The Consumer Financial Protection Bureau this week finalized a rule change that allows lenders to fix inadvertent mistakes that send mortgages over the 3 percent cap on points and fees for qualified mortgages.Under the “right-to-cure” amendment, a lender can, under limited circumstances, re-fund the excess amount of interest to keep the loan a QM.

The non-agency mortgage-backed securities market got clarity about risk-retention requirements in a new final rule approved this week by six federal regulators. Given current market conditions, it is unlikely to have any impact. The regulators created an exemption big enough to drive a truck through. Sponsors of non-agency MBS backed by qualified residential mortgages are not required to retain a 5 percent interest in the transaction. As expected, the QRM parameters were lined up with ...

Lenders have a number of underwriting options under the ability-to-repay rule when originating mortgages for self-employed borrowers, according to officials at the Federal Deposit Insurance Corp. Self-employed borrowers account for a sizeable portion of the potential customer base for jumbo mortgages. The FDIC hosted a conference call this week to address concerns banks have raised regarding the Consumer Financial Protection Bureau’s ATR rule, and one of the most ...

California continued to dominate jumbo originations in 2013, according to an Inside Nonconforming Markets analysis of data from the Home Mortgage Disclosure Act. The $96.74 billion in jumbos originated in California in 2013 accounted for 36.9 percent of total jumbo production during the year. The analysis defines jumbos as loans that exceed a county’s government-sponsored enterprise loan limit for 1-unit mortgages. If the county isn’t available, data cover ... [Includes one data chart]

The Consumer Financial Protection Bureau this week issued a final rule providing lenders with a right to cure a mistake when the points and fees on what was intended to be a qualified mortgage inadvertently surpass the allowable points-and-fees cap on QMs. Points and fees charged to a borrower for a QM generally can’t exceed 3.0 percent of the loan principal at the time the loan is made. If a lender discovers after the loan has closed that the ... [Includes three briefs]

A top-ranking housing official soon to become acting FHA commissioner assured lenders that the agency is reviewing the pricing of its mortgage insurance, but made no promises during the annual convention of the Mortgage Bankers Association held this week in Las Vegas. Biniam Gebre, now the deputy assistant secretary for housing at the Department of Housing and Urban Development, said the agency “has been reviewing our premium levels on a regular basis.” He added, “I’m sure we will come back to it over the next couple months and next year.” The pricing of FHA mortgage insurance premiums “is a very important question,” Gebre said. Many in the mortgage industry have been focused on the availability of credit, but the affordability of credit is important as well, he added. “We believe we reached a tipping point when we raised premiums in response to ...

Buyers, sellers and real estate agents have until the end of 2014 to take advantage of the property-flipping waiver that the FHA had put in place in 2010 to increase the availability of affordable homes for first-time homebuyers and other purchasers. After Dec. 31, the Department of Housing and Urban Development will let the waiver lapse subjecting investors again to property-flipping prohibitions. Lenders say the waiver program worked well in underserved and hard-hit areas but HUD believes the program’s initial objectives have been attained and that prudence and vigilance are again called for to prevent abuses and potential losses. As a rule, the FHA prohibits “property flipping” in which a recently acquired property undergoes a minor makeover, is appraised with an artificially high value and is resold for a considerable profit. Most property flipping occurs within a matter of days, which prompted HUD to ...

In what may be a first, an individual borrower who received compensation under the terms of the consent order the Consumer Financial Protection Bureau brought against Castle & Cooke Mortgage late last year has since filed a class-action lawsuit. The litigation was brought on the basis of the same alleged violations of the Truth in Lending Act, the Real Estate Settlement Procedures Act and state law as were documented in the bureau’s enforcement action. Homeowner Luis Cabrales, on behalf of himself and “all others similarly situated,” recently filed...

Even though the origination volume of non-agency, non-jumbo mortgages is relatively small, private equity firms increasingly are eyeing the space, believing that within two years – or maybe sooner – the business could be producing robust profits. In short, investors want to enter non-agency lending before anyone else does – and at “ground level” prices. According to non-prime executives and investment advisors, private-equity funds of varying sizes want...

The mortgage credit box contracted quickly as the housing market slid toward disaster in 2007, but it’s proving to be much more difficult to stretch it back to what used to be considered normal. The subtitle to this week’s annual convention of the Mortgage Bankers Association could well have been “access to credit,” an idea that clearly dominated the conversation. Despite the recent unexpected drop in mortgage interest rates, most observers expect origination volume in 2015 to track closely to this year’s sluggish level and part of the problem is relatively weak home-purchase lending. Industry people are...