The Federal Housing Finance Agency’s failure to recognize and quickly provide law enforcement authorities with information about allegations of fraud and other potential criminal conduct presents a “significant risk” for the agency and the government-sponsored enterprises it regulates, concluded the FHFA’s watchdog. The Office of the Inspector General of the FHFA this week issued...

Federal banking regulators have the unenviable task of harmonizing two mortgage disclosure documents – one under the Truth in Lending Act and one under the Real Estate Settlement Procedures Act – for consumers who generally won’t read them and don’t fully understand them when they do. And mortgage lenders have the same kinds of stubborn obstacles to overcome if they’re going to be able to more effectively design and successfully market products consumers will respond…

The White House is reportedly considering nominating former banker Raj Date, a top deputy of Consumer Financial Protection Bureau interim head Elizabeth Warren, to be the first formal director of the nascent agency...

Federal Roundup Federal Reserve Board TILA/HOEPA fee-based triggers. The total points and fees payable by borrowers utilizing certain closed-end home mortgages at or before closing that trigger additional disclosure requirements under the Truth in Lending Act and the Home Ownership and Equity Protection Act have been raised to $611 or 8 percent of the total loan amount, the Federal Reserve Board announced in the June 20, 2011, Federal Register. The effective date is Jan. 1, 2012... MORE

PMI Mortgage Insurance Co. has launched its MODEL servicer program; the Dodd-Frank Wall Street Reform and Consumer Protection Act is an epic financial services law of unprecedented scale; American voters strongly support pro-housing politicians; MORE...

The proposed rule on risk retention for MBS and ABS needs to be re-drafted and published again for another round of public comment because many definitions are unclear and, as it stands now, the proposal is a viable threat to the securitization market, according to industry groups. Although federal regulators recently extended the comment period on the proposal, both the Se-curities Industry and Financial Markets Association and the American Securitization Forum submitted detailed critiques of the plan late last week. “SIFMA has described...

With most of the attention focused on loan originators, securitizers and mortgage servicers in the recent foreclosure mess, trustees have managed to escape regulatory scrutiny. But not for long. The relative safety enjoyed so far by trustees ended this week as reports surfaced of a joint in-quiry by the New York and Delaware attorneys general into whether documents in mortgage securitiza-tion transactions for which the Bank of New York Mellon and Deutsche Bank were named trustees are proper and valid. The offices of NY Attorney General Eric Schneiderman and DE Attorney General Joseph Biden III...

New federal restrictions on mortgage broker compensation will likely add momentum to the shift away from wholesale mortgage production programs and ultimately dampen MBS prepayment speeds, according to an analysis by Barclays Capital. Most major primary market lenders have been moving away from the broker market since the housing sector began to crumble in 2007. According to Inside Mortgage Finance, an affiliated newslet-ter, the broker share of new mortgage originations peaked in 2005 at 31.3 percent of primary market lending. Between 2005 and 2007, brokers accounted...

The Mortgage Bankers Association has asked the FHA to clarify its view of “credit approval” for loan applications received prior to Oct. 1 in connection with the possible implementation of lower loan limits on that date. In a letter to the Department of Housing and Urban Development, the MBA made clear it continues to support the current, temporary loan limits. However, should the loan limit rollback occur as scheduled, the FHA must ensure that the change is implemented without disrupting the FHA financing process for consumers, the trade group said. In this regard, the MBA asked the FHA to explain ...

Many lenders may have to reconsider the costs and benefits of FHA lending in light of the federal government’s increasingly litigious approach to redressing FHA losses, warned industry risk experts. Not only has the government begun using the False Claims Act (FCA) with alarming frequency in alleged mortgage fraud cases involving taxpayer funds, but it also has found a companion statute in the federal Program Fraud Civil Remedies Act (PFCRA) of 1986 to increase recovery of FHA losses. In a recent client alert, Canfield & Associates, a government relations and consulting firm in Alexandria, VA, warned ...