In the continuing wake of industry concerns about the TRID disclosure rule and worries about large retroactive fines, the Community Home Lenders Association says the CFPB should provide more balanced regulatory and enforcement policies toward smaller nonbank mortgage lenders and improve compliance guidance and due process. Asserting that nonbank mortgage lenders, including community-based lenders, have recently “led the way” in providing access to mortgage credit and providing more personalized loan servicing, the CHLA said “any regulatory policies that have the effect of imposing a disproportionate compliance burden on smaller lender/servicers can accelerate industry consolidation – which in turn can result in fewer consumer choices and less personalized service.” The trade group had three main recommendations for the bureau, the first of ...

A handful of recent surveys of borrowers taking out a mortgage to purchase a home in the new era of the CFPB’s integrated disclosure suggest that borrowers are generally benefiting from the new forms and having a more positive experience with the entire process. Attorney Richard Horn, a former bureau official who was intimately involved in developing the new rule, is pleased to see confirmation that borrowers are getting the kind of benefit from the rule that he and his colleagues at the agency hoped they would. “From my experience, from having led the consumer testing for the disclosures and even the final rule, I do think it’s possible that these surveys are accurate and that consumers are experiencing the ...

The CFPB should consider increasing the asset threshold limit to be considered a “small creditor” under its ability-to-repay/qualified mortgage rule, from $2 billion to $10 billion, so that more small lenders may take advantage of the regulatory relief a recent interim final rule provides, according to the American Bankers Association. The interim final rule, which was issued March 25, 2016, expanded the availability of certain special provisions for small lenders operating in rural or underserved areas. The proposal amends some of the definitions in the ATR rule, as per the Helping Expand Lending Practices in Rural Communities Act of 2015, which was enacted Dec. 4, 2015. Under the interim rule, small creditors – or banks that made no more than 2,000 ...

Mortgage Warehouse Volume at Horizon Bancorp Declines in First Quarter, TRID Remains an Issue. Horizon Bancorp announced recently that its mortgage warehouse lending efforts were down in the first quarter of 2016. The bank had $119.88 million in mortgage warehouse loans on its balance sheet at the end of the first quarter of 2016, down 17.2 percent from the previous quarter and down 33.0 percent from the first quarter of 2015.... Flagstar Boosts Originations and Income in 1Q16, Is Comfortable with TRID. Flagstar Bancorp reported an increase in originations and net income for the first quarter of 2016 with company executives noting that the bank is comfortable with the TRID mortgage disclosure requirements...

A lack of formal guidance from the Consumer Financial Protection Bureau regarding TRID mortgage disclosures won’t prevent rating services from placing ratings on new non-agency MBS. The rating services are even willing to rate new deals before the Structured Finance Industry Group releases standards for the handling of TRID issues by third-party due diligence firms. However, issuers and investors appear to be less comfortable with liability from the rule the CFPB implemented in October combining the disclosure requirements of the Truth in Lending Act and the Real Estate Settlement Procedures Act. Save for a $331.95 million jumbo MBS issued by Two Harbors Investment at the end of March, no firm has issued a deal that includes loans subject to TRID. On March 18, SFIG proposed...

Mortgage trading desks the past few months have seen a noticeable increase in whole loan trading tied to seasoned Fannie Mae and Freddie Mac loans, according to traders interviewed this week by Inside MBS & ABS. Jason Eisendrath, director of loan sale strategies for Mortgage Delivery Specialists, said the sellers include not only money-center banks, but credit unions. “The credit unions, in particular, are holding a lot of [government-sponsored enterprise] paper,” he said. MDS is a part of Mortgage Industry Advisory Corp., New York. It’s...

The alternatives to credit ratings mandated by the Dodd-Frank Act aimed to address contributors to the financial crisis have their own challenges, according to a new report from the Treasury Department’s Office of Financial Research. John Soroushian, a research analyst for policy studies at the OFR, noted that before the financial crisis, rating services had an incentive to inflate ratings for MBS, ABS and other investments to expand their business. He said rating services were “key enablers” in the creation of MBS and collateralized-debt obligations. “Without ratings, it would have been...

The Federal Reserve Open Market Committee concluded its regularly scheduled meeting earlier this week and, to no one’s surprise, decided yet again to keep its interest rate powder dry for the time being. The people who parse FOMC statements for a living derived some nuanced significance from a few wording changes, but are split on whether and when there will be an increase this year. The Fed noted that labor market conditions have improved further even as growth in economic activity appears to have slowed. “Growth in household spending has moderated, although households’ real income has risen at a solid rate and consumer sentiment remains high,” said the U.S. central bank. “Since the beginning of the year, the housing sector has improved further but business fixed investment and net exports have been soft.” Meanwhile, inflation has continued...

Thanks to a resurgence of deals backed by vehicle-related financing, non-mortgage ABS production rebounded strongly in the first three months of 2016, according to a new Inside MBS & ABS analysis and ranking. But ABS issuance levels came up well short of the volume generated during the first three months of last year, and a few key segments continued to limp along. A total of $41.42 billion of non-mortgage ABS were issued...[Includes two data tables]

The average daily trading volume in agency MBS fell to $189.4 billion in March, the lowest reading of the year, and a sign that liquidity may still be an issue, depending on which seat you’re in. According to figures compiled by the Securities Industry and Financial Markets Association, the trading numbers for 2016, so far, haven’t exactly lit the world on fire. In January and February, the readings were $195.1 billion and $201.4 billion, respectively. Last year, the best reading was...