The CFPB’s proposed rule, “Defining Larger Participants in the Automobile Financing Market,” didn’t win many friends in the auto finance sector during the public comment period which closed earlier this month. The proposed rule would generally allow the bureau to supervise larger nonbank auto finance companies – those that make, acquire or refinance 10,000 or more loans or leases in a year – for the first time at the federal level. The bureau also indicated that it considered, and is continuing to consider, the establishment of a higher threshold – 50,000 annual originations, and one that is lower – 5,000 annual originations.The National Independent Automobile Dealers Association told the CFPB it should decline to establish any threshold that is lower than the 10,000 ...

Many mortgage lenders are going to feel they are “damned if they do, damned if they don’t,” when they learn about the fair lending pitfalls inadvertently lurking in the weeds of compliance with the CFPB’s Truth in Lending Act and Real Estate Settlement Procedures Act integrated disclosure rule and the forthcoming Home Mortgage Disclosure Act rule. “Looking ahead to next year and beyond, the TILA-RESPA integrated disclosure rule could bring additional new risk,” said Colgate Selden, counsel with the Alston & Bird law firm, during a recent webinar on fair lending risk sponsored by Inside Mortgage Finance, an affiliated newsletter. “Some of these are old risks that may have gone away, but are back in some ways,” Selden told attendees. ...

The outstanding supply of agency single-family MBS continued to grow at a subdued pace during the third quarter of 2014, and the biggest investor classes did most of the heavy lifting funding the market, according to a new Inside MBS & ABS analysis. On the supply side, there were $5.632 trillion of single-family MBS guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae outstanding at the end of September. That was up just 0.4 percent from the previous quarter but had enough growth rings to show a 1.2 percent gain from a year ago. As has been the case for the past few years, the Ginnie MBS market grew...[Includes two data chart]

The Federal Reserve’s Open Market Committee held its last meeting of the year this week, keeping the federal funds target rate steady and continuing to reinvest principal payments from its holdings of agency debt and MBS into agency MBS and rolling over maturing Treasury securities at auction. Most of the pre-meeting buzz among investors was whether the FOMC would tweak or replace its boilerplate language about waiting “a considerable time” before moving to end its zero interest rate policy and begin “normalizing” rates. It did...

Defying the expectations of most industry analysts, investors have bid up the price of agency MBS over the past two weeks, pushing values into nosebleed territory. According to figures compiled by MBS Quoteline, the price of the Fannie Mae 3.50 percent bond recently reached 104.4. “This week and last week we saw new highs,” said Joe Farr, director of sales and marketing for the company. And that has made...

Wall Street analysts are generally projecting a year of stability for most asset classes in the consumer ABS space for 2015, despite a few more losses and an anticipated increase in interest rates. The one exception might be subprime auto. Analysts at Standard & Poor’s Ratings Services cited a favorable overall environment characterized by a strengthening economy, healthy consumer credit fundamentals, and robust structural protections in ABS transactions. “We expect...

Industry attorneys warn that documenting borrowers’ income for compliance with ability-to-repay standards established by the Consumer Financial Protection Bureau can prompt fair lending liability issues. During a webinar hosted by Inside Mortgage Finance Publications last week, R. Colgate Selden, counsel at the law firm of Alston & Bird, said there are a number of fair lending issues surrounding income documentation and determining debt-to-income ratio calculations ...

Home-equity lending continued to grow during the third quarter of 2014 – in fact, it was the fastest-growing segment of the mortgage market – but depository institutions reported further declines in the unpaid balances of these assets on their balance sheets. Lenders funded an estimated $20 billion of new home-equity lines of credit during the third quarter, up 17.6 percent from the previous three-month period. That compared to a 9.8 percent increase in total mortgage originations during the period, and it was the best quarterly HEL production figure in five years, according to Inside Mortgage Finance estimates. Still, the supply of home-equity loans outstanding fell...[Includes three data charts]

Complying with all of the Consumer Financial Protection Bureau’s mortgage rules that took effect this year could actually boost a lender’s fair lending liability under certain circumstances, according to one top attorney. “There are several possibilities where a person could be in complete compliance or even engage in behaviors incentivized by these rules, while also possibly increasing fair lending risk,” said Colgate Selden, counsel at the Alston & Bird law firm, during a webinar last week sponsored by InsideMortgage Finance. “The ability-to-repay, loan originator compensation, mortgage servicing, and Truth in Lending Act/Real Estate Settlement Procedures Act integrated disclosure rules all contain provisions where persons could indirectly increase their fair lending risk through compliance with those rules.” Among the ATR-related fair lending issues discussed by Selden, a former CFPB official, are...

Naysayers have been predicting the demise of publicly traded mortgage real estate investment trusts for two years now and have been consistently disappointed. It’s hard to say whether things will be different this time around. According to figures compiled by Inside MBS & ABS, it appears that most REITs have been intentionally reducing their MBS holdings over the past several quarters, preparing for the day when bond prices finally fall. At Sept. 30, 16 publicly traded REITs held...[Includes one data chart]