Mortgage lenders’ efforts at compliance with post-financial crisis regulation, largely from the CFPB, shifted their focus from fully implementing e-mortgage processes but also helped them develop the necessary technology to move forward with them in the future, according to a new report from analysts at Moody’s Investors Service. “Following the crisis, lenders focused on adapting technology to implement regulations such as the ability-to-repay [qualified mortgage] rule and the TILA-RESPA Integrated Disclosure rule rather than on e-mortgages,” the analysts said. “The implementation of those regulations has, however, led to advancements in the technology needed to originate e-mortgages by providing, for example, a seamless data feed between the mortgage loan application and the disclosure documents.” Further, “Some lenders and servicers have also ...

Nationstar in the CFPB’s Crosshairs Over HMDA Reporting. Nationstar, the residential mortgage servicer, revealed recently it is being investigated by the CFPB over issues related to complying with the Home Mortgage Disclosure Act.... Non-Agency MBS Issuers Like the Legal Protection of the ATR. Congressional Republicans may be working on legislation to repeal and replace many regulations required by the Dodd-Frank Act, but some issuers of mortgage-backed securities are actually pushing to maintain some of the regulations.... Trump Executive Order on Regulatory Red Tape Unlikely to Apply to CFPB. Will the Bureau Comply Anyway? The executive order that President Trump signed in the middle of February that requires every federal agency to establish a regulatory reform task force to eliminate red tape probably does not apply to the CFPB, according to industry experts....

The government has until April 17 to prove that the 11,000 documents it is withholding are correctly labeled as “privileged.” This week, a ruling by Federal Claims Court Judge Margaret Sweeney ordered the government to review the documents and release those that are non-privileged to the plaintiff’s attorneys in Fairholme Funds Inc. et al., v. The United States. The order came on the heels of a January appeals court ruling that found the bulk of a batch of 56 documents the government refused to turn over to the plaintiff’s attorneys, after being ordered to do so last year, did not merit privilege treatment. They included various memos, emails and presentations from the Treasury, Federal Housing...

The U.S. banking industry is a steady, but not a huge, supporter of the non-mortgage-ABS market, accounting for 17.4 percent of the supply of ABS outstanding at the end of 2016, according to a new call-report analysis by Inside MBS & ABS. By comparison, banks and thrifts held about 26.5 percent of MBS outstanding at yearend. Although ABS issuance since the financial crisis has dwarfed production of non-agency MBS, the market still hasn’t fully recovered. The Securities Industry and Financial Markets Association reports that total ABS outstanding – not including collateralized debt obligations – declined by 0.3 percent during the fourth quarter to $712.1 billion. That’s still well below the total outstanding at the end of 2007, $899.8 billion. Commercial banks and thrifts reported...[Includes two data tables]

MBS are likely to be hurt when the Federal Reserve stops its reinvestments to shrink its balance sheet over the next few years, according to an analysis by Desjardins, Canada’s largest cooperative financial group. Even though the agency plans to withdraw gradually, its $1.75 trillion in MBS holdings account for approximately 20 percent of all U.S. MBS outstanding, noted Mathieu D’Anjou, senior economist with the Desjardins Group. “An increase in rate spreads between MBS and U.S. bonds, [which is] currently low, could be required...

Contrarians may suspect a bubble, but analysts at DBRS said in a new report this week that credit card loan balances in the U.S. reached a new post-financial-crisis high in December 2016, which they characterized as a reflection of consumers’ “gradual inclination to judiciously undertake incremental credit card debt.” According to their analysis, credit card debt accelerated last year. “After steadily increasing over the past five years, growth in credit card debt accelerated in 2016 at an average monthly, year-over-year growth rate of 6.1 percent, compared to 4.2 percent in 2015, and 2.9 percent in 2014,” DBRS said. Citing the Federal Reserve data for December 2016, the analysts found...

More than a dozen mortgage and housing groups are backing a House bill that would prevent guaranty fees on Fannie Mae and Freddie Mac mortgage-backed securities from being hijacked to pay for unrelated government spending. A joint trade group letter, signed by the Mortgage Bankers Association, Community Mortgage Lenders of America, the American Bankers Association, U.S. Mortgage Insurers and others, argues that tapping g-fees for other unrelated purposes imposes an “unjustified burden” on homeowners who would be forced to pay for the increase through higher monthly payments for the life of their loan. Our organizations were...

The Trump administration looks to be taking sides with a mortgage lender that says the configuration of the Consumer Financial Protection Bureau is unconstitutional. The government, through the Department of Justice and the Solicitor General, usually sides with government agencies in court cases. But in the closely watched lawsuit involving PHH Mortgage and the CFPB, it’s expected to oppose the bureau’s stance. This week, the U.S. Court of Appeals for the District of Columbia Circuit approved...

As the mortgage industry waits for a definitive resolution to the legal dispute between PHH Mortgage and the Consumer Financial Protection Bureau, industry experts tried to glean some guidance on the Real Estate Settlement Procedures Act from the bureau’s recent consent orders involving nonbank Prospect Mortgage and some of its partners. Earlier this year, the CFPB brought a $3.5 million enforcement action against Prospect, accusing the firm of illegal kickbacks for mortgage business referrals from two real estate brokers, and in an unusual twist, a mortgage servicing operation. The bureau also acted against ReMax Gold Coast and Keller Williams Mid-Willamette, the brokers, and Planet Home Lending, the mortgage servicer – all of whom it accused of taking illegal kickbacks from the lender. During a webinar this week sponsored by Inside Mortgage Finance, Rodrigo Alba, senior vice president of mortgage finance and senior regulatory counsel for the American Bankers Association, said...

After years of confusion among servicers and borrowers, the Internal Revenue Service is getting closer to issuing guidance about how servicers should report interest to the IRS on mortgages that receive significant loan modifications. The Mortgage Bankers Association and the American Bankers Association recently submitted a joint comment letter to the agency, which announced plans to issue guidance on the matter back in December 2015. The trade groups said...