Credit Suisse and MBIA Insurance Corp. continued their wrangling in New York state appellate court in a $235 million MBS securities lawsuit brought by the bond guarantor in 2009.

Correspondent-based lending operations are accounting for a growing share of the FHA and VA home loans pooled in Ginnie Mae mortgage-backed securities, according to a new analysis and ranking by Inside FHA/VA Lending. In fact, correspondent originations are the only production channel to see year-over-year growth in FHA and VA business through the first nine months of 2017. Retail and wholesale-broker production is down for both FHA and VA loans. Correspondent programs are most dominant in the FHA market, perhaps reflecting a preference among large producers to have recourse to a primary-market lender if the government later finds defects in how the loan was originated. Correspondents accounted for 48.7 percent of FHA loans pooled in Ginnie MBS during the first nine months of the year, up from 43.1 percent in all of 2016. Volume was up 1.7 percent from the ... [Charts]

A new net tangible benefit test for ensuring that a VA borrower benefits from a refinancing appears to be the obvious solution to the VA’s churning problem, according to analysts at Bank of America Merrill Lynch (BAML). Modeled after the FHA net tangible benefit test, the test seems to be a “foregone conclusion” for VA, analysts said. A Ginnie Mae/VA task force is currently working to resolve the problem, which is causing rapid prepayments in Ginnie mortgage-backed securities and raising serious doubts as to whether aggressive refinancing truly benefits veterans and servicemembers. “There is a critical need to ensure that veteran borrowers are not harmed by repeated refinancings through VA’s Interest Rate Reduction Refinance Loan program,” said Mortgage Bankers Association President/CEO David Stevens during a recent appearance before the House Financial Services Committee. IRRRLs, also referred to ...

FHA lenders think the new Loan Review System is a “modern and streamlined system” that is less user-friendly than Neighborhood Watch, according to the Mortgage Bankers Association. In a letter to the Department of Housing and Urban Development, the MBA called on the FHA to continue its ongoing discussion with lenders and other industry stakeholders on how the improve the LRS and its response timelines. Implemented last May, the LRS is an electronic platform for monitoring and reviewing the quality of single-family mortgages that FHA has insured. It replaced the post-endorsement technical review performed by the FHA Connection/Underwriting Review System (URS), review functions for post-closing test cases submitted by direct endorsement lenders, and lender self-reporting functions in Neighborhood Watch. The LRS also includes a defect taxonomy, which features a list of ...

Ocwen Financial appears to be just as mystified as anyone else when it comes to understanding why the Department of Justice has not weighed in on the company’s dispute with the CFPB, as it had been invited to do. But that hasn’t kept the nonbank mortgage servicer from asking the court to proceed with oral arguments. Late last month, Ocwen filed a supplemental motion with the U.S. District Court, Southern District of Florida, West Palm Beach Division, in favor of its earlier motion to dismiss the bureau’s complaint against it. The purpose of the motion is “to clarify the position of the United States [government] on the issue of plaintiff CFPB’s structural unconstitutionality, in light of the inaction of the ...

Republican efforts to repeal and replace the Patient Protection Affordable Care Act may have faltered, but a GOP-controlled White House, Senate and House were able to unite and achieve at least one major accomplishment: they deep-sixed the CFPB’s controversial rule banning mandatory arbitration clauses in most consumer financial services contracts. Last week, President Trump turned aside an unusual personal appeal from CFPB Director Richard Cordray and went ahead and signed into law the joint resolution under the Congressional Review Act that permanently overturns the bureau’s problematic rule.Under the act, not only is the bureau’s rule now rendered null and void, any successor to Cordray will be unable to push through another substantially similar measure. That means only Congress can ...

Industry representatives were pleased with the news that the Republican-controlled Congress and the Trump administration were able to cooperate and overturn the CFPB’s controversial rule banning mandatory arbitration clauses in most consumer financial services contracts. According to Consumer Bankers Association President and CEO Richard Hunt, “The CFPB’s rule was never about protecting consumers; rather, it was about protecting trial lawyers and their wallets,” he said. “The CFPB’s own study backs that up and proves trial lawyers would have been the real winners had this rule gone into effect.”Rob Nichols, president and CEO of the American Bankers Association, characterized the vote as a win for consumers. “As we and others made clear in our multiple comments to the CFPB, the ...

In response to allegations from Republicans that CFPB Director Richard Cordray may have violated federal election law by dipping his toes in the electoral waters of Ohio gubernatorial politics while still at the helm of the bureau, the U.S. Office of Special Counsel has investigated the nation’s top consumer regulator and cleared him of any wrongdoing. The disclosure was made in a letter sent last month by the special counsel to Cordray. “The U.S. Office of Special Counsel (OSC) completed its investigation into allegations that you violated the Hatch Act by being a candidate in the 2018 Ohio gubernatorial election while employed as the director of the CFPB,” said OSC Deputy Chief Erica Hamrick. “OSC found no evidence that you ...

During the recent annual meeting of the Mortgage Bankers Association, a top compliance expert highlighted some of the biggest issues and concerns the industry faces under the new data collection and reporting regime ushered in by the CFPB’s updated Home Mortgage Disclosure Act rule. The short list of the most significant considerations, of course, includes the fair lending implications of the new requirements. Mitch Kider, chairman and managing partner of the Weiner Brodsky Kider PC law firm in Washington, DC, told attendees at one break-out session that HMDA data accuracy (or errors) sets the tone for an entire CFPB examination. “Most of the new data fields companies already have,” he said. “Do you know what story your data currently tells ...

The CFPB recently issued some proposed policy guidance for its Home Mortgage Disclosure Act rule that could help borrowers on the data privacy front, but it might not be enough, according to one compliance attorney. “On the heels of the Equifax data breach and continued cybersecurity threats, the CFPB’s guidance is a clear attempt to alleviate concerns regarding identity theft and information security,” Alexander Koskey, an associate in the Atlanta office of the Baker Donelson law firm, said in a recent client note. “However, significant privacy concerns persist that the increase in the amount of data that is being disclosed for the first time will make it easier to discover the identity of applicants and borrowers.”Additionally, given that the ...