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Inside Mortgage Finance

July 28, 2011

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Mortgage Origination Volume Dropped Sharply During Second Quarter, Rebound May Be Modest

Residential mortgage lending fell sharply in the second quarter, sinking to levels not seen since the depth of the financial market meltdown in late 2008. Lenders originated an estimated $265.0 billion in 1-4 family mortgages during the second quarter, down 18.5 percent from the first three months of the year. Production barely topped the $260.0 billion in mortgage originations posted in the fourth quarter of 2008, which was the lowest quarterly out-put since early 2000. Third-quarter production appears to be ... [includes two data charts] Read More

Mortgage Lenders Urge Adoption of a True Safe Harbor as Regulators Craft Qualified Mortgage Rule

Mortgage industry officials are pressing the Consumer Financial Protection Bureau to create a true legal safe harbor as it takes over a rulemaking project to implement ability-to-pay requirements enacted as part of the Dodd-Frank Act. Although the Federal Reserve drafted the proposed ability-to-pay rule, it did not take a firm stand on defining the legal protection lenders will get from originating “qualified mortgages.” Late last week, the project – which implements amendments to the Truth in Lending Act – was passed on to the CFPB. The Fed proposed rule contains ... Read More

Lower Mortgage Rates Helped Push Up Government Share of Housing Market in June, HousingPulse Finds

Thanks to low mortgage rates, the government share of the home purchase market rose in June, according to new numbers compiled from the Campbell/Inside Mortgage HousingPulse Tracking Survey. But the latest survey also highlighted several factors that are likely to put downward pressure on home prices in the balance of this year. Mortgage rates have been falling for the past several months, dipping to below 4.5 percent in June for 30-year fixed-rate mortgages financed through Fannie Mae, Freddie Mac and FHA, Inside Mortgage Finance’s weekly sampling of rates reveals. This has helped ... [contains one graph] Read More

Court Blocks a Dodd-Frank Rule as Federal Agencies Enter Second Year of Massive Rulemaking Marathon

The U.S. Court of Appeals in Washington last week struck down a recent federal rule drafted to implement provisions in the Dodd-Frank Act, claiming that the agency did not properly weigh the economic costs and benefits of the new rule. As regulators across Washington, including the new Consumer Financial Protection Bureau, press to meet their Dodd-Frank mandates, opponents of the controversial law are turning to litigation over the rulemaking process to stymie new regulations. The appellate court action involved a Securities and Exchange Commission rule intended to allow ... Read More

Federally Supervised Banks Rush to Register with NMLSR as July 29 Deadline Looms; Low State Licensing Turnout in 1Q

Some federally regulated depository institutions are scrambling to meet a July 29 deadline to register with the Nationwide Mortgage Licensing System and Registry to avoid possible sanctions by the Consumer Financial Protection Bureau. Although the covered institutions have begun registering their mortgage loan originators as required by the Secure and Fair Enforcement for Mortgage Licensing Act, there is some confusion about other employees whose mortgage-related responsibilities are not as clear cut as those of MLOs, said compliance experts. Such employees include those who ... Read More

Debt Negotiations Drown Out Industry Efforts To Maintain Current High-Cost Loan Limits

Industry efforts to postpone a scheduled reduction in the high-cost loan limits for Fannie Mae, Freddie Mac and the FHA this fall may be gaining traction, but legislative insiders say the sound and fury surrounding the current debt limit talks have crowded out all other issues at the moment. Last week, the Mortgage Bankers Association joined the National Association of Realtors and the National Association of Home Builders in calling on Congress to act to extend the higher temporary loan limits for at least another year. The central argument of MBA and the other trade groups is that ... Read More

Wells Fargo Hit With $85 Million Penalty in Rare Fed Move Against Finance Company

The Federal Reserve fined Wells Fargo $85 million last week over high-pressure compensation policies in the firm’s finance company that allegedly led to steering of prime borrowers to more lucrative non-prime mortgages. The $85 million fine is the largest ever levied by the Federal Reserve in a consumer enforcement case. Wells has since shut down Wells Fargo Financial, its subprime subsidiary that was the focus of the Fed’s charges. CEO John Stump said in a statement the “alleged actions” were “committed by a relatively small group of team members.” The Fed said Wells Fargo Financial’s incentive compensation and sales quota programs fostered ... [includes one data chart] Read More

CFPB Bank, Non-Bank Examinations Might Begin Sooner Than Expected, Experts Say

The Consumer Financial Protection Bureau may have taken the field before its franchise quarterback has suited up, but that’s unlikely to slow agency examiners in making their appointed supervisory rounds. They’ve already introduced themselves to their largest bank charges and are fine-tuning their internal examination guidelines so that when they get the final authority to supervise non-banks, they will come calling without delay, according to industry presenters at the latest webinar sponsored by In-side Mortgage Finance. When the CFPB officially ... Read More

CFPB Will Study Credit Scores to See If Lenders and Consumers See Same Reports

Consumers could be setting themselves up for problems in the credit market if they are getting credit information about themselves that differs from what lenders are looking at, according to a new report released by the Consumer Financial Protection Bureau. In a report to Congress, the agency said it plans to study the variations between credit scores sold to lenders and those sold to consumers to shed light on potential harm to the consumer. “The most substantial harm would likely result if, after purchasing a score, a consumer has a different impression of his or her ... Read More

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