The CFPB announced it will release guidance later this summer to provide exemptions to smaller financial institutions under the Home Mortgage Disclosure Act. The regulatory relief comes from the Dodd-Frank reform act – the Economic Growth, Regulatory Relief, and Consumer Protection Act – signed into law in May. The new law exempts depository institutions and credit unions that originated fewer than 500 closed-end mortgage loans or 500 open-end lines of ...

Industry groups are calling on the CFPB to provide clarification of fair lending standards under the Equal Credit Opportunity Act as it applies to disparate impact, according to recently filed comment letters on inherited regulations. Among other things, lenders are asking the CFPB to review its use of disparate impact based on a Supreme Court of the United States’ decision in Inclusive Communities. The case established a framework for the application of disparate impact ...

CFPB Studies How Student Loan Borrowers Transition Out Of Debt. The CFPB recently issued a report on student loan payments and broader household borrowing. The report provides a close look at borrowers’ use of credit as they approach and make their final student loan payments and what follows in the months beyond. One key finding: Most borrowers pay off a student loan before the final installment is due, often with a single large payment. Further [Includes Four Briefs] ...

Fannie Mae, Freddie Mac and Ginnie Mae are relying more heavily on special rules that grant most of their single-family business qualified-mortgage status even if the debt-to-income ratio of the loan exceeds 43 percent. [Includes two data charts.]

Starwood Property Trust announced this week that it agreed to purchase up to $600.0 million of non-qualified mortgages originated by Impac Mortgage Holdings in the next 12 months. The real estate investment trust also revealed that it has already acquired $900.0 million of non-QMs from Impac. “We are excited to formalize our partnership with Impac, which we believe will help scale our opportunity to provide non-QM loans to high-quality borrowers while sourcing ...

The credit risk profile of incoming FHA business has shifted significantly since the beginning of last year, according to a new Inside FHA/VA Lending analysis of Ginnie Mae mortgage-backed securities data. The biggest development has been the growth of loans with high debt-to-income ratios. There has also been a significant increase in the share of refinance loans that are cash-out transactions. FHA officials are well aware of these developments, having publicly mentioned them in testimony on Capitol Hill and at industry conferences. Officials have also raised concerns about FHA loans with downpayment assistance, although the MBS data don’t seem to indicate that there has been much change on that score. Among FHA loans endorsed in April and May, only 41.9 percent were at or below the benchmark DTI test for qualified mortgages, which is 43 percent. Through 2015 and 2016, well over half of new ... [Chart]

Ginnie Mae will be working with FHA, VA and the U.S. Department of Agriculture to standardize origination policies and requirements for digital mortgages as it moves into the digital age of its secondary market business. Ginnie will coordinate with the agencies while developing technical standards for electronic closings, digital mortgage instruments and electronic vaults. All this work is part of the agency’s three-year strategy, Ginnie Mae 2020, to modernize its mortgage-backed securities program and platform, strengthen its counterparty risk management capability, and explore new ways to lower or eliminate risk from the system. As part of the modernization effort, Ginnie envisions a process that would allow it to accept digital promissory notes and other digitized loan files as eligible collateral for its MBS. It would encompass loan application through securitization. The plan calls for gradual implementation of ...

FHA purchase loan originations, which comprise the bulk of the agency’s business, declined during the first quarter of 2018 as mortgage interest rates continued to rise. Approximately $34.8 billion in FHA-insured purchase mortgages were made during the first three months, down 13.5 percent from the previous quarter. Purchase originations also fell 12.0 percent year-over-year, data showed. Purchase loans accounted for 71.1 percent of all FHA loans made to consumers in the first quarter. Fairway Independent Mortgage Corp. led all lenders with $880.8 million. This week, the benchmark 30-year fixed-rate mortgage rose by 1 basis point to 4.71 percent from last week, according to Bankrate’s weekly survey of large lenders. Four weeks ago, the rate was 4.64 percent. Over the past 52 weeks, the 30-year fixed has averaged 4.31 percent, Bankrate added. This week’s rate is 40 basis points higher than the ... [Charts]

Federal courts have thrown out the Consumer Financial Protection Bureau’s aggressive interpretation of anti-kickback provisions in the Real Estate Settlement Procedures Act. But plenty of questions remain about how new management of the agency will handle the issue or the fate of existing guidance on marketing service agreements, industry experts said this week.

The D.C. circuit decision involving PHH Mortgage and Sec. 8 of the Real Estate Settlement Procedures Act should lead the CFPB to rethink its 2015 guidance on marketing services agreements, industry groups say. The CFPB under former director Richard Cordray issued guidance suggesting that many MSAs are designed to evade RESPA’s prohibition on the payment and acceptance of kickbacks and referral fees. “What the bureau did was to create an impression that it would ...