Concerns about how borrowers will be impacted by a change in servicers go beyond mortgages in non-agency MBS. Analysts at Moody’s Investors Service warn that the decentralized servicing models used for consumer loan ABS issued by Springleaf Holdings and OneMain Financial face significant risks in the event that servicing needs to be transferred. Both Springleaf and OneMain originate consumer loans at local branches, where they conduct certain servicing operations and collections. The decentralized model can help boost originations and loan performance, though there are risks for investors in consumer ABS with decentralized servicing. “As long as the originator maintains the customer relationship and local presence, this ‘high-touch’ model can help...

Fitch Ratings has issued a report updating its standards for rating residential MBS under the ability-to-repay and qualified mortgage rules that went into effect early last year. Issued by the Consumer Financial Protection Bureau, the rules outline a set of underwriting criteria, which, when met for a particular loan, protects the lender from any undue litigation risk and provides a safe harbor for the loan. The rules affect...

Originations of loans that don’t meet standards for qualified mortgages have been off to a slow start but officials at Impac Mortgage Holdings suggest that non-QM lending is poised for growth. Joseph Tomkinson, Impac’s chairman and CEO, said the government-sponsored enterprises’ dominance of mortgage originations has limited non-QM originations. “We knew going into this that it would be a slow growth,” he said this week during a call with investors ...

Non-qualified-mortgages accounted for 1.8 percent of mortgages originated in the fourth quarter of 2014 by 22 lenders surveyed by the National Association of Realtors. NAR noted that most of the lenders in the survey don’t portfolio their originations, which could skew the non-QM share significantly lower compared with lenders that hold non-QMs in portfolio. Some 5.0 percent of originations by lenders surveyed by NAR in the third quarter of 2014 were non-QMs ... [Includes three briefs]

The integrated disclosure rule from the Consumer Financial Protection Bureau continues to shake up the mortgage industry months before it even takes effect. Particularly unsettled are settlement agents, who hope they continue to stay relevant in the new world of mortgage originations, but fear their role will be diminished if not rendered obsolete. “The lender is ceding less authority to the closing agent but they are still letting them close the transactions with greater supervision,” said one industry insider. “Could that change? There is a fear it might, but that is not how it is now.” Joseph Ventrone, vice president for regulatory and industry relations at the National Association of Realtors, put...

Creditworthy buyers are being constrained by dated scoring systems, according to a study released this week by VantageScore Solutions, which says there are benefits to Fannie Mae and Freddie Mac, as well as consumers, if a new model is adopted. The enterprises could increase their revenue while expanding access to mortgages to a more diverse group of consumers. The credit reporting company has been working to get Fannie and Freddie to embrace a new credit reporting system for years now. Its new report comes on the heels of the Federal Housing Finance Agency comments in its 2015 scorecard directing the GSEs to look into potential alternative forms of credit scoring.

The mortgage industry isn’t achieving any more success than lawmakers on Capitol Hill in convincing the Consumer Financial Protection Bureau to take it easy on lenders when it’s time to start enforcing its integrated disclosure rule. Speaking at the American Bankers Association’s government relations event in Washington, DC, earlier this week, Virginia O’Neill, head of regulatory compliance for the trade group, recounted for attendees the experience of one community bank ...

More than a dozen industry organizations asked the CFPB last week to implement a “restrained enforcement and liability” or “grace period” through the end of 2015 for those seeking to comply in good faith with its integrated disclosure rule after its August 1, 2015, effective date. “There are ... situations – such as what will occur if a closing cannot go forward on schedule because of occurrences outside the control of the parties – that are not addressed by the regulation which still require additional guidance,” the collection of 16 trade groups said in a joint letter to CFPB Director Richard Cordray. “We would like to use this grace period to identify pain points with stakeholders and then meet with bureau staff ...

The changes the CFPB wants to make to its 2013 mortgage servicing rules under the Real Estate Settlement Procedures Act and the Truth in Lending Act got a mixed reception from the mortgage industry. The proposed rule was issued in mid-December, and the public comment period closed last week. The proposed amendments cover nine primary topics: successors in interest, definition of delinquency, requests for information, force-placed insurance, early intervention, loss mitigation, prompt payment crediting, periodic statements, and small servicer issues. The Independent Community Bankers of America was pleased with the bureau’s proposed amendment to the small servicer definition that will permit a small servicer to service, for a fee, mortgage loans that are seller-financed transactions subject to certain limitations. ...

Credit unions support a CFPB proposal that would let them off the hook for one year when it comes to submitting their credit card agreements to the bureau while the agency works to develop a more streamlined and automated electronic submission system. Other requirements, including card issuers’ obligations to post currently-offered agreements on their own Web sites, would remain unaffected by the proposed rule, which was issued in February. Currently, card issuers are required to send agreements to the bureau manually through e-mail. The CFPB intends to come up with a new system through which card issuers would be able to upload agreements directly to the bureau’s database and eliminate the process of e-mail submissions. Among the supporters was the ...