The CFPB Office of Inspector General recently initiated an evaluation of the bureau’s use of vendors to support its analysis of fair lending compliance, the OIG indicated in its latest work plan. The OIG begins by noting, among other responsibilities, the CFPB is charged with providing oversight and enforcement of federal laws intended to ensure the fair, equitable and nondiscriminatory access to credit. But what may surprise many in the industry is to learn that the agency relies on external vendors to help fulfill this responsibility. “Our objective is to assess whether the CFPB effectively mitigates the risk associated with the use of vendors to support fair lending analysis, particularly with respect to potential conflicts of interest,” said the OIG ...

Treasury Secretary nominee Steven Mnuchin’s recent comments that he’s not a fan of recapitalizing and releasing Fannie Mae and Freddie Mac and wants to find a “bipartisan solution” to GSE reform has caused speculation about what reform will look like under the Trump administration.The comments, made during his Senate confirmation hearing last week, presented a softer take on housing reform than his earlier comments suggested. Shortly after being ...

Three of the nation’s most active nonprime mortgage originators – Citadel Loan Servicing, Angel Oak and Deephaven Mortgage – are all working on new MBS deals, a bullish sign for a market that has been mostly dormant for years. Executives at all three shops confirmed to Inside MBS & ABS this week their intention to bring new MBS to market – most likely through rated transactions. As for details, that’s a different matter. All three are...

Marketplace lenders could benefit from the development of special-purpose national bank charters for financial technology companies under consideration by the Office of the Comptroller of the Currency, according to ABS participants. However, the proposal has been met with strong opposition from state regulators, as it would preempt state oversight of certain nonbanks. In December, the OCC requested comments about a potential special-purpose national bank charter for so-called fintech companies, including marketplace lenders. The Structured Finance Industry Group endorsed...

The subprime auto lending market is stable and the underwriting is strong, but delinquencies are up, according to credit bureau experts speaking at the American Financial Services Association’s vehicle financing conference. The auto financing industry is coming off another record year of sales, according to Chris Stinebert, president and CEO of AFSA. He added that it’s important for credit reporting agencies to set the record straight on the health of the subprime auto finance market. “The fact is...

With the post-election interest-rate rise sticking around, there’s a growing school of thought that residential originators will finally ease underwriting standards in an effort to boost lending volume. But the way things stand today, that could be wishful thinking. The Mortgage Bankers Association told Inside Mortgage Finance this week that its Mortgage Credit Availability Index shows a “gradual” loosening has occurred, but it credits a greater availability of jumbo product for the reading. As MBA Senior Vice President of Research Michael Fratantoni put...

The new administration of President Trump wasted no time in trying to fulfill his campaign promise to roll back the tide of regulation, issuing on the day of his inauguration a freeze on new and pending regulations from executive agencies of the U.S. government. What effect this will have on mortgage lending regulation is unclear, at this point, but it’s likely to be temporary, industry insiders agree. According to a memo issued by White House Chief of Staff Reince Priebus, unspecified “executive departments and agencies” were...

Hedge fund manager Pershing Square Capital Management is facing a bit of a dilemma in regard to its huge investment in Fannie Mae and Freddie Mac common stock: take profits off the table now – while it still can – or go for broke, hoping for a huge payout later on. At last check, Pershing – the brainchild of veteran investor Bill Ackman – owned roughly 9.98 percent of Fannie and 9.77 percent of Freddie. It accumulated the shares earlier in the decade at an average price of $2.30 for Fannie and $2.14 for Freddie. Today, Fannie’s common trades...

The Consumer Financial Protection Bureau this week brought a relatively modest $28.8 million enforcement action against CitiFinancial Servicing and CitiMortgage to resolve allegations that struggling borrowers were kept in the dark about options available to save their homes. Under the terms of the consent order, CitiMortgage has to pay an estimated $17 million to compensate wronged consumers, along with a civil penalty of $3 million. The CFPB is also compelling CitiFinancial Services to refund approximately $4.4 million to consumers, and pay a civil penalty of $4.4 million. The bureau’s action related...

Prospects for a relatively speedy administrative solution to the eight-year-old conservatorship of Fannie Mae and Freddie Mac appeared to dim after Treasury Secretary-nominee Steve Mnuchin backtracked from earlier comments on swiftly addressing the plight of the two government-sponsored enterprises. During a Jan. 19 Senate confirmation hearing, Sen. Mark Warner, D-VA, asked Mnuchin if he supports a recapitalization-and-release plan for the GSEs, as several industry groups have proposed. “First, let’s be clear,” Mnuchin said. “My comments were...