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Inside Mortgage Finance

October 1, 2015

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2014 HMDA Findings Reveal Larger-Than-Expected Conventional Conforming Market, Smaller GSE Share

Loan origination data for 2014 that were released last week by federal regulators show that the conventional mortgage market was considerably bigger than previously estimated – and that production levels this year are rising. Home Mortgage Disclosure Act data show that lenders covered by the law’s reporting requirements originated $969 billion of conventional purchase and refinance loans last year. About $232 billion of that amount came in loans exceeding the county-level conforming loan limits in effect for Fannie Mae and Freddie Mac last year. The remainder, $737 billion, represents...[Includes two data tables] Read More

Many Fear the CFPB Wants to Kill All MSAs, But Movement Mortgage Takes a Stand and Stays Put

The Consumer Financial Protection Bureau has yet to clarify what it doesn’t like about “marketing service agreements” between originators and Realtors, and the less the agency talks about the topic – publicly, at least – the more lenders fear that eventually the regulator will try to eliminate such agreements altogether. To date, at least two lenders – Wells Fargo and Prospect Mortgage – have announced they are ending their MSAs, but sources indicate that several firms have undergone CFPB audits (or soon will) with a special emphasis on how they manage business referrals with realty companies and how much money changes hands. Inside Mortgage Finance has learned... Read More

Specialty Servicers Face the Music Thanks to Improving Loan Quality; Is IBM Considering Its Options on Seterus?

With loan quality and real estate values continuing their rapid improvement over the past two years, the market value of “high-touch” servicers continues to head south and a handful of such firms are pondering sales. According to advisors that ply their trade in the mergers and acquisitions circuit, at the top of the “for sale” list is the IBM-owned Seterus, which at one point had at least $40 billion in problem Fannie Mae-related loans on its system. But will IBM – which also has its hands in the origination technology arena – finally pull... Read More

CFPB, Other Regulators Working on Guidance To Affirm a ‘Diagnostic’ Approach Toward TRID

It looks like the mortgage industry is on the verge of obtaining another concession from the Consumer Financial Protection Bureau regarding enforcement of its pending integrated disclosure rule. The rule will streamline the consumer disclosures required under the Truth in Lending Act and the Real Estate Settlement Procedures Act. This TILA/RESPA Integrated Disclosure rule is slated to take effect Oct. 3, 2015, and will create a new regulatory regime – and perhaps a good bit of havoc in the process, at least in the short term. The anxiety over the confusion and expected delays has prompted... Read More

Regulators Push Back Against Claims that ATR Rule, QM Standards Had a Negative Impact on the Mortgage Market

Officials at the Consumer Financial Protection Bureau and the Federal Reserve have gone on the offensive to refute claims from lenders and their advocates regarding the ability-to-repay rule. At a hearing this week by the House Financial Services Committee, CFPB Director Richard Cordray noted that he recently met with the CEOs of the top 40 mortgage companies as part of an event hosted by the Mortgage Bankers Association. Cordray said the CEOs revealed that none of the lenders have faced lawsuits alleging violations of standards for qualified mortgages. “All this foaming at the mouth about legal liability did not...[Includes one data table] Read More

Jumpstart GSE Reform Act Reintroduced But Overall Housing Reform at a Standstill

A streamlined version of the “Jumpstart GSE Reform Act,” recently reintroduced in Congress, then placed on hold and reintroduced again, could be considered before the end of the year. The bill, sponsored by Sens. Bob Corker, R-TN, Mark Warner, D-VA, and Elizabeth Warren, D-MA, would bar the Treasury from selling its stock in the two government-sponsored enterprises and prevent increases in Fannie Mae and Freddie Mac guaranty fees to pay for other government spending. An earlier version of the bill that Corker tried to fast-track through the Senate did not include... Read More

CFPB Enhances Definitions of ‘Small Creditor’ and ‘Rural Areas’ to Expand Mortgage Credit in Underserved Areas

The Consumer Financial Protection Bureau has issued a final rule to allow more lenders to qualify as smaller creditors doing business in rural and underserved areas. The final rule, which takes effect Jan. 1, 2016, amends certain mortgage rules issued by the CFPB in 2013 under the Dodd-Frank Act. Specifically, the final rule lifts the current origination limit to qualify for “small creditor” status from 500 mortgage loans annually to 2,000 mortgage loans per year – a limit that also excludes loans retained in portfolio from the 2,000-loan cap. In addition, the rule now includes... Read More

Trade Groups Continue to Express Concerns About FHLBank Membership Changes

Industry groups stepped up their pressure on Congress to block a proposed rule that would alter membership requirements in the Federal Home Loan Bank system. The latest letter came this week and was signed by the Mortgage Bankers Association, National Association of Real Estate Investment Trusts, Independent Community Bankers of America and Habitat for Humanity International. The Federal Housing Finance Agency proposed... Read More

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