Fannie Mae and Freddie Mac have each suspended Republic Mortgage Insurance Co. and its affiliate RMIC of North Carolina effective immediately as approved mortgage insurers after the GSEs concluded the mortgage insurer will no longer be able to meet mandatory capital requirements.According to Fannie’s July 29 announcement, RMIC breached its regulatory risk-to-capital limits required by North Carolina, the mortgage insurer’s state of domicile, as of Sept. 30, 2010.

The private mortgage insurance industry is trying to preserve its viability in the mortgage world that has thrashed its financial health, urging regulators to expand the definition of a qualified residential mortgage to include loans that are privately insured. According to an analysis done by Milliman, Inc., an actuarial and insurance consulting firm, on behalf of the Mortgage Insurance Companies of America, private MI is a controlling factor that mitigates the risk of default, particularly in ...

While many commenters support the proposed exemption for the government-sponsored enterprises from new risk-retention rules in the short-term, opinions vary as to just how long Fannie Mae and Freddie Mac should enjoy such an exemption and its long-term impact on private securitizations. Federal regulators earlier this year proposed a rule which would require issuers of mortgage-backed securities to hold a minimum 5 percent of the credit risk of the assets underlying their securities unless the deal is backed by “qualified residential mortgages.” The proposed rule would exempt ...

The new Consumer Financial Protection Bureau is making substantial progress on its initiative to meld the mortgage disclosure forms under the Truth in Lending Act and the Real Estate Settlement Procedures Act into one, more simplified disclosure. Still, a number of questions are being raised in the process, not the least of which has to do with what kind of regulation will eventually accompany the forms. “The first issue is that these forms just don’t reflect the regulatory and statutory requirements in many ways,” said Steve Kaplan, a partner with law firm K&L Gates LLP in its Washington, DC, office during a webinar last week sponsored by Inside Mortgage Finance Publications. “So someone who is a practitioner and who’s been dealing with these issues for years will say, ‘What is this form? This is great and dandy but do I get a safe harbor? Do I still violate the statute by providing this form?’” ...

The Consumer Financial Protection Bureau officially began functioning as a banking regulator last week, and even though it doesn’t yet have a director confirmed by the Senate, it’s already one of the most powerful regulators in the federal government, having both complete regulatory authority over the entire industry and supervisory responsibility for large banks. Among the laws the CFPB will now be in charge of enforcing are the Alternative Mortgage Transaction Parity Act, the Community Reinvestment Act, the Equal Credit Opportunity Act, the Fair Credit Billing Act, the Fair Credit Reporting Act (except sections 615(e), 624 and 628),and the Fair Debt Collection Practices Act. ...

The Federal Trade Commission issued a final rule to strengthen consumer protections by banning deceptive claims about consumer mortgages in advertising or other types of commercial communications. The new rule lists 19 examples of prohibited deceptive claims, including misrepresentations about the existence, nature, or amount of fees or costs to the consumer associated with the mortgage; the terms, amounts, payments, or other requirements relating to taxes or insurance associated with the mortgage; and the variability of interest, payments, or other terms of the mortgage. ...

The new Consumer Financial Protection Bureau has issued a number of interim final rules in just its first week of official business as a new federal regulator, including one that establishes the procedures for the public to obtain information under the Freedom of Information Act, the Privacy Act and in legal proceedings. This interim final rule also establishes the CFPB’s rules regarding the confidential treatment of information obtained from persons in connection with the exercise of its authorities under federal consumer financial law. ...

Massachusetts. State Attorney General Martha Coakley reportedly plans to obtain documentation filed by Mortgage Electronic Registration Systems as part of the broader investigation by a 50-state coalition of attorney generals into potentially unlawful foreclosure practices. New Jersey. Former mortgage broker Ara Mesropian, 39, of Paramus, NJ, pleaded guilty to charges that he participated in a mortgage fraud scheme which defrauded lenders and generated millions of dollars in fraudulent mortgage loans. ...

MBS and ABS investors would have an easier time organizing to press deal sponsors to address potential problems under a revised proposed rule on shelf registration that was approved by the Securities and Exchange Commission this week. The agency made several major changes to its proposed overhaul of shelf eligibility requirements that was aired back in 2010 and put the revised package out for public comment. Most of the changes reflect public comment on the original proposal as well as the passage of the Dodd-Frank Act. Under the latest proposal, MBS and ABS issuers would be required to ...

The Federal Reserve’s proposed rulemaking that would establish the “qualified mortgage” as a standard for complying with the ability-to-repay requirement under the Dodd-Frank Act would create a number of significant legal liabilities that will threaten buyers of MBS, Wall Street groups said. The American Securitization Forum emphasized that questions about the lack of objective criteria in the proposal for determining whether a loan is a QM, and how little legal certainty the final rulemaking would actually provide, become of “critical importance when ...