Browse articles from all of our Newsletters related to Regulators.

May 19, 2017 - Inside The GSEs

Fannie, Freddie Release DTS Drafts, Detail Chattel Loan Pilot

Fannie Mae and Freddie Mac have proposed to pilot chattel loan programs within the next couple of years, but the manufactured industry wasn’t exactly impressed. Early last week, the GSEs released draft proposals detailing how they plan to boost underserved manufactured housing, rural housing and affordable housing preservation markets for low- and moderate-income families over the next three years. Under the Federal Housing Finance Agency’s duty-to-serve requirement, Fannie and Freddie are charged with coming up with ways to increase financing in those three areas. The drafted plans are part of an extended implementation process. The GSEs admitted there is not much information available about chattel lending and said...

May 19, 2017 - Inside The GSEs

CRT Programs Play Key Role in Housing Finance Reform

Fannie Mae and Freddie Mac credit-risk transfer programs have evolved from their prior business model but the market still has a ways to go before it fully matures, according to Federal Housing Finance Agency Director Mel Watt. Watt noted that the GSEs have made a tremendous amount of progress on credit risk transfers in a short amount of time, increasing their transaction volume from an unpaid principle balance of $90 billion in 2013 to $548 billion in 2016. “From 2013 through the end of 2016, the enterprises have transferred a meaningful portion of credit losses on a combined $1.4 trillion in mortgages, with a risk in force of about $49 billion,” said Watt, while...

May 19, 2017 - Inside The GSEs

FHFA’s Capital Buffer Plan Draws Praise, Criticism and Questions

Federal Housing Finance Agency Director Mel Watt’s comments last week that he’s prepared to allow the GSEs to build a capital buffer to avoid a Treasury draw was met with both applause and concern. But this week, Bob Ryan, special director to Watt, clarified the comments stating that the plan would entail delaying the dividend payments to the U.S. Treasury Department and not suspending them. Ryan, speaking during a credit-risk transfer symposium in New York City, kicked off the first five minutes of a panel discussion about GSE reform by talking about the potential capital buffer plan. He said that it would be done strictly for the purpose of avoiding draws on the “limited resources of the preferred stock purchase agreement.”

May 8, 2017 - Inside the CFPB

Ocwen Faces Ratings Downgrades, Pending Class-Action Litigation

Ocwen Financial Corp. is facing more trouble than just its struggle with the CFPB and a number of state regulators. The mortgage lender/servicer also faces the increasing likelihood of some ratings downgrades as well as pending class-action lawsuits. Fitch Ratings recently revised Ocwen’s U.S. residential mortgage-backed securities servicer ratings outlook to negative. “The revision of the rating outlook for the servicer ratings is based on uncertainty surrounding the financial and operational impact of new regulatory actions taken by the CFPB and the multi-state actions following the findings of the Multi-State Mortgage Committee,” Fitch said. The negative rating outlook also takes into consideration Ocwen’s financial condition. Fitch placed the company’s and its corporate parent’s long-term issuer default rating on “rating watch ...

May 8, 2017 - Inside the CFPB

Ocwen Asks Court to Decide CFPB is Unconstitutional

Ocwen Financial Corp. recently filed two related motions that seek an early court ruling that the CFPB is unconstitutional, and therefore its enforcement action against the lender/servicer should be thrown out. Echoing an argument made earlier by PHH Corp. in its own dispute with the bureau, Ocwen told the U.S. District Court for the Southern District of Florida, West Palm Beach Division, that the CFPB is unconstitutionally structured because it vests “too much unfettered power” in the hands of the agency’s director and in the bureau itself. The company informed the court and the Department of Justice that it intends to directly challenge the CFPB’s constitutionality at the earliest possible opportunity and to seek dismissal of the case on this ...

May 8, 2017 - Inside the CFPB

House Committee Passes CHOICE Act, Prospects in Senate Iffy

The House Financial Services Committee last week spent three days marking up the Republican majority’s alternative to the Dodd-Frank Act. H.R. 10, the Financial CHOICE Act, introduced late last month by committee Chairman Jeb Hensarling, R-TX, would make a number of changes to the mortgage regulatory landscape. One provision would provide a safe harbor against litigation for residential mortgages held on the lender’s balance sheet since the origination of the loan if the mortgage fails to comply with ability-to-repay requirements. The measure also would revise the definition of “points and fees” under the Truth in Lending Act to exclude fees paid for affiliated business arrangements. Other language in the bill would exempt smaller creditors from TILA’s escrow requirements. Another provision ...

May 5, 2017 - Inside The GSEs

Updated CHOICE Act Makes FHFA Director Removable by President

The House Financial Services Committee passed the updated version of the Financial CHOICE Act, which includes a new provision that lets the president fire the director of the Federal Housing Finance Agency at will and makes Congress responsible for setting the agency’s budget. The CHOICE Act 2.0 removed the original text, which recommended restructuring the agency to a five-member board. So while the current single-directorship structure would be maintained, the FHFA director can be asked to vacate the position by the president at any time. FHFA Director Mel Watt’s five-year term ends in early 2019. The provisions in this Republican bill would make widespread changes to the Dodd-Frank Act, but...

April 21, 2017 - Inside The GSEs

MBA Expands on Earlier Fannie, Freddie Reform Proposal

The Mortgage Bankers Association, this week, released more details in conjunction with its GSE reform proposal published earlier this year. Expanding on some of the concepts presented in January, the MBA paper includes more detailed end-state reform recommendations including elaborating on the transition plan. The trade group’s approach for reforming Fannie Mae and Freddie Mac calls...


Should any GSE reform bill from Congress be based on the concept of preserving Fannie Mae and Mac and their existing operations?

GSE reform won’t happen in my life time.

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