The Department of Housing and Urban Development has released a final rule defining a “qualified mortgage” that is insured by the FHA. The final rule will be effective on Jan. 10, 2014. The HUD rule builds off the QM/Ability-to-Repay rule, which the Consumer Financial Protection Bureau finalized earlier this year. The Dodd-Frank Act requires HUD to propose a QM definition that is aligned with the ability-to-repay criteria set out in the Truth in Lending Act and with the agency’s mission to ...

In the third quarter of 2013, the level of home-mortgage debt outstanding grew for the first time since early 2008 as the housing industry continued to climb out of the crater. The Federal Reserve this week announced there was $9.864 trillion of single-family mortgages outstanding at the end of September, a tiny 0.1 percent increase from the previous quarter. But after four and half years of decline, the gain seemed monumental. The central bank noted that all the increase was in first mortgages, while the supply of home-equity loans outstanding continued to shrink. Servicing attached to Ginnie Mae, Fannie Mae and Freddie Mac programs continued...[Includes one data chart]

House Financial Services Committee Chairman Jeb Hensarling does not have the votes needed to pass the Protecting American Taxpayers and Homeowners Act in the House and, unless he is willing to be flexible on certain key issues, the package may not reach the House floor at all in this Congress, according to industry lobbyists. Talk that Hensarling, R-TX, may make another push to get the PATH Act to the House floor surfaced this week following an opinion piece he published in the Nov. 27 issue of the Washington Times. In that op-ed, the chairman focused on the bill’s FHA reform component. Hensarling underscored...

The CFPB has gone ahead and issued the last big piece to the mortgage finance puzzle it was mandated to manufacture by the Dodd-Frank Act, the integrated mortgage-disclosure rule under the Real Estate Settlement Procedures Act and the Truth in Lending Act and related forms. The good news for the mortgage finance industry – apart from the 20-month implementation period – is that the new rule and forms, part of the bureau’s “know before you owe” initiative, are not nearly as “transformational” towards the fundamental nature of the...

The CFPB and the payday lending industry continue to lock horns over the bureau’s controversial white paper on payday and deposit advance loans, most recently with the bureau rejecting “in its entirety” an appeal from the Community Financial Services Association, national payday lending trade group, which is seeking a retraction of the white paper. Back in April, the bureau put out the white paper, which was based on a study it did of 15 million storefront payday loans and 100,000 accounts eligible for deposit advances. Among its findings...

Loan modification trends have diverged in recent quarters, with activity in the Home Affordable Modification Program remaining strong while the use of proprietary loan mods dropping significantly. A total of 181,242 loan modifications were completed in the third quarter of 2013, according to Hope Now, a 22.1 percent decline compared with the third quarter of 2012. The decline was driven by proprietary loan mods, with 136,106 completed in the third quarter of 2013, a 26.7 percent reduction from a year ago. Some 45,136 permanent HAMP mods were completed...

Commercial banks continued to see their investment in residential MBS slowly evaporate during the third quarter of 2013 even though the overall market appears to finally be growing again. A new Inside MBS & ABS analysis of recently-released call report data shows that commercial banks and thrifts held a combined $1.513 trillion of residential MBS as of the end of September. That was down 1.0 percent from the end of June and represented the lowest level since the middle of 2011. Depositories and other private MBS investors have...[Includes two data charts]

In just a matter of days, JPMorgan Chase agreed to two separate settlements totaling $17.5 billion to resolve federal and state civil claims as well as representation and warranty and servicing claims involving residential MBS. On Nov. 19, the Department of Justice, along with other federal and state agencies, announced a $13 billion settlement with JPMorgan, which acknowledged making misrepresentations about billions of dollars in MBS sold to investors prior to Jan. 1, 2009. The settlement is said to be the largest combination of damages and civil fines for a single entity in U.S. history. Most of the damage was inflicted...

The Securities and Exchange Commission is preparing to take more cases to trial in lieu of settling, according to Mary Jo White, chair of the SEC, who prompted a change in the agency’s protocol for settling cases with no admission or denial of guilt. “In this age of diminishing trials, we at the SEC may be about to reverse the trend a bit,” White said in a speech late last week. Shortly after White took over as chair of the SEC, she said...

Members of the Federal Open Market Committee kicked around various approaches to winding down the central bank’s third installment of quantitative easing during their policy meeting last month, but ultimately didn’t budge the ship off its bearings. Recently released minutes of the Oct. 29-30 FMOC policy meeting revealed that participants “generally expected that the data would prove consistent with the committee’s outlook for ongoing improvement in labor-market conditions and would thus warrant trimming the pace of purchases in coming months.” However, committee members also considered...