Mortgage Industry Waits for PHH Shoe to Drop. The mortgage industry is awaiting a final ruling from the U.S. Court of Appeals for the District of Columbia Circuit in the case of PHH Corp. v. Consumer Financial Protection Bureau, No. 15-cv-01177.

The Consumer Financial Protection Bureau last week released its proposed rule to clarify a number of issues related to its integrated disclosure rule known as TRID – and perhaps the single most significant aspect of the proposal for mortgage investors is what it does not include: any additional provisions to cure loan errors. Some observers believe that could be a negative for the secondary market. On the other hand, the bureau did provide...

There’s more than $50.0 billion in capital ready to acquire new nonprime home loans, including non-qualified mortgages, according to Dan Perl, chairman and CEO of Citadel Servicing, a nonprime lender. “Liquidity is abundant,” he said last week at the California Mortgage Bankers Association’s Western Secondary Market Conference in San Francisco. “There is a ready market for this and I couldn’t say that two years ago.” William Pendleton, a senior vice president of portfolio lending at Caliber Home Loans, said...

More unsealed documents were released this week during the discovery process in a GSE shareholder case in the U.S. Court of Federal Claims. The eight documents ranged from an excerpt of former White House housing policy expert Jim Parrott’s deposition from January,to presentations from the Federal Housing Finance Agency in 2008 to several memos dating back to 2008 and 2012. In the two-page Parrott deposition excerpt, he said that the net worth sweep was a “Treasury-driven process,” when asked why he didn’t reach out to anyone on Capitol Hill about the plan. He added that to the degree there was outreach to Congress, it would have come from Treasury, not him.

The Consumer Financial Protection Bureau is not proposing any additional cure provisions in its proposed rule to update and clarify certain aspects of its Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure rule, known as TRID. The TRID 2.0 proposed rule was released late last week. Former CFPB official Quyen Truong, now a partner in the Washington, DC, office of the Stroock & Stroock & Lavan LLP law firm, told...

Nonbank jumbo originators may soon find themselves at a pricing disadvantage to depositories thanks to recent events beyond their control: two jumbo conduits calling it quits and updated regulatory language that offers no comfort when it comes to curing “TRID” errors. Industry veteran Bill Dallas, who runs nonbank lender Skyline Home Loans, Calabasas, CA, put it bluntly, saying: “Banks appear to be the big jumbo winners – Union Bank and others.” He said jumbo production is a low-margin business but a necessity in California. The CEO noted...

The Federal Housing Finance Agency so far has resisted calls to lower guaranty fees charged by Fannie Mae and Freddie Mac and quietly set a “minimum base guaranty fee” for the two government-sponsored enterprises. The FHFA directive was revealed in the 10-Q filings issued by the two GSEs this week accompanying second-quarter financial results that showed a combined $3.94 billion in net income. Their Securities and Exchange Commission filings, however, provided little detail about what the minimum base fee is. “In July 2016,” Fannie’s 10-Q states...

Banks that participate in third-party lending, including mortgage originations, would be subject to greater scrutiny, according to proposed examination guidance issued late last week by the Federal Deposit Insurance Corp. The FDIC said third-party lending is an arrangement that relies on a third party to perform a significant aspect of the origination process, including marketing, borrower solicitation, underwriting, loan pricing, loan origination, customer service, consumer disclosures, regulatory compliance, servicing, debt collection, and data collection, aggregation or reporting. An agency spokesperson said...

When rates plunge at the end of a given quarter – as they did in June – it usually translates into large hedging losses for Fannie Mae and Freddie Mac. But this time around, there seems to be less chatter about the topic – and a reduced level of anxiety. Next week, both government-sponsored enterprises will release second-quarter results and all eyes will be on the line item that reveals the net gain or loss from their derivatives, the instruments the two use to hedge their MBS positions. In the first quarter of this year, Freddie posted...

Look for the Federal Reserve to repeat last year’s performance and raise interest rates one quarter of one percent in December, according to some supporters and critics of the U.S. central bank, enabling the Fed to say it did, in fact, lift interest rates this year. During its meeting in Washington, DC, this week, the Fed once again, as expected, opted to hold rates unchanged and did not tip its hand about a future move, although some market participants came away with the impression an increase in September is a little more likely than had been the case after the central bank’s last meeting. The Federal Reserve’s Open Market Committee last raised...