Plans at Wells Fargo to issue non-agency mortgage-backed securities in 2017 didn’t come to fruition. But growth limitations recently placed on the bank by the Federal Reserve have prompted speculation that Wells could issue non-agency MBS this year. This month, the Fed issued a cease and desist order that temporarily limits the firm’s maximum total consolidated assets to the level they were as of the end of 2017. The order was one of the last acts of former Fed Chair Janet Yellen, who ...

The Trump administration has released a proposed fiscal year 2019 budget that envisions big changes for the CFPB. According to budget documents, the White House is proposing to restructure the bureau, limit its mandatory funding in 2019, and provide discretionary, congressional appropriations to fund the agency beginning in 2020. Many of the proposed changes would require revisions to the bureau’s charter by Congress that would likely face a difficult path to enactment ...

The House of Representatives last week voted 271-145 to approve targeted legislation to address the disclosure of certain charges in the Truth in Lending Act/Real Estate Settlement Procedures Act integrated disclosure, or TRID. H.R. 3978, the TRID Improvement Act of 2017, would require the CFPB to allow for the calculation of discounted title insurance rates that companies may offer to consumers for policies that cover both the lender and the homeowner. The bill was introduced ...

The House of Representatives has passed H.R. 1153, “The Mortgage Choice Act,” legislation that would make two adjustments to the Truth in Lending Act definition of points and fees regarding title fees charged by affiliates of the lender. The bill aims to make more loans eligible for qualified-mortgage status by excluding points and fees paid for affiliated title charges and escrow charges for insurance and taxes. House Financial Services Committee Chairman Jeb Hensarling, R-TX, explained ...

The ruling by the U.S. Court of Appeals for the District of Columbia Circuit that the CFPB wrongly interpreted the Real Estate Settlement Procedures Act will have a huge impact on the mortgage market and the regulatory landscape, industry attorneys said. In a closely-watched case involving PHH Mortgage and its captive mortgage reinsurance unit, the court upheld the notion that the plain language of RESPA permits a bona fide payment by one settlement service provider to another if ...

QM Portfolio Lending Legislation Would Cost CFPB $1 Million to Implement. Enacting H.R. 2226, the Portfolio Lending and Mortgage Access Act, introduced last April by Rep. Andy Barr, R-KY, would cost the CFPB $1 million, according to a new analysis by the Congressional Budget Office. “Using information from the CFPB, CBO estimates that enacting H.R. 2226 would increase direct spending by $1 million in 2019 for the agency to issue rules to implement ... [Includes four briefs]

At $600K a Year, Fannie Mae CEO Tim Mayopoulos is Underpaid. Although Fannie Mae reported pre-tax income of $18.4 billion in 2017, its CEO Timothy Mayopoulos took home, once again, a base salary of roughly $600,000, the limit for both GSE CEOs and a figure that seems exceedingly low when compared to financial services firms of similar size. A new 10-K filing from the company notes: “Our chief executive officer’s compensation in 2017 was more than 90 percent below the market median for comparable firms. Our inability to offer market-based compensation hinders our succession planning for our chief executive officer role, and potentially our ability to hire...

The House of Representatives this week approved bills extending regulatory relief pertaining to the integrated disclosure rule under the Truth in Lending Act and the Real Estate Settlement Procedures Act, or TRID.

The Department of Veterans Affairs will require lenders to provide early disclosures to veterans seeking to refinance into a VA Interest Rate Reduction Refinance Loan. The new policy aims to ensure that the VA streamline refi loan they sought would actually lower their monthly mortgage payments and is not just a scam for lenders to charge higher fees. Loan churning, or serial refinancing, is at the root of the VA policy change. Churning refers to multiple refinancing of an unseasoned mortgage loan within a very short time, often within six months of origination. Serial refinancing may add more payments and interest to the new loan, prolonging debt repayment, and can strip equity. It also potentially raises the risk of default by the borrower. In addition, the risk of prepayment could affect pricing of Ginnie Mae securities, which could cause lenders to charge higher rates on VA loans to make up for the ...

PennyMac Financial will resume originating jumbo mortgages in the correspondent channel this year, the lender announced this week. And jumbos will be offered in the broker channel operations recently launched by PennyMac. The House approved a bill this week that would shrink the potential market for non-qualified mortgages. H.R. 1153, the Mortgage Choice Act, was approved on a 280-131 vote with some bipartisan support. The legislation would ... [Includes two briefs]