Regulations

Browse articles from all of our Newsletters related to Regulations.

July 21, 2017 - Inside FHA/VA Lending

Around the Industry

Bipartisan Flood Bill Introduced in Senate. The Senate Committee on Banking, Housing and Urban Affairs will soon consider a bipartisan bill introduced this week that would keep the National Flood Insurance Program funded for six more years and create new risk mitigation procedures for communities to follow. Senate Banking Committee Chairman Mike Crapo, R-ID, and ranking Democrat Sherrod Brown, OH, said the bill would serve as a template for consideration by the whole committee. The Senate bill does not include core provisions in the House version, including the development of a private flood insurance market to complement the NFIP. In addition, the bill does not call for cuts in the reimbursement rate for Write-Your-Own flood-insurance carriers that service NFIP policies. However, amendments are likely, according to Crapo and Brown. Meanwhile, the ...


July 21, 2017 - Inside FHA/VA Lending

Millennials Seeking to Buy Homes In Affordable Markets, Data Show

Affordability and job availability are driving millennials to seek homes in more affordable markets, particularly in the upper Midwest, according to Ellie Mae data for the month of May. Ellie Mae’s Millennial Tracker, which monitors millennial mortgage applications during specific times, found that the higher percentages of loans made to millennial borrowers are in Hutchinson and Austin, MN, and Wahpeton and Williston, ND. Anniston-Oxford-Jacksonville, AL, rounded out the top-five markets. Ellie Mae defines millennials as applicants born between 1980 and 1999. Data showed that 48 percent of millennial borrowers who closed loans in May were single. In Hutchinson, for example, the majority of borrowers were single men. “This suggests millennials may be embracing homeownership in these areas for reasons other than what we have historically seen, which was family formation,” explained ...


July 21, 2017 - Inside FHA/VA Lending

House Panel Earmarks $50 Million For Home Counseling Assistance

The House Appropriations Committee has recommended $50 million to fund the Department of Housing and Urban Development’s FY 2018 housing counseling assistance to homebuyers, homeowners and low and moderate-income renters. The allocation is $3 million more than the Trump administration had requested and $5 million below the amount appropriated for housing counseling in fiscal year 2017. In its budget report, the committee noted the continued improvement in the economy, which has resulted in fewer foreclosures. Foreclosure filings from 2016 were reported on 933,000 properties, representing a 10-year low and a 14 percent reduction from 2015, the report pointed out. “The foreclosure rate has stayed within a historically normal range for three years, even with the pipeline of legacy foreclosures resulting from the housing bubble,” it said. In addition, the bill retains language that ...


July 21, 2017 - Inside FHA/VA Lending

VA Emphasizes Need for Testing Individual Water Supply for Vets

The Department of Veterans Affairs is warning VA lenders to adhere strictly to the agency’s requirements for safe potable water for veteran homebuyers. The agency recently provided clarification and guidance concerning the testing of private, individual water-supply systems for properties backed by VA mortgage loans. The VA has long treated potable water as a health and safety issue, including as part of its minimum property requirements that water used for drinking, washing and other in-house uses must be safe for consumption. According to the guidance, which went into effect on July 19, 2017, a disinterested third party must perform all water testing. This includes the collection and transport of water samples from the supply source. Only the local health authority, a commercial testing laboratory, a licensed sanitary engineer, or any other party that is acceptable to the local health agency may test ...


July 21, 2017 - Inside FHA/VA Lending

VA Clarifies, Underscores Use of Tidewater Process in Appraisals

The Department of Veterans Affairs is ratcheting up enforcement of its so-called Tidewater process to prevent veterans from paying more than the appraised value of the property when using a VA loan. In recent guidance, the VA reaffirmed its 2003 Tidewater Appraisal Initiative to help reduce the number of cases where appraisers have been asked to reconsider their initial appraisal, which had come in below the sales price. The guidance emphasizes procedures for improving communication of new sales data to VA fee and staff appraisers for a reevaluation of the low initial appraisal. “These guidelines should help limit the number of cases that reach the reconsideration-of-value phase and also provide a more timely response to those cases that are submitted for reconsideration,” the VA explained. The Tidewater procedure provides a designated “point of contact” (POC) the opportunity to ...


