raise concerns about how regulations are hampering mortgage originations, according to the results of a survey by state regulators. While some community banks have ceased originations, lending data and forward-looking projections suggest that community banks have adapted to the post-crisis regulatory environment. The Federal Reserve and Conference of State Bank Supervisors released a report late last week detailing a survey of 868 banks with $10 billion or less in total assets. Single-family mortgages were named as a primary line of businesses by 69 percent of the surveyed banks in 2015, down from a 75 percent share last year. “Considerable variation in mortgage market conditions was reported...

The results of a new survey conducted for NeighborWorks America suggest that student loan debt is an obstacle for a growing share of potential homebuyers. The congressionally chartered organization with a focus on housing counseling also found confusion among potential homebuyers regarding the mortgage market. Some 57 percent of respondents said student loan debt was an obstacle to purchasing a home, up from a 49 percent share last year. The survey involved 1,000 adults. And 76 percent of respondents with student debt said the homebuying process is complicated, up from a 70 percent share in 2014. The greatest obstacle for potential homebuyers continues...

The CFPB and all of the prudential banking regulators will recognize the good-faith efforts of the mortgage industry to comply with the bureau’s Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure (TRID) rule as of its effective date of Oct. 3, 2015. “During initial examinations for compliance with the rule, the agencies’ examiners will evaluate an institution’s compliance management system and overall efforts to come into compliance, recognizing the scope and scale of changes necessary for each supervised institution to achieve effective compliance,” said CFPB Director Richard Cordray, in a letter to industry trade groups. “Examiners will expect supervised entities to make good-faith efforts to comply with the rule’s requirements in a timely manner,” the director continued. “Specifically,...

The full House of Representatives is expected to vote sometime this week on legislation that would provide a regulatory and legal safe harbor for mortgages originated under the CFPB’s Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure (TRID) rule until Feb. 1, 2016. Speaking of the legislation at issue, H.R. 3192, the Homebuyers Assistance Act, House Majority Leader Kevin McCarthy, R-CA, said, “This bipartisan bill provides certainty to businesses that are trying to comply with the rule as well as an opportunity to work out any implementation issues that come up.” One industry observer who anticipates a “big margin” vote indicated he expects the bill will split rank-and-file Democrats from their caucus leadership. Meanwhile, industry readiness continues to ...