The American Securitization Forum has published an implementation guide to the due diligence requirements for securitization positions under the market risk rule issued by the federal bank regulators in August, as well as guidance the Office of the Comptroller of the Currency put out this past June. One of the primary purposes behind the rule and the guidance was to lessen industry dependence on credit ratings and to promote instead greater reliance upon proper due diligence. “With the adoption of the final rules, market participants have been working...

Fannie Mae and Freddie Mac have reduced their dependency on U.S. government support, but there may be restructuring issues within the budget talks to resolve the looming “fiscal cliff,” according to Fitch Ratings. Fitch this week affirmed its “AAA” rating for both Fannie and Freddie even as its outlook for the two GSEs remains “negative.” However, the rating agency warned that its outlook for Fannie and Freddie depends upon the economy and the ability of political leaders to come to an accord on taxes and government spending before year’s end.

Federal Reserve Chairman Ben Bernanke late last week reiterated his view that tight underwriting standards set by lenders are hindering a broader recovery of the housing market. Lenders, meanwhile, cite concerns with repurchases and regulatory uncertainty. Bernanke noted that low home prices and historically low interest rates have not prompted the “powerful housing recovery” that has typically occurred in the past after housing problems. “Unfortunately, while some tightening of the terms of mortgage credit was certainly an appropriate response to the earlier excesses, the pendulum appears to have swung too far, restraining the pace of recovery in the housing sector,” he said. More than half of the lenders that responded to the Fed’s senior loan officer opinion survey earlier this year said...

The recent actuarial report that showed the FHA’s insurance fund is underwater to the tune of $16.3 billion ought to sound an alarm for policymakers to refocus the agency on its original public mission, some leading policy experts say, and perhaps even motivate them to resolve Fannie Mae and Freddie Mac while they’re at it. “I think FHA’s financial condition is extremely precarious – much worse than FHA and HUD are making it out to be,” said long-time critic Edward Pinto, a resident fellow at the American Enterprise Institute, a conservative think tank in Washington, DC, and a former official at Fannie Mae. As he sees it, today’s very low interest rate environment means the economic value of FHA’s forward mortgage fund really is a far worse at a negative $31 billion. “And when you throw in the negative on the reverse [mortgage] program, you get close to $35 billion.” Compounding the problem is...

In what may prove to be the first of many announcements dealing with the January 2013 mandate for changes under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB has decided to give the mortgage lending industry extra time to implement certain new required consumer disclosures. Per the CFPB’s announcement in a new final rule, mortgage lenders will not be required to provide those disclosures until after the bureau’s other previously proposed mortgage disclosure rules are finalized...

Mortgage lenders say they support the CFPB’s overall effort to integrate and simplify the consumer disclosures required under the Truth in Lending Act and the Real Estate Settlement Procedures Act, but they’re also urging the bureau to proceed at a more deliberate pace when it comes to implementing such integration. In a public comment letter to the bureau, the Mortgage Bankers Association made three overarching points, the first of which is that the agency should continue to focus its energy on the enormous job of...

The CFPB has taken several steps to develop, document and implement an information security program. However, additional steps are needed if the bureau is to have an information security program that is consistent with the Federal Information Security Management Act of 2002, according to an audit report issued by the Federal Reserve’s Office of Inspector General. “We recommend that the Chief Information Officer develop and implement a comprehensive information security strategy that identifies specific goals...

Agencies Announce Increases in Dollar Thresholds for Exempt Consumer Credit and Lease Transactions. The CFPB and the Federal Reserve Board last week announced increases in the dollar thresholds in Regulation Z (Truth in Lending Act) and Regulation M (Consumer Leasing Act) for exempt consumer credit and lease transactions. The Dodd-Frank Wall Street Reform and Consumer Protection Act requires yearly adjustments to these thresholds by the annual percentage increase in the Consumer Price Index for Urban Wage...

Mortgage lenders of all sizes and stripes got some breathing room late last week when the Consumer Financial Protection Bureau announced it was delaying the effective date of some new requirements under its integrated mortgage disclosure project to provide a more seamless integration with other mortgage disclosures the agency has proposed. The delay applies to more than a dozen disclosures, including those on the cancellation of escrow accounts, consumersf liability for debt payment after foreclosure, and the creditor acceptance of partial payment. Under the Dodd-Frank Act, the new disclosures were scheduled to take effect Jan. 21, 2013. gTo avoid potential consumer confusion and reduce compliance burden for industry, the bureau plans...

The Making Home Affordable program might not tap even half of the $29.9 billion in Troubled Asset Relief Program funds allocated for it, according to new estimates from the Treasury Department. Recently loosened requirements for the Home Affordable Modification Program Tier 2 could increase activity, though initial signals suggest that the increase will not be significant. Some 1.30 million MHA actions had been implemented as of the end of the third quarter of 2012, up from 1.22 million at the end of the second quarter, according to an Inside Mortgage Finance analysis. First-lien mods as part of HAMP Tier 1 dominated MHA activity, which also included second-lien mods, short sales and unemployment forbearance plans and other programs. There were...