Multiple industry trade groups recently wrote to every member of the U.S. House of Representatives to enact legislation that would loosen up the points-and-fees cap under the CFPB’s ability-to-repay rule and its qualified mortgage standard. At issue is the bipartisan H.R. 1153, the Mortgage Choice Act (not to be confused with the far more comprehensive, and controversial, Financial CHOICE Act). H.R. 1153 was introduced in February by Reps. Bill Huizenga, R-MI, Ed Royce, R-CA, Steve Stivers, R-OH, and David Joyce, R-OH, along with Gregory Meeks, D-NY, David Scott, D-GA, and Mike Doyle, D-PA. H.R. 1153 would revise the Truth in Lending Act Section 103(bb)(4) definition of points and fees to foster greater consumer choice in mortgage and settlement services under ...

Nearly all of the securitized loans which failed to meet qualified-mortgage standards that took effect in 2014 are holding up well, and the MBS credit enhancement should be enough to handle any problems that emerge in an economic downtown, according to a new report from DBRS. The credit rating service did an analysis of the collateral and performance trends associated with the 20 securitizations backed by substantial numbers of non-QM loans that have been ... [Includes one data chart]

Nearly a dozen industry trade groups sent a letter Tuesday to every member of the U.S. House of Representatives, urging them to support legislative changes to loosen up the points-and-fees cap associated with the qualified-mortgage standard. The legislative vehicle of choice is the bipartisan H.R. 1153, the Mortgage Choice Act (not to be confused with the far more comprehensive, and controversial, Financial CHOICE Act). The measure was introduced in February by ...

Republicans Take Issue With Fannie/Freddie QM Exemption. Some Congressional Republicans recently expressed concerns about the special treatment that loans eligible for sale to the government-sponsored enterprises currently enjoy under the CFPB’s qualified mortgage standards.... CFPB Updates HMDA Implementation Materials, Filing Instructions Guide. As part of its effort to support the industry’s adoption of the CFPB’s recently issued 2017 Home Mortgage Disclosure Act final rule, the bureau has updated the chart titled: Collection and Reporting of HMDA Information about Ethnicity and Race.... Other Federal Regulators Issue Designated Key HMDA Data Fields List. The Federal Reserve, the Federal Deposit Insurance Corp., and the Office of the Comptroller of the Currency last week jointly issued ...

A number of Republicans raised concerns last week about the exemption from qualified mortgage standards currently provided to mortgages eligible for sale to the government-sponsored enterprises. Loans must meet a number of standards to receive QM protections, including having a debt-to-income ratio below 43 percent. However, under the ability-to-repay rule from the Consumer Financial Protection Bureau that took effect in 2014, mortgages eligible for sale to Fannie Mae and Freddie Mac can receive QM status even if they have DTI ratios above 43 percent. The exemption is known as the “GSE patch.”

After the standards for qualified mortgages took effect in 2014, few state-regulated banks stopped offering non-QMs, according to a survey by the Conference of State Bank Supervisors. “Non-QM mortgage lending activity appears relatively stable despite the regulatory tumult,” the state regulators said. According to a CSBS survey of more than 600 banks, the share of respondents that don’t offer non-QMs changed from 23.8 percent in 2014 to 26.5 percent ... [Includes one brief]

A greater percentage of community banks are making mortgages this year than the year before, but the mortgage regulations from the CFPB continue to cause some smaller institutions to ditch that line of business, according to a new survey conducted by the Conference of State Bank Supervisors and the Federal Reserve System. Mortgage lending is still a prominent activity among the more than 600 community banks surveyed, with 1-4 family, fixed-rate lending identified by more than 80 percent of respondents as a product currently offered that would continue to be provided. “This is higher than the 76 percent reported last year and contrasts, to some extent, with the five percent of banks that last year planned to exit from or ...

Two of the most active originators of nonprime loans that don’t meet the qualified-mortgage test are working on new MBS deals, though market timing is a little uncertain at this point. Mike Fierman, managing partner of the Angel Oak Companies, said the Atlanta-based company has a transaction on the drawing board, but noted that the two recent hurricanes have slowed progress. “As a result … we are taking steps to re-verify the condition of all properties and are offering borrowers assistance if necessary,” said the managing partner. Fierman noted...

Nonprime lenders defended mortgages underwritten with borrowers’ bank statements after criticism of the loans by Fitch Ratings. Steven Schwalb, CEO of Angel Oak Home Loans, a nonprime lender that offers bank-statement mortgages, noted that the loans measure borrowers’ cash flow more precisely than the tax returns used for traditional income verification. “We’re comfortable with the risk of that borrower,” he added, during a panel discussion at the ABS East conference produced by Information Management Network last week in Miami Beach. Bank-statement mortgages account...

Redwood Trust made a couple of adjustments to its new jumbo mortgage-backed security between when presale reports were issued and when the deal closed. Among other changes, the size was reduced slightly due to uncertainty about the impact of damage from Hurricane Irma on certain properties. Redwood removed 12 mortgages from the loan pool, dropping the unpaid principal balance of the MBS from $316.49 million to $307.64 million, according to Moody’s Investors Service. Seven loans were dropped...