The Financial Services Roundtable advised the Trump administration that the structure of the CFPB needs to be changed, and that the agency should revise a handful of its key mortgage rulemakings, most notably the ability-to-repay/qualified mortgage rule, the Home Mortgage Disclosure Act rule and the Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure rule, or TRID. The FSR’s call came in a detailed response to President Trump’s Executive Order 13777, “Reducing Regulation and Controlling Regulatory Costs,” issued earlier this year, directing the Treasury Department to conduct an assessment of financial regulations to evaluate how they align with the White House’s core principles of financial regulation.In terms of the bureau itself, the industry organization said the governance structure ...

The CFPB has stepped back into the Real Estate Settlement Procedures Act enforcement ring by probing Zillow over issues related to co-marketing. The probe of the company’s co-marketing initiative was disclosed to the public earlier this month by Zillow CFO Kathleen Philips during the company’s first quarter earnings conference call with investors. “Over the past two years, the CFPB has been reviewing our program for compliance with RESPA,” Philips said. “Recently, the CFPB requested additional information and documents from us as part of their evaluation, which we are working with them on,” she added. “We believe our co-marketing program has, and continues to, allow agents and lenders to comply with the law while using our product.” This could be another ...

Treasury Eyeballing CFPB Rules as Part of Regulatory Relief Review. The Treasury Department is focused on a wide range of regulatory requirements where simple communication and clarification of the regulatory intent is warranted, such as the CFPB’s ability-to-repay rule, the integrated disclosure rule and the Home Mortgage Disclosure Act rule, Craig Phillips, counselor to the Treasury secretary, said during a symposium in New York City last week, according to Inside Mortgage Finance.... Dodd-Frank Changes to be Discussed. House Financial Services Committee Chairman Jeb Hensarling, R-TX, is scheduled to discuss his Dodd-Frank Act alternative, H.R. 10, the Financial CHOICE Act, Tuesday of this week at an event at the American Enterprise Institute....

The average daily trading volume in agency MBS totaled $195.7 billion in April, the lowest reading of the year and third worst over the past 12 months, according to figures compiled by the Securities Industry and Financial Markets Association. The low trading volume is an indication that liquidity is drying up, but it also reflects a decline in new agency MBS being created. According to figures recently compiled by Inside MBS & ABS, lenders issued...

President Trump’s tax plan would raise the federal debt, but could benefit residential MBS, consumer ABS and asset-backed commercial paper, depending mostly on the effect on the underlying obligors’ after-tax income, according to a recent research report from Moody’s Investors Service. “The administration’s blueprint proposes a reduction in the corporate tax rate to 15 percent from 35 percent, which would also apply to partnerships and other ‘pass-through’ businesses that are currently taxed through their principals’ individual returns,” analysts explained. The White House plan also features...

The latest twist in the Consumer Financial Protection Bureau’s enforcement of the Real Estate Settlement Procedures Act involves certain co-marketing activities. It has recently come to light that the CFPB is investigating Zillow for possible RESPA violations apparently having to do with the firm’s practice of co-marketing with loan officers, real estate agents and mortgage lenders. “For years, many industry participants wondered if allowing their real estate agents or loan officers to engage in co-marketing on Zillow Group applications and websites posed a risk to their companies under RESPA. The industry may soon know the answer,” Richard Andreano, a partner at the Ballard Spahr law firm in Washington, DC, noted in a recent online blog post. Andreano’s post cited...

For the most part, several different factions of the mortgage industry have applauded the move by the Federal Housing Finance Agency to allow Fannie Mae and Freddie Mac to build some type of capital buffer. Now comes the hard part: the details. Early this week, FHFA Acting Deputy Director of the Division of Conservatorship Bob Ryan said in a speech that the capital buffer plan would entail a delay of dividend payments to the U.S. Treasury Department – not an elimination of them. No other specifics were provided...

Craig Phillips, counselor to the Treasury secretary, recently spoke about the importance of credit-risk transfers, the role of private capital in the mortgage market and burdensome regulations. During a credit-risk transfer symposium in New York City earlier this week, he said it’s important to grow participation in the government-sponsored enterprises’ CRT programs. “Every dollar of risk today is a dollar less of taxpayer risk,” said Phillips. “In my view we should continue...

Federal Housing Finance Agency Director Mel Watt is prepared to allow Fannie Mae and Freddie Mac to build some type of capital buffer to avoid a Treasury draw that could weaken investor confidence. But some lawmakers vehemently disagreed with his views during a hearing in the Senate Banking, Housing and Urban Affairs Committee this week. Watt reiterated his concern about the declining capital buffer, which is scheduled to reach zero by 2018 under the preferred stock purchase agreements that set the terms of the conservatorships of the two government-sponsored enterprises. With no capital buffer, Fannie and Freddie would be forced...

Impac Mortgage Holdings has significantly increased its originations of non-qualified mortgages and plans to package the loans into non-agency mortgage-backed securities. The nonbank originated $184.3 million of non-QMs in the first quarter of 2017, up from $86.3 million in the previous period. In all of 2016, Impac originated $289.6 million in non-QMs. The product accounted for 11.6 percent of Impac’s originations in the first quarter, up from a 2.8 percent share the previous period ...