Anecdotal and empirical evidence confirm that mortgage lenders are continuing to lighten up on their underwriting criteria. The loosening may not be as pronounced as it was in the run-up to the financial crisis, but there are concerns that it will intensify as the Federal Reserve raises interest rates. Fannie Mae’s latest mortgage lender sentiment survey found that more lenders said they have eased credit standards than tightened them, something the government-sponsored enterprise attributed to limited demand for residential finance and a negative outlook on profit margins. “The net share of lenders reporting easing of credit standards over the prior three months has continued...

Resolving the long-running conservatorships of Fannie Mae and Freddie Mac is drawing a lot of attention, but policymakers and industry groups don’t seem any closer to a consensus. For the most part, the executive branch and many groups representing large financial institutions want Congress to tackle the problem through legislation. Investors and some groups representing smaller lenders say the Federal Housing Finance Agency and Treasury could do more to pave the way. Motivating the debate is...

The mortgage servicing market maintained its steady growth pattern during the second quarter of 2017, inching up 0.7 percent to $10.430 trillion, according to new Federal Reserve data. That was the biggest number for mortgage debt outstanding since the first quarter of 2011, when the market stood at $10.439 trillion. Most of the growth has been in Fannie Mae, Freddie Mac and Ginnie Mae servicing but portfolio holdings of whole loans are also on the upswing. There was...[Includes two data tables]

Federal banking regulators this week formally proposed changes to capital rules that would give smaller institutions more leeway to hold mortgage-servicing rights. Current rules require banks to take capital deductions for any MSR holdings that exceed 10 percent of tier 1 capital. Some say this requirement has contributed to the banking industry’s retreat from the mortgage servicing business. The proposal would raise...

Last week, the CFPB issued new proposed policy guidance spelling out how it intends to disclose the loan-level data that financial institutions will report under the Home Mortgage Disclosure Act. The guidance would apply to HMDA data to be reported under Regulation C as of Jan. 1, 2018. The bureau intends to make this data available to the public starting in 2019. “Public disclosure of mortgage data is central to the achievement of HMDA’s goals,” the agency said. “The bureau has considered whether and how HMDA data should be modified prior to its disclosure to the public, in order to protect applicant and borrower privacy while also fulfilling HMDA’s public disclosure purposes.” First, the CFPB is proposing to exclude from ...

Amending one regulation to make it easier for lenders to comply with another, the CFPB last week issued modified Equal Credit Opportunity Act regulations it hopes will give mortgage lenders greater flexibility in collecting consumer ethnicity and race information. The bureau “is issuing a final rule that amends Regulation B [which implements the Equal Credit Opportunity Act] to permit creditors additional flexibility in complying with Regulation B in order to facilitate compliance with Regulation C [which implements the Home Mortgage Disclosure Act]...,” the rule states. The new rule also adds certain model forms and removes others from Reg B, and makes various other amendments to the regulation and its commentary to facilitate the collection and retention of information about the ...

The latest supervisory highlights report from the CFPB found that mortgage lenders, banks and nonbanks alike, put the controversial TILA/RESPA Integrated Disclosure rule – TRID – into effect without much of a problem, more or less. “Initial examination findings and observations conclude that, for the most part, supervised entities, both banks and nonbanks, were able to effectively implement and comply with the Know Before You Owe mortgage disclosure rule changes,” the report stated. However, examiners did find some violations relating to the content and timing of loan estimates and closing disclosures. The problem, however, is that the CFPB does not indicate in these reports which lenders or how many of them may have been guilty of the infractions, so there’s no way ...

The CFPB has frequently failed to provide the mortgage industry with enough guidance to ensure proper compliance with its substantial outpouring of new rules and regulations, resulting in “regulation by enforcement” far too often, according to a new white paper issued by the Mortgage Bankers Association.“Director Richard Cordray has argued that the bureau’s enforcement regime provides ‘detailed guidance for compliance officers’ and that it ‘would be compliance malpractice for the industry not to take careful bearings from [consent] orders about how to comply with the law,’” the white paper pointed out. “Unfortunately, the reality is that the bureau’s enforcement program offers only fragmentary glimpses of how the bureau interprets the laws and regulations it enforces.” Instead of giving the ...

It Looks Like New HMDA Requirements Will Proceed. Earlier this year, the mortgage industry made a concerted push for either the CFPB, or failing that, Congress, to delay implementing all the new data collection and reporting requirements lenders will face under the Home Mortgage Disclosure Act regime.... Feds to Amend CRA Regs to Conform to CFPB’s HMDA Changes. The Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency on Wednesday issued a joint notice of proposed rulemaking to amend their respective Community Reinvestment Act regulations, mostly to conform to the changes the CFPB made to Regulation C, which implements the Home Mortgage Disclosure Act....

Fifteen industry trade groups and other organizations sent a letter to Treasury Secretary Steve Mnuchin and GSE regulator Mel Watt late this week, reminding them that Fannie Mae and Freddie Mac should be reformed through legislation and not some type of recapitalization plan where Congress is cut from the equation.“We are increasingly concerned about efforts to derail comprehensive reform,” they write. “We urge both Treasury and Federal Housing Finance Agency to focus on continuing to work with Congress to end conservatorship through comprehensive, bipartisan, legislative reforms.” No specifics are provided regarding the derailment comment. Presently, there are no viable bills before Congress where a consensus on GSE reform might be reached.