The Mortgage Bankers Association is on a mission to convince banking regulators to revisit the Basel III capital standards and to change the cap on how much mortgage servicing rights can count toward Tier I capital. The way things stand now, MSRs will be capped at 10 percent of capital when the rule is fully phased in, with the excess deducted from a depository’s “common equity.” Previously, the cap was 100 percent. In a draft letter to the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency, the MBA argues...

Attorneys for disenfranchised GSE shareholders have already filed a notice to appeal this week’s surprise dismissal by a Washington, DC, federal judge of the lawsuits challenging the Treasury Department’s 2012 “net-worth sweep” of nearly all profits generated by Fannie Mae and Freddie Mac. However, a legal expert notes that the ruling by Judge Royce Lamberth of the U.S. District Court for the District of Columbia makes a tall order even taller for investors taking on the government.

Mortgage lenders originated an estimated $17 billion in new home-equity loans during the second quarter of 2014, a 30.8 percent increase from the previous period, according to a new market analysis and ranking by Inside Mortgage Finance. But the volume of outstanding home-equity lines of credit and closed-end second mortgages held in portfolio by depository institutions – the biggest players in the HEL market – continued to dwindle. Banks, thrifts and credit unions reported a total of $540.4 billion of HELOCs on their books at the end of June, down 0.9 percent from March, along with a 1.5 percent drop in closed-end seconds. It continued...[Includes three data charts]

In a surprise ruling this week, a federal judge in Washington, DC, dismissed claims by Fannie Mae and Freddie Mac shareholders challenging the Treasury Department’s 2012 “net-worth sweep” of nearly all the profits generated by the government-sponsored enterprises. Judge Royce Lamberth of the U.S. District Court for the District of Columbia ruled that Treasury and the Federal Housing Finance Agency are empowered by the Housing and Economic Recovery Act of 2008 to execute the “third amendment” of the preferred stock purchase agreement. The dismissal includes...

The vast majority of community banks plan to continue to offer mortgages even though increased regulation is limiting business, according to a survey conducted by the Conference of State Bank Supervisors. Rules from the Consumer Financial Protection Bureau remain a primary concern, although many community banks already offer loans outside of the standards for qualified mortgages. “Banks continue to see opportunity in residential mortgage lending but have a mixed view of non-QM lending,” according to the report jointly compiled with the Federal Reserve. “Assessing the ability to repay and QM standards against current exposures, bankers generally identified a low level of nonconformance, suggesting the rules may generally be in line with bank practices while still requiring significant changes in operations.” Some 64 percent of the 884 community banks surveyed said...

The mortgage industry has about a month left to officially weigh in on the CFPB’s pending Home Mortgage Disclosure Act proposed rule, and a top official at the bureau urged lenders to raise important issues now. “Because we’re opening HMDA up, we’re taking the opportunity to try to streamline the reporting process for you,” said Kathleen Ryan, deputy assistant director in the CFPB’s Office of Regulations, in comments before the Mortgage Bankers Association’s regulatory compliance conference on Monday. The bureau also is looking “for ways to ease some of the pain around geocoding and these other ‘translation’ issues that you have in your reporting systems by trying to align to the extent possible” with existing industry standards for data points ...

The CFPB issued its long-awaited proposed rule to define larger participants in the auto finance sector –as well as its underlying proxy methodology – to a decidedly mixed reaction from rival sectors of the financial services industry. Bill Himpler, executive vice president of the American Financial Services Association, said his organization remains concerned that the bureau continues to issue larger participant rules that capture market participants “that, for lack of a better term, are not large by any stretch of the imagination. “Many of the market players that will be subject to the proposed rule have well below 1 percent of market share,” he added. Citing data from Experian, Himpler said that companies below the top 30 have less than a ...

Joint supervisory examinations by the CFPB and the Office of the Comptroller of the Currency have led an enforcement action that will require U.S. Bank to pay $57 million to settle allegations it illegally charged for “add-on” products, harming more than 420,000 consumers. The government agencies accused U.S. Bank, headquartered in Minneapolis, of unfairly charging consumers for certain identity protection and credit monitoring services that they did not receive. These services were sold as “add-on products” for credit cards and other bank products, such as mortgage loans and checking accounts. Part of the problem could have been a breakdown in vendor management, which is an area of increasing importance to the CFPB. According to the findings contained in the consent ...

In a case that highlights the sensitivity of personal financial information and the firms that trade in it, the CFPB convinced a federal judge last week to freeze the assets of the Hydra Group, an online payday lender, and to put a receiver in place to stop an alleged illegal “cash-grab scam” at the business.According to the bureau, the Hydra Group used information purchased from online lead generators to access consumers’ checking accounts to illegally deposit payday loans – usually $200 to $300 – and withdraw fees ranging from $60 to $90 without consent. The organization then allegedly used falsified loan documents to claim that the consumers had agreed to the phony online payday loans. The CFPB’s lawsuit alleges that Richard ...

Corinthian Colleges accused the CFPB earlier this month of wrongly disparaging the career services assistance the for-profit company offers and of mischaracterizing both the purpose and practices of its “Genesis” lending program. The CFPB filed a lawsuit against the company earlier this month. In a statement provided to Inside the CFPB, Corinthian Colleges said the bureau’s complaint ignores “clear, easily obtainable evidence” that thousands of its graduates are hired into permanent positions by large and small employers across the U.S. every year. Instead, the complaint cites isolated incidents at Corinthian’s 97 U.S. campuses that violated company policy regarding job placement policies, the firm added. “The CFPB is aware of these cases because Corinthian identified the issues, took strong action to ...