July 21, 2017 - Inside FHA/VA Lending

MRB Suspends Lender’s Authority To Originate, Service FHA Loans

The Department of Housing and Urban Development’s lender disciplinary arm, the Mortgagee Review Board, has suspended a Pennsylvania FHA lender from originating or underwriting any new agency-insured loans. In addition, HUD’s enforcement center suspended owner John Seckel from doing business with the federal government. According to HUD, Seckle Capital of Newton, PA, and its owner submitted statements and certifications purporting to show the firm was properly audited by independent certified public accountants, when, in fact, it was not. The MRB said Seckel and his firm engaged in a “years-long pattern” of deceit and falsehoods. The action is the result of HUD’s ongoing effort to hold the mortgage industry accountable for the loans it originates, underwrites or services. According to HUD’s Neighborhood Watch website, Seckel Capital has a compare ratio of 164 percent. Of the 557 loans the ...


July 21, 2017 - Inside FHA/VA Lending

HUD Note Sales Program Operating With No Formal Procedures, Says IG

An internal watchdog audit alleges that the Department of Housing and Urban Development has been auctioning distressed notes to investors with no formal guidance or procedures in place. In a recent audit report, the HUD Office of the Inspector General said the department did not conduct rulemaking or develop standards for its single-family note sales program. The IG said it performed the audit due to the large amount of FHA claims paid on note sales as well as public concerns over the creation and administration of the program. In addition, the IG has never audited the program. In 2002, HUD referred to the initial note sales program as the Accelerated Claims Disposition Demonstration Program. The department later renamed it the Loan Sales Program, and subsequently to its current name: Distressed Asset Stabilization Program. DASP accepts assignment of eligible, defaulted single-family mortgage loans in ...


July 21, 2017 - Inside FHA/VA Lending

House Appropriators Pass HUD Funding Bill, Reject Proposed Fee

The House Appropriations Committee this week approved a FY 2018 spending bill for the Department of Housing and Urban Development with a $135 million allocation for information technology upgrades in lieu of a proposed lender fee. The set-aside also covers quality control and risk management improvements as well as other administrative costs. The recommended funding is $5 million more than the FY 2017 enacted level for administrative contract expenses and $25 million below the budget request. Approved by a vote of 31 to 20, the bill provides HUD with $38.3 billion in discretionary spending for FY 2018, down $487 million from the current level. The House bill authorizes $400 billion for loan guarantees under the FHA Mutual Mortgage Insurance Fund, including the Home Equity Conversion Mortgage program, and $500 billion for Ginnie Mae. Ginnie will also receive $25.4 million for agency staffing, which is ...


July 21, 2017 - Inside FHA/VA Lending

VA Still Gaining Ground in Growing Ginnie MBS Servicing Portfolio

The VA home loan guaranty program continued to grow faster than the FHA program during the second quarter of 2017, according to a new analysis and servicer ranking by Inside FHA/VA Lending. At the end of June, Ginnie Mae mortgage-backed securities pools included $548.04 billion of VA loans, a 3.3 percent increase over the previous quarter. Compared to a year ago, the volume of VA loans was up a hefty 15.6 percent. The $1.055 trillion of FHA loans in outstanding Ginnie MBS was still nearly twice the volume of VA loans. But the FHA total was up a more subdued 1.8 percent from March and by 5.4 percent from a year ago. One reason the VA market grows somewhat faster than the FHA is that it loses fewer loans to default. For starters, the VA delinquency rate is lower – 3.03 percent in the second quarter of 2017 vs. 5.52 percent for FHA. Over the past three and a half years, the ... [ Charts]


July 21, 2017 - IMFnews

What We’re Hearing: A Good Quarter for Angel Oak, MBS Plans for Citadel / Sprout Sprouting? / Freddie About to Make Splash in SFR Market? / Trump, the Russians (Soviets) and a Housing Solution? / Not-Happy Birthday: Dodd-Frank Turns Seven

A housing crisis in America? Maybe the Russians can help...


July 21, 2017 - IMFnews

New Legal Settlement Will Prove Costly to Ocwen

However, the legal settlement likely will ding sector quarter earnings by $34 millon to $36 million…


July 21, 2017 - IMFnews

In Senate Hearing, Community Lenders Fight for Secondary Market Access, the ‘Cash Window’

At a GSE reform hearing, Sen. Mike Crapo, R-ID, chairman of the Senate Banking Committee, called small lenders “fixtures in their communities...”


