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Inside the CFPB

March 16, 2009

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Frank Wants Wall Street Cheaters Charged

House lawmakers are considering tougher mortgage lending and securitization requirements – even possible prosecution of Wall Street cheaters – under new consumer protection legislation that could change the way the mortgage industry does business. The House Financial Services Committee will soon be taking up new legislation based on H.R. 3915, the Mortgage Reform and... Read More

Uphill Battle Likely to Delay Cramdown Bill

A tougher fight is shaping up in the Senate over mortgage cramdown legislation, which could delay the bill through Easter, according to industry sources. Senate supporters of cramdown, which would allow bankruptcy judges to reduce principal and to alter rates and terms on a home loan, are said to be seeking support from the credit unions to counter opposition by Republicans and... Read More

Groups Urge Caution as Congress Considers Model for New Package

Industry and consumer groups are urging Congress to be cautious in its consideration of H.R. 3915, the Mortgage Reform and Anti-Predatory Lending Act, as a basis for new consumer protection legislation, saying the market and the financial services system have changed s great deal since 2007 when Congress approved the legislative package. Consumer advocates had mixed views of... Read More

Senators Hold Colloquy to Clarify Bill’s Errant Enforcement Provision

Omnibus appropriations legislation was signed into law last week, including a controversial amendment to strengthen enforcement of the Truth in Lending Act and federal unfair-and-deceptive-lending laws. Introduced by Sen. Byron Dorgan, D-ND, the amendment appears to give authority to the Federal Trade Commission to write mortgage-related rules for all mortgage lenders. It also appears... Read More

Comment Sought on Withdrawal of RESPA’s ‘Required Use’ Provision

The Department of Housing and Urban Development is considering withdrawal of a controversial “required use” rule so that it can start a new rulemaking on the issue. HUD’s decision directly benefits homebuilders, who may lose their ability to offer incentives to consumers to use affiliated mortgage or title companies if the measure is allowed to stand... Read More

Appraisal Groups Warning: Use of AVMs in Obama Loan Mod Plan Could Place Taxpayers at Risk

Inadequate appraisal requirements could result in unnecessary taxpayer losses and leave many homeowners ineligible for loan modification under President Obama’s “Making Home Affordable” loan modification program, the appraisal industry warned. The American Society of Appraisers, the Appraisal Institute, and the American Society of Farm Managers and Rural Appraisers said... Read More

HUD View Sought on Servicer Exclusion from S.A.F.E. Act

Industry trade associations have asked Housing and Urban Development Secretary Shaun Donovan to make clear that the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 excludes mortgage servicers. The trade groups warned that without clarifying guidance from the Department of Housing and Urban Development, states could pass new laws requiring mortgage servicers to be... Read More

Legislation Expanding Scope of CRA to Non-Banks Introduced

The National Community Reinvestment Coalition and Rep. Eddie Bernice Johnson last week unveiled legislation modernizing and expanding upon the benefits of the Community Reinvestment Act. The bill would expand the CRA beyond federally regulated financial institutions to include independent mortgage lenders, mainstream credit unions, banks’ mortgage affiliates and securities firms... Read More

State Roundup

California: Gov. Arnold Schwarzenegger, R, signed into law the California Foreclosure Prevention... Virginia: On Feb. 26, Gov. Timothy Kaine, D, signed H.B. 2568 into law. The bill amends the... South Dakota: Gov. M. Michael Rounds, R, signed legislation on Feb. 20 prohibiting mortgage lenders... Read More

Federal Roundup

Federal Deposit Insurance Corp.: Use of Volatile Funding Strategies. Insured depository institutions will be subject to closer regulatory scrutiny if they engage... FRB/OCC/FDIC/OTS/NCUA: ‘Making Home Affordable’ Loan Mod Program. Federal financial institutions regulators encouraged their banks, thrifts and credit unions... Read More

Worth Noting …

Financial Accounting Standards Board Chairman Robert Herz assured... The Mortgage Bankers Association met recently with the Treasury Department... Standard & Poor’s last week lowered its counterparty credit and financial strength... PMI Mortgage Insurance Co. will no longer provide contract underwriting... Rep. Judy Biggert, R-IL, last week introduced legislation to ease mortgage... Read More

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