With the White House budget delayed until sometime in March, there is renewed speculation that the Department of Housing and Urban Development will not ask for a draw from the Treasury Department to bolster the cash-starved Mutual Mortgage Insurance Fund of the FHA. In testimony this week before the House Financial Services Committee FHA Commissioner Carol Galante said underwriting changes and premium hikes have decreased the likelihood that the MMI will request additional cash. But she could not say for certain, noting that if a draw is needed it will not come until the end of fiscal 2013. Mortgage insurance professionals and consulting firms that work on HUD issues have estimated...
The federal prudential banking regulators should work closely with the CFPB in areas where their responsibilities overlap, such as credit card supervision and fair lending laws, Comptroller of the Currency Thomas Curry told attendees at the recent Federal Financial Institutions Examination Councils Consumer Compliance Specialists Conference in Washington, DC. In the area of overlapping supervisory responsibilities, one example that springs to mind involves credit cards, Curry said. In the new world being fashioned by the...
Federal regulators suggest that a number of changes are under consideration for risk-retention requirements initially proposed in 2011. Two changes under consideration include a revision of the qualified residential mortgage definition and a possible alternative to the controversial proposed premium capture cash reserve account. Katherine Hsu, chief of the office of structured finance in the division of corporation finance at the Securities and Exchange Commission, said federal regulators are considering changing the proposed definition for QRMs due to the recent ability-to-repay rule from the Consumer Financial Protection Bureau that set requirements for qualified mortgages. The QRM standards cannot be any more broad than the QM standards. Speaking at the American Securitization Forums ASF 2013 conference last week in Las Vegas, Hsu also stressed...
The presence of the to-be-announced market provides greater liquidity to the agency MBS sector, according to a recent study by the Federal Reserve Bank of New York. The study, TBA Trading and Liquidity in the Agency MBS Market, presents evidence on the liquidity of the TBA market during the financial crisis period. Its analysis also yields preliminary evidence that the liquidity of the TBA market raises MBS prices and lowers mortgage interest rates. Authors James Vickery and Joshua Wright said...
The investment period for the remaining funds participating in the Public-Private Investment Program ended during the fourth quarter of 2012, with four funds exiting the program during that time. The Treasury Department said it earned a profit from the PPIP, which focused on investment in non-agency mortgage-backed securities, and most of the individual funds also turned significant profits. Our ability to aid in the stability of the MBS market and deliver solid investment ... [Includes one data chart]
Obama administration officials continue to claim that the administration is working toward a program to refinance or modify non-agency loans for borrowers with negative equity. Support in Congress for such a program is largely limited to Democrats, with the Obama administration suggesting that a non-legislative solution could be implemented. We must expand streamline refinancing to families whose loans are not guaranteed by the government, Michael Stegman, counselor to the Treasury ...
HARP 3.0 Status Update: Democrats in both the Senate and the White House are warming up efforts to expand government-backed refinance programs in order to assist underwater homeowners whose mortgages are packaged into non-agency securities. Repurposed refi proposals from last year are poised to be re-introduced in the 113th Congress with the active and vocal support of the Treasury Department, which may enact its own initiative if lawmakers cant or wont pass a measure. We must expand...
A number of mortgage industry experts share the view that a dark cloud has been cast over President Obamas recess appointment of Richard Cordray as director of the Consumer Financial Protection Bureau, after an appeals court ruled late last week that other recess appointments the president made at the same time were unconstitutional. The significance of this decision cannot be overstated as it raises a host of questions about the potential impact of a judicial ruling that Mr. Cordrays recess appointment was similarly invalid, said Barbara Mishkin, of counsel with the law firm of Ballard Spahr. Edward Mills, a financial policy analyst at FBR Capital Markets, said...
The CFPB has responded to a variety of mortgage appraisal issues on two different fronts, publishing a final rule all its own in conjunction with the Equal Credit Opportunity Act, and participating in an interagency rulemaking in the context of the Truth in Lending Act. On the ECOA front, the bureau issued a final rule that requires mortgage lenders to provide applicants with free copies of all appraisals and other home-value estimates, although a lender generally may still charge the consumer a reasonable fee for the cost of conducting the appraisal or other estimate. In essence, then, a lender can charge...
The Consumer Financial Protection Bureau followed another mandate from the Dodd-Frank Act late last week, promulgating a final rule that requires mortgage lenders to provide applicants with free copies of all appraisals and other home-value estimates, and to inform consumers within three days of receiving an application for a loan of their right to receive copies of all appraisals. An applicant may waive the timing requirement for providing these copies, but must be given a copy of all appraisals and other written valuations at or prior to closing or account opening or, if the transaction is not consummated, within 30 days after the creditor makes a decision. While the rule prohibits...