July 21, 2017 - Inside MBS & ABS

CFPB Arbitration Rule Could Fuel Litigation, Impair Securitization Market Liquidity

Last week, the Consumer Financial Protection Bureau issued its long-awaited rule banning mandatory arbitration in consumer financial contracts. The industry concern is that, if left intact, the rule could lead to a rash of litigation impairing liquidity in the secondary markets and limiting consumer access to credit as companies seek to pull back on their risk exposure. The final rule prohibits “covered providers of certain consumer financial products and services from using an agreement with a consumer that provides for arbitration of any future dispute between the parties to bar the consumer from filing or participating in a class action concerning the covered consumer financial product or service.” It further requires...


July 21, 2017 - IMFnews

CFPB Proposes ‘Substantive’ Changes to its Mortgage Servicing Rule

The good news for the industry here is that the CFPB is, once again, responding to the concerns of market participants…


July 20, 2017 - Inside Mortgage Finance

House Appropriators Reject Administration’s Proposed FHA Lender Fee. A $135 Million Set Aside for IT Upgrades

The House Appropriations Committee this week approved a fiscal year 2018 funding bill for the Department of Housing and Urban Development with a $135 million allocation for systems enhancements, quality control and risk management improvements in lieu of a proposed lender fee. Approved by a vote of 31 to 20, the bill provides HUD with $38.3 billion in discretionary funding for FY 2018, down $487 million from the current level. The House measure authorizes...


July 20, 2017 - Inside Mortgage Finance

As New HMDA Regime Approaches, CFPB Cuts Some Limited Slack, While Calls Continue for Delay

With the new data collection and reporting requirements under the Home Mortgage Disclosure Act now less than six months away, anxious industry calls for regulatory relief met with some limited success recently, while others continue to urge a broader extension of the implementation period. Late last week, the Consumer Financial Protection Bureau relented somewhat, proposing to temporarily ease HMDA reporting requirements for lenders that make a small number of home equity lines of credit. The agency proposed raising the threshold for HELOC reporting from 100 loans to 500 loans, starting in January 2018. Officials acknowledged they may have...


July 20, 2017 - IMFnews

Short Takes: NYSE-Listed Firm Selling MSR Portfolio via MountainView / Former Ginnie Chief Tozer Heads to PennyMac / No Reason Given / Galante’s Ocwen Holdings / Earnings from Black Knight and MGIC

Former Ginnie Mae President Ted Tozer will join the board of PennyMac Financial Services, the nation's fourth largest home lender, in August.


July 20, 2017 - IMFnews

CFPB Issues Proposal to Address the TRID ‘Black Hole’

Currently, lenders are permitted, under certain limited circumstances, to use revised estimates…


July 19, 2017 - IMFnews

Short Takes: A Bulk MSR Deal from MountainView / Proposed HUD Lender Fee Is Cut From Spending Measure / Invictus Readies Nonprime MBS Deal / A Promotion at loanDepot

Another nonprime MBS deal is ready to hit the market, this one from Invictus Capital Partners...


July 19, 2017 - IMFnews

PIMCO: Non-Agency Changes Needed Before GSE Reform

Over the past two years PIMCO has been a major buyer of nonprime/non-QM whole loans in the secondary market…


July 19, 2017 - IMFnews

Most Mortgage Gripes Plunge – Except for Loan Servicing

Specialty servicers Ocwen and Ditech Financial ranked third and fifth, respectively, in mortgage complaints during the first six months of 2017, according to Inside the CFPB.


July 19, 2017 - IMFnews

Bank Mortgage Repurchases Trend Lower

Bank of America once again reported the biggest volume of residential loan repurchases: $421 million…


July 18, 2017 - IMFnews

CFPB Suffers Another RESPA Blow; A Victory for Affiliated Business Arrangements?

It’s unclear whether the CFPB will appeal the decision. Bureau officials declined to comment.


July 18, 2017 - IMFnews

Walter’s Warehouse Lenders Show Patience – but for How Long?

