Any respite the mortgage industry had from enforcement actions under the Real Estate Settlement Procedures Act is over. If there’s one overarching theme about the Consumer Financial Protection Bureau’s vigorous RESPA activity of late, it’s that the basics still count when it comes to compliance, even as the bureau pushes the theoretical envelope in some instances, top industry attorneys say. “RESPA Section 8 enforcement is back. It was in abeyance during the transition of RESPA enforcement from the Department of Housing and Urban Development to the CFPB over the last few years,” said attorney Angela Kleine, an associate in the San Francisco office of the Morrison & Foerster law firm. “But the CFPB is picking up where HUD left off, and then some.” Kleine said...

Loss mitigation activity continued to decline in the first quarter of 2014, driven by better loan performance. That didn’t stop the Treasury Department from extending the Home Affordable Modification Program and related loss mitigation programs for at least another year, through the end of 2016. A total of 132,783 loan modifications were completed in the first quarter, according to Hope Now, down 3.4 percent from the previous quarter and down 45.7 percent from the first quarter of 2013. On a monthly basis, loan mod activity continued to decline in April. Loan mod activity is...

The Treasury Department announced late last week that it is working to develop market practices and standards that would be necessary “to support a safe and sustainable non-agency MBS housing finance channel of significant scale.” As part of the effort, the Treasury posed nine questions to industry participants and is accepting comments on the issue until Aug. 8. Michael Stegman, counselor to the Treasury for housing finance policy, said regulators have addressed most of the problems seen in the non-agency MBS market before the financial crisis. “The last remaining piece of the puzzle is putting in place standards and mechanisms to protect investors in residential MBS, while also clearly defining issuer responsibilities so that they have the confidence to return to the market at scale,” he said. Regulators may have “addressed”...

MBS prices have been hovering around their highs for the year and could stay that way through the fall with minor corrections occurring along the way. “Prices have risen even on the good economic news,” said Joe Farr, director of sales and marketing for MBSQuoteline. “But they fell by about 1 percent over the past week.” Recently, when the Consumer Price Index rose, there was...

The credit quality of the collateral backing the most active types of structured finance securities is slipping, but remains above pre-credit crisis levels, according to Moody’s Investors Service. In a report issued last week, Moody’s cited several trends that signal the potential for higher credit risk, but the rating service said that many sponsors are building in subordination levels and other structural features that result in higher credit quality. “The degree of weaker underwriting and collateral quality in structured transactions varies...

The FHA is seeking comment on two new sections of a proposed single-family handbook for mortgage lenders. The handbook is in development. Once completed, it will serve as the centralized source of current and future FHA policies. Agency staff is collating policies from several handbooks, rules, mortgagee letters, notices and other sources to incorporate into the handbook. The FHA is publishing two new sections, “Doing Business with FHA – FHA Lenders and Mortgagees” and “Quality Control, Oversight and Compliance,” for comment. The “Doing Business” section lays out the requirements for FHA lender approval, including eligibility requirements, application processes, operating requirements and post-approval changes. The section also contains the recertification process as well as processes for applying for ...

The issue of eminent domain is rearing its head again, compelling mortgage and securitization industry groups to once more mobilize their resources to deep-six the latest initiatives. The most recent manifestation of a resurgent interest in eminent domain is in California, where John Avalos, a member of the San Francisco Board of Supervisors, has sponsored a resolution seeking to enter the city into a joint powers authority agreement with Richmond, CA, a vehicle by which both cities could seize underwater but performing mortgages using eminent domain. Avalos’ resolution targets...

Secondary mortgage market participants generally support the Consumer Financial Protection Bureau’s proposed “right to cure” a mortgage that inadvertently breaches the qualified mortgage 3 percent points-and-fees cap – but they want to see it made more assignee-friendly. Earlier this year, the CFPB proposed allowing a limited cure for a points-and-fee violation if the creditor in good faith intended to originate the loan as a QM under the bureau’s ability-to-repay rule and the loan otherwise meets the requirements of a QM. A refund of the overage would have to be paid to the consumer and the party seeking to cure the violation (either creditor or assignee) would have to follow certain policies and procedures for post-consummation review of loans. In its comment letter to the CFPB, Fannie Mae suggested...

Even though the risk-sharing targets set for Fannie Mae and Freddie Mac have been all but met this year, expect the two government-sponsored enterprises to come to market with risk-sharing transactions at least once a quarter, with the likely result of both firms exceeding the 2014 target “by at least” $20 billion, predicted an analysis by Wells Fargo Securities. The FHFA’s 2014 Conservatorship Scorecard directs the GSEs to reduce taxpayers’ risks by increasing the role of private capital in the market via several strategies, including tripling the credit risk transfer goals to $90 billion in 2014 from $30 billion in 2013. Year-to-date, Fannie Mae’s Connecticut Avenue Securities program has already achieved...

Commercial banks and thrifts held $172.6 billion of non-mortgage ABS as of the end of the first quarter, a 10.2 percent drop from December 2013, according to a new Inside MBS & ABS analysis of call report data. The industry’s top ABS investor, TD Bank, increased...[Includes one data chart]