With November’s election potentially unraveling key features of the financial regulatory structure instituted over the past eight years, experts say it’s time for policymakers to figure out what’s working and what needs to be fixed. During a panel session hosted by the Bipartisan Policy Center, Richard Berner, director of the Office of Financial Research, said that more information is needed about liquidity because a lack of it is often cited as one of the unintended consequences of regulation. “Market liquidity is...

Defects in mortgage loans produced under the Consumer Financial Protection Bureau’s integrated disclosure rule fell modestly in the second quarter of 2016, after peaking in the first three months of the year. This is the first such drop since the TRID rule took effect in October 2015, according to a new quality control analysis from ARMCO, a risk management technology vendor. “TRID-related defects continue to be the leading area of concern in post-closing reviews; however ...

Comments made by Treasury Secretary Designate Steven Mnuchin about privatizing Fannie Mae and Freddie Mac caused much speculation around Washington last week. But analysts predict that privatization in the near term is unlikely. Mnuchin criticized the fact that the GSEs have been in conservatorship this long. During a cable television interview he said, “We’ve got to get Fannie and Freddie out of government ownership,” adding that it often displaces private lending in the mortgage markets. “So let me just be clear. We’ll make sure that when they’re restructured they’ll be safer and they won’t get taken over again, but we’ve got to get them out of government control.”

Although the common stock of Fannie Mae and Freddie Mac has been deemed near worthless by stock analysts (and others), the share price of the two has been on a tear of late thanks to comments made two weeks ago by investment banker Steven Mnuchin, President-elect Donald Trump’s pick to head the Treasury Department. As Inside The GSEs went to press this week, Fannie common was trading at just $4.00 a share, Freddie at $3.90. And while that might not seem like much, it represents a stunning 166 percent gain since right before the November election. Mnuchin set the stocks in orbit when he said during a cable TV interview that resolving...

If lenders evaluated borrowers more “holistically” and put less emphasis on credit scores, the share of minorities receiving purchase mortgages could increase significantly, according to analysts at the Urban Institute’s Housing Finance Policy Center. Laurie Goodman, director of the HFPC, and Alanna McCargo, the co-director, noted that some 70.0 percent of purchase mortgages originated in 2015 went to white borrowers. They suggested that the disparate impact of tight credit is ...

The one weak spot in the mortgage market during the third quarter was in traditional jumbo originations, a trend that was reinforced by a significant increase in production of agency mortgages in high-cost markets that exceeded $417,000. An estimated $101.0 billion of non-agency jumbo home loans were originated during the third quarter, down 1.9 percent from the previous quarter. At the same time, production of conforming-jumbo mortgages – loans greater than $417,000 that were securitized by Fannie Mae, Freddie Mac and Ginnie Mae – jumped 27.7 percent from the second to the third quarter. Some of the disparity is...[Includes three data tables]

Despite higher interest rates, publicly traded mortgage stocks have been rising since the election, but market watchers are cautious that recent gains could evaporate quickly. “Two things are going on here,” said Henry Coffey, an equities analyst at Wedbush Securities. “We’ve had a massive market rally, especially in financial stocks. But the general consensus is that the new administration is going to be less punitive than the current one.” Coffey added...[Includes one data table]

During his successful campaign for the White House, then-candidate Donald Trump won applause and support from the business community for his promise to substantially cut back on federal regulations. Many in the mortgage lending community had hopes the plan would include some relief from the mortgage regulations issued by the Consumer Financial Protection Bureau. Among other things, Trump said he would issue a temporary moratorium on “new agency regulations that are not compelled by Congress or public safety [and] cancel immediately all illegal and overreaching executive orders.” Richard Horn, who worked on the CFPB’s integrated-disclosure rulemaking known as TRID, said...

The DC Circuit Court of Appeals recently ordered PHH Corp. to respond to the Consumer Financial Protection Bureau’s petition for an en banc rehearing in the long-running dispute over alleged violations of the Real Estate Settlement Procedures Act. The lender’s response is due late this week. The court has also invited the U.S. solicitor general to weigh in on the constitutional and RESPA questions associated with the case. No timetable was suggested. However, industry legal observers expect the USSG to respond promptly, given the pending change of presidential administrations, and to support the bureau’s positions. Attorneys at the BuckleySandler law firm noted...

Shortly after being nominated by President-elect Donald Trump to be his Treasury secretary, investment banker Steve Mnuchin midweek dropped a bombshell on the mortgage market: Ending the conservatorships of Fannie Mae and Freddie Mac would be a top priority. For the most part, the mortgage industry cheered the news, believing that at the very least, Mnuchin would preserve the federal guaranty on existing MBS and into the future. In fact, the market seems to be betting on it. But now comes...