In late May, Walter disclosed in an SEC filing that some of its previously issued financial statements could not be relied upon because of what it called an “accounting error.”


July 17, 2017 - Inside the CFPB

Extend HMDA Implementation Period, Industry Urges CFPB

The American Bankers Association and banking associations from each of the 50 states and Puerto Rico last week called upon the CFPB to delay the new Home Mortgage Disclosure Act data collection and reporting requirements, which are scheduled to kick in Jan. 1, 2018. “We appreciate the bureau’s efforts to help lenders comply with the new reporting requirements,” the trade groups began. “Nonetheless, banks of all sizes are gravely concerned that they will not be able to assure proper compliance by the January timeframe.” For one thing, the new HMDA rules are inherently complex and very expensive to implement, according to the ABA and its affiliates. Also, they are incomplete. “Recently proposed adjustments to the rule are complicating compliance efforts...


July 17, 2017 - Inside the CFPB

Most Mortgage Complaints Plunge, But Gripes About Servicing Jump

Based on plunging consumer gripes sent to the CFPB, the mortgage market looks like it’s in great shape – with one glaring exception: mortgage servicing. According to a new analysis by Inside the CFPB of second quarter data from the bureau’s consumer complaint database, mortgage servicing saw a 17.5 percent jump in borrower grousing during the second quarter, but a milder 1.4 percent uptick from the first half of 2016. That latter level would be barely perceptible were it not in such stark contrast to the double-digit drop-offs seen in all other mortgage-related areas tracked by this publication. For instance, kvetching about loan modifications plummeted 81.5 percent from the first quarter of this year to the second, and [With exclusive data charts]...


July 17, 2017 - Inside the CFPB

Arbitration Rule a Risk to Banks’ Safety and Soundness, OCC Says

It’s one thing for a regulatory agency to promulgate a rule and catch a lot of slack from the affected industry. It’s quite another when another regulatory agency takes issue with a rule. The CFPB got a bit of a surprise in this regard when it issued its arbitration final rule last week: the Office of the Comptroller of the Currency expressed concerns about the potential risk the rule could pose to the safety and soundness of the U.S. banking system. In a letter to CFPB Director Richard Cordray, OCC Acting Comptroller of the Currency Keith Noreika, a recent appointee of President Trump, said, “The OCC has a mandate to ensure the safety and soundness of the federal banking system...


July 17, 2017 - Inside the CFPB

Bureau Issues Final Rule to Ban Mandatory Arbitration Clauses

The CFPB has finally issued its long-awaited final rule banning mandatory arbitration in consumer financial contracts. For starters, the final rule prohibits “covered providers of certain consumer financial products and services from using an agreement with a consumer that provides for arbitration of any future dispute between the parties to bar the consumer from filing or participating in a class action concerning the covered consumer financial product or service.” Further, the final rule requires “covered providers that are involved in an arbitration [proceeding] pursuant to a pre-dispute arbitration agreement to submit specified arbitral records to the bureau and also to submit specified court records.” The new rule applies to the major markets for consumer financial products and services overseen by...


July 17, 2017 - Inside the CFPB

CFPB Cuts Small-Volume HELOC Lenders Some HMDA Slack

Last week, the CFPB issued a proposal to temporarily ease reporting requirements under the Home Mortgage Disclosure Act for small banks and credit unions that issue home-equity lines of credit – but based on the number of such loans, not asset size of the institution. Under the CFPB’s HMDA rules scheduled to take effect in January 2018, financial institutions are generally required to report HELOCs if they made 100 such loans in each of the past two years. Under the proposal released last week, the bureau would increase that threshold to 500 loans through calendar years 2018 and 2019 in order to give the consumer regulator the time to consider whether to make a permanent adjustment. “Home-equity lines of credit worsened ...


July 17, 2017 - Inside the CFPB

JPMorgan Details Reforms Needed to Mortgage Servicing Regulation

JPMorgan Chase told the CFPB it supports the bureau’s mission of protecting consumers and recognizes that regulatory guardrails are necessary to make sure mortgage servicers adequately address consumers’ needs. “However, certain provisions of Regulation X [which implements the Real Estate Settlement Procedures Act] impose burdens on servicers that increase servicing costs and impact access to consumer credit without providing proportional benefits to consumers,” the servicer said. JPMorgan was one of the industry participants commenting on the CFPB’s proposal to start assessing the effectiveness of its mortgage servicing rules under RESPA. The financial institution went on to some of the problem areas in Reg X that still need to be addressed, one of which has to do with rules for loss...


