Delinquencies on non-qualified mortgages have been minimal and many borrowers with the loans seek to refinance relatively quickly, according to an analysis by Wells Fargo Securities. Among non-QMs with at least two years of seasoning that were included in nonprime mortgage-backed securities, more than 97 percent haven’t missed a payment, according to Wells. “Borrower credit performance has been robust so far, with delinquency rates and losses still subdued,” the analysts said. As of the end of July, only one non-QM in a nonprime MBS has gone...

An affiliate of Bayview Asset Management issued a $230.0 million non-agency mortgage-backed security this week largely stocked with seasoned mortgages, including one non-qualified mortgage. DBRS and Fitch Ratings placed AAA ratings on Bayview Mortgage Fund IVc Trust 2017-RT3, without putting much emphasis on the non-QM. Non-QMs had accounted for 2.1 percent of a $125.82 million MBS from Bayview that priced in July and 1.0 percent of a $208.13 million deal it priced in April. The sponsor of the deal will retain...

The 30-year fixed-rate mortgage is due for an overhaul, according to a proposal published by the Federal Reserve. Members of the Fed’s research staff suggest that banks should offer a type of mortgage with no downpayment requirements that essentially automatically refinances. Wayne Passmore, senior adviser in the Fed’s division of research and statistics, and Alexander von Hafften, a senior research assistant in the division, authored a working paper published by the Fed last week. Passmore and von Hafften cited...

Redwood Trust is preparing to issue its first non-agency mortgage-backed security backed by “expanded prime” mortgages. In the second quarter, Redwood acquired approximately $240.0 million of such mortgages, which have somewhat looser underwriting standards than what’s typically seen in the jumbo MBS market. Clayton Holdings reviewed 417 mortgages for the planned issuance, according to documents filed Aug. 30 with the Securities and Exchange Commission. The total unpaid principal balance of the loans wasn’t disclosed. The deal will include...

With speculation mounting that CFPB Director Richard Cordray could be out the door as early as the Labor Day weekend, the CFPB late last week announced it is amending the 2015 updates to the Home Mortgage Disclosure Act rule. The bureau has temporarily changed reporting requirements for banks and credit unions that issue home-equity lines of credit, and clarified the information that financial institutions are required to collect and report about their mortgage lending. Under the rules that are scheduled to take effect January 2018, financial institutions would have been required under HMDA to report HELOCs if they made 100 such loans in each of the last two years. The final rule issued this past Thursday increases that threshold to ...

Legal liability in the context of the so-called black hole in the CFPB’s TRID integrated disclosure rule remains a source of much anxiety for mortgage lenders, according to experts such as Rod Alba, senior vice president of mortgage markets, financial management and public policy for the American Bankers Association. “For lenders in general, [the biggest concern] is simply the liability that results from allowing the transaction to be negotiated until the last minute,” he said last week in an interview. “We don’t like telling the consumer, ‘You’re now three business days from closing; we can no longer negotiate and you must go through on this deal.’ That’s not pleasant.” Alba continued: “The consumer may say, ‘Well, no, that chimney has ...

The CFPB and the other members of the Federal Financial Institutions Examination Council last week issued new examiner transaction testing guidelines for all financial institutions that report under the Home Mortgage Disclosure Act. The rules will apply to the examination of HMDA data collected starting in 2018 and reported beginning in 2019. The guidelines eliminate the file-error resubmission threshold under which a financial institution would have to correct and resubmit its entire Loan Application Register (LAR) if the total number of sample files with at least one error reached or exceeded a certain threshold, the bureau said. They also establish allowable tolerances for certain data fields for the purpose of counting errors toward the field-error resubmission threshold.Additionally, they provide ...

Campaign for Accountability, a self-styled watchdog organization, recently filed a Freedom of Information Act request with the CFPB to find out what actions the agency has taken to hold Clayton Homes and its mortgage lending subsidiary, Vanderbilt Mortgage, accountable for alleged predatory lending practices.Clayton Homes, based in Maryville, TN, is one of the nation’s largest mobile home sellers, and is owned by Warren Buffett’s Berkshire Hathaway. Said Campaign for Accountability Executive Director Daniel Stevens: “Clayton Homes appears to have been preying on some of our most vulnerable citizens. As the company expands its footprint to reach more Americans, it is imperative to know whether the government found any wrongdoing and, if so, what actions were taken.” The watchdog group...

There may be plenty of uncertainty about the direction of the CFPB these days, given that Republicans are calling the shots on Capitol Hill and at the White House, plus the fact that Richard Cordray’s days as director of the bureau are numbered, regardless of when he actually ends up departing. Still, mortgage servicers can continue to expect robust supervision and regulation – and enforcement –if not from the bureau, then from another federal regulator, as well the states, and maybe all of the above, according to Steven Frie and Mark Shannon, top servicer analysts at S&P Global Ratings. “It’s been pretty common knowledge that the CFPB has been very active in regards to regulating the mortgage servicing industry,” Frie said ...

The CFPB recently filed a complaint and a proposed settlement against what’s left of Aequitas Capital Management and related entities, all of which are based in Lake Oswego, OR, accusing the firms of aiding the allegedly predatory lending behavior of Corinthian Colleges, now defunct. The complaint against Aequitas and its affiliates was filed in U.S. District Court, District of Oregon, Portland Division.“The bureau brings this action against Aequitas for its abusive acts and practices in connection with private loans made to students at Corinthian Colleges, which were funded or purchased by Aequitas,” the CFPB said. “By funding these private loans, Aequitas enabled Corinthian to present a façade of compliance with federal laws requiring that a certain portion of a ...