During a legislative markup session this week, the House Financial Services Committee approved H.R. 2673, the Portfolio Lending and Mortgage Access Act, introduced by Rep. Andy Barr, R-KY, which would deem all mortgages held in portfolio to be qualified mortgages under the Consumer Financial Protection Bureau’s ability-to-repay rule. Republican supporters characterized the bill as the ultimate “skin in the game” measure and noted it was specifically drafted to avoid the pitfalls of the “originate to distribute” model so heavily criticized for contributing to the financial crisis. But Democrat opponents said...

The amended consent process that led to faster cash payouts to victims of improper loan modifications and foreclosure practices should be evaluated and tested further to ensure servicers’ implementation of foreclosure prevention principles, according to the Government Accountability Office. The new GAO report represents the third and final phase of the watchdog’s examination of the Office of the Comptroller of the Currency’s Independent Foreclosure Review (IFR) process. In 2013, the IFR was replaced for most servicers with cash payments and foreclosure prevention actions. The latest report found...

There’s a growing concern among participants in the secondary market that legislation in the Senate to reform the government-sponsored enterprises won’t be able to allow the to-be-announced market to function. The latest anxieties were raised by officials at Fannie Mae and Freddie Mac, whose securities flourish in the TBA market. Legislation in the Senate from Sens. Tim Johnson, D-SD, and Mike Crapo, R-ID, calls for the preservation of the TBA market but doesn’t provide any roadmap for how the proposed Federal Mortgage Insurance Corp. should accomplish that feat. “Unless the FMIC sets...

Charge-offs in the credit-card ABS sector reached a new low in the first quarter of 2014, due mostly to a steady decline in delinquencies and lower bankruptcy rates, according to Fitch Ratings. Loss rates continued to break new records heading into 1Q14, falling to 2.89 percent during the latest March distribution period, even as average charge-offs dropped to a record 3.00 percent for 1Q14 from 3.04 percent in 4Q13. “This marks 15 consecutive quarters of improvement and is approximately 25 percent lower year-over-year,” said Fitch Ratings Credit Card ABS Group Managing Director Michael Dean and Director Herman Poon in a new report. Late payments also fell...

Mortgage industry participants should expect the Consumer Financial Protection Bureau to cast both a wider and deeper dragnet of Home Mortgage Disclosure Act data compared to the Federal Reserve’s oversight of the nearly 40-year-old law, according to CoreLogic. A new CoreLogic report forecasts a more muscular collection of industry information following the Dodd-Frank Act’s transfer of HMDA supervision and enforcement from the Fed to the bureau, including a significant shift in ...

The status of housing finance reform legislation has become a topic of open speculation after the leadership of the Senate Banking, Housing and Urban Affairs Committee announced a last-minute postponement of a markup this week following the submission of some 100 amendments and the continued non-commitment of support by some committee Democrats. Committee Chairman Tim Johnson, D-SD, and Ranking Member Mike Crapo, R-ID, announced to a packed committee chamber earlier this week that they would delay consideration of S. 1217 in order to “build a larger coalition of support” for their reform measure. “While we have the votes to report the bill out today, members of the committee have asked...

Although the Johnson-Crapo housing finance reform bill has little chance of becoming law this year, comments on the legislation submitted to the Treasury Department by the Federal Housing Finance Agency strongly suggest that the current regulator of the government-sponsored enterprises wants its reincarnation to have expanded oversight powers. Industry officials, lobbyists and executives tracking the bill note that if the FHFA has its way, the new Federal Mortgage Insurance Corp. will become a supervisor of nonbanks that originate loans slated for securitization. Currently, the FHFA serves...

Consumer Financial Protection Bureau examiners have reportedly become suspicious of certain mortgage banking executives’ participation in the exam process and escalated their interaction by pressing them to provide their input under oath. Officials at the consulting firm of Garrett, McAuley & Co. reported a disturbing development at a mortgage company in a Mid-Atlantic state undergoing a CFPB exam. “The examiner-in-charge apparently thought that the owner was lying, and the CFPB now wants to question him under oath,” principal Joe Garrett said in a recent note to clients. “Under oath? Whether or not they can prove...

About two-thirds of banks are willing to offer loans that don’t meet standards for qualified mortgages, according to a recent survey by the American Bankers Association. Lenders are concerned about the liability that comes with non-QMs, but borrower demand for non-QMs has prompted a wider range of mortgage offerings than many had projected after the Consumer Financial Protection Bureau’s QM standards took effect. “More and more, in talking to our banks, I would say there’s an increased comfort in going beyond QM, doing business the way they’ve traditionally done business and expecting to meet either the QM or the ability-to-repay standard.” said Jonathan Miller, deputy director of the Federal Deposit Insurance Corp.’s division of depositor and consumer protection. At a meeting last week by the FDIC’s Advisory Committee on Community Banking, Derek Williams, president and CEO of Columbus Community Bank, said...

Credit officers over the past three months reported an increased demand for non-agency MBS, suggesting that private capital could be flowing more freely through the U.S. housing market, according to a Federal Reserve survey released last week. The Fed’s Senior Credit Officer Opinion Survey on Dealer Financing Terms for March 2014 found little change in the credit terms among the 22 participating institutions, with the exception of securities financing, where nearly one-half of dealers reported a hike in demand for funding non-agency residential MBS. “Dealers assessed...