July 17, 2017 - Inside the CFPB

Industry Suggests Improvements to Servicing Rule Assessment

Trade organizations representing the mortgage banking industry provided a number of important suggestions for the CFPB as it proceeds with a Dodd-Frank Act requirement to assess its mortgage servicing rules at the five-year mark. The first issue the American Bankers Association raised in this regard in its comment letter to the bureau was the scope of the assessment. “The CFPB should incorporate all of the servicing rules into its review, including the rules that implement the Truth and Lending Act and the amendments that the CFPB adopted to the servicing rules in 2016,” the ABA said – not just the rules promulgated under the Real Estate Settlement Procedures Act. The bureau also should take into account the rules’ effects upon consumers...


July 17, 2017 - Inside the CFPB

Bureau Issues Proposed Rule to Address TRID’s ‘Black Hole’

In addition to the so-called TRID 2.0 final rule, the CFPB recently issued a notice of proposed rulemaking related to what’s known in the mortgage industry as TRID’s “black hole,” which refers to situations in which a lender is not permitted to use a closing disclosure to reset fee tolerances. More specifically, the proposal addresses when a creditor may use a Closing Disclosure (CD), instead of a Loan Estimate (LE), to determine if an estimated closing cost was disclosed in good faith and within tolerance. Currently, lenders are permitted, under certain limited circumstances, to use revised estimates, instead of the estimate originally disclosed to the borrower, to compare to the charges actually paid by or imposed on the borrower in...


July 17, 2017 - Inside the CFPB

CFPB Codifies Final Changes to TRID, Permits Sharing of the CD

The CFPB recently published long-awaited updates to its “Know Before You Owe” integrated disclosure mortgage rule, finalizing, among other things, amendments on finance charge disclosures, disclosures tied to housing assistance that a borrower receives, and when information can be shared with third parties, including real estate agents. The KBYO rule took effect in early October 2015 as part of an effort to simplify disclosures under two laws: the Truth in Lending Act and the Real Estate Settlement Procedures Act. The lending industry commonly refers to the combined disclosures as TRID, short for TILA/RESPA Integrated Disclosure rule. In a statement on the amendments, the CFPB noted that TRID “changed the total of payments calculation so that it did not make specific...


July 17, 2017 - IMFnews

Short Takes: LOs, You’ve Been Put on Notice / Citigroup’s MSR Holdings: Down 68 Percent / GOS Outlook / Two Harbors Prices Preferred Shares / Castle & Cooke Hires Compliance Manager

Mortgage gain-on-sale margins likely will be flat...


July 17, 2017 - IMFnews

CFPB Cuts ‘Smallish’ Lenders Some HMDA Slack (Temporarily)

Under the proposal, the CFPB would increase that threshold to 500 loans through calendar years 2018 and 2019…


July 17, 2017 - IMFnews

Walter Now in Danger of Getting Kicked off the NYSE

Walter, the parent of Ditech Financial, said it expects to “acknowledge receipt” of the compliance violation and “notify the NYSE of its intention to seek to cure the deficiency…”


July 14, 2017 - Inside Mortgage Trends

Fed Study: Refi Ads Work, Could be Improved

Direct-mail advertising campaigns touting refinances help prompt borrowers to refi, according to a study by economists at the Federal Reserve. They added that policymakers should consider making it easier for lenders to target borrowers for refis. Seran Grundl and You Suk Kim, economists at the Fed, authored a recent working paper that examined how borrowers react to receiving ads in the mail for refinances. They said the effect of advertising on consumer mistakes and ...


July 14, 2017 - IMFnews

What We’re Hearing: Fairholme’s Berkowitz: Watt Will Fix the GSE ‘Zero Capital’ Problem / What’s $5 Trillion Among Friends? / The Termination and Transfer Option / A Tale of Two Mortgage Giants / Renren and Sindeo?

According to Fairholme’s math, the GSEs earn over $15 billion a year, and taxpayers own 80 percent of the companies (via the senior preferred). Berkowitz values the senior stock at $100 billion…


July 14, 2017 - IMFnews

Other MBS Trustees May Follow Wells Fargo’s Lead on Withholding Funds

Analysts at Bank of America Merrill Lynch said the action by Wells was “the most talked about topic” among market participants recently.


July 13, 2017 - Inside Mortgage Finance

Warehouse Lenders Give Walter Another Round of ‘Waivers.’ But How Long Can the Forgiveness Last?

Walter Investment Management Corp. has secured a second round of limited waivers from its warehouse providers, a signal that its lenders are being patient – for now. According to interviews with warehouse executives and consultants, the granting of short-term waivers can be a common practice, but if those waivers go into a third or fourth round it can get expensive for the borrower and may signal an end to the patience of a company’s bankers. Walter, the parent of Ditech Financial – the nation’s 13th largest residential servicer – reported...


July 13, 2017 - Inside Mortgage Finance

CFPB Finally Issues TRID 2.0 Clarifying Final Rule, Decides to Handle the ‘Black Hole’ Separately

After a few months of delay, the Consumer Financial Protection Bureau last week issued its long-awaited final rule clarifying a number of aspects of its integrated disclosure rulemaking under the Truth in Lending Act and the Real Estate Settlement Procedures Act, otherwise known as TRID 2.0. The most noteworthy revisions relate to good faith and revised disclosures, calculating cash to close, construction-to-permanent loans, and the sharing of disclosures during the origination process. In terms of good faith and revised disclosures, the 2017 TRID rule provides...


July 13, 2017 - Inside Mortgage Finance

CFPB Mortgage Servicing Rules Stabilized Market But Also Introduced Many Unintended Consequences

The mortgage servicing rules the Consumer Financial Protection Bureau promulgated in the wake of the mortgage market’s collapse brought much-needed stability to the loan servicing arena. But they also have had a host of unplanned side effects that continue to haunt the market to this day. That’s one of the prime takeaways from comments provided by some top lender/servicers and industry trade groups, in response to the CFPB’s announcement that it would begin its five-year assessment of its servicing rules as per the requirements of the Dodd-Frank Act. Wells Fargo said...


July 13, 2017 - IMFnews

Short Takes: A Big Earnings Boost for Fannie and Freddie? / The Greenwich-Ameriquest Connection / IMA Selling GSE ‘Flow’ Package / Progress Ups its SFR MBS Deal / PHH Hires LenderLive Executive

The $5.5 billion (to be) paid by RBS should boost GSE earnings big time...


July 13, 2017 - IMFnews

CFPB Servicing Rules Stabilized Market, but Unintended Consequences Too

One negative effect: the costs required to service both performing and nonperforming loans have increased substantially.


July 12, 2017 - IMFnews

FHFA Reaches $5.50 Billion Settlement with Royal Bank of Scotland

RBS will pay approximately $4.53 billion to Freddie and approximately $975 million to Fannie.


July 12, 2017 - IMFnews

HUD Mortgagee Review Board Suspends PA Lender Seckel Capital

As IMFnews went to press, Seckel was said to be in a meeting and could not be reached for comment.


July 12, 2017 - IMFnews

Flagstar Gets Rated, a Sign that it May Become More Involved in Jumbo MBS?

Jumbos accounted for 5.6 percent of Flagstar’s residential originations during the period…


July 11, 2017 - IMFnews

Short Takes: It’s Alive Again (Well, Sort Of) / Sindeo’s Roots / The Mortgage Tech Race / Happy Anniversary Fannie and Freddie (Soon) / New Hires for mREIT Giant Annaly

There's a race on to see who will be the first to deliver a best-in-class lending automation product that the consumer trusts, said consultant Paul Hindman...


July 11, 2017 - IMFnews

CFPB Issues Final Rule to Ban Mandatory Arbitration in Consumer Financial Contracts

However, Congress has already prohibited arbitration agreements in the largest market the agency oversees: residential mortgages.


July 11, 2017 - IMFnews

More GSE Cases Filed Arguing that the FHFA’s Structure is Unconstitutional

FHFA’s status as an independent agency headed by a single director makes it different from almost every other independent agency…


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