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Investors Should be Wary of New Disclosures
Although they don’t introduce any new assignee liability, new mortgage disclosure rules have increased the legal risks for mortgage lenders and raised grounds for borrowers to impede foreclosure proceedings. With that warning, analysts at Moody’s Investors Service sent a subtle message to investors: monitor originators’ compliance record. The warning is based on Moody’s...
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CFPA’s Future in Senate Remains Uncertain
The Consumer Financial Protection Agency is not yet dead but seems to be “good as dead” with Senate negotiators still unable to reach a bipartisan solution, according to industry observers. In remarks to reporters recently, Senate Banking Committee Chairman Christopher Dodd, D-CT, and Sen. Richard Shelby, R-AL, ranking minority on the committee, maintain that the CFPA remains on...
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RESPA Uncertainty Persists as Lenders Struggle with New Forms
More than a month since changes to Real Estate Settlement Procedures Act regulations were implemented, many mortgage lenders still find it difficult to navigate the new good faith estimate and HUD-1 closing forms. Compliance experts say they see a lot of confusion and different interpretations as to which disclosure goes where despite the abundance of information and...
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VA Retains 1 Percent Origination Cap, Requires Itemized Disclosure
The Department of Veterans Affairs will continue to require lenders to break out the origination fee and charges either on a new line in the HUD-1 closing statement or on a separate disclosure sheet. The VA issued the new guidance in the wake of new Real Estate Settlement Procedures Act rules, which took effect Jan. 1 to bring clarity and transparency to the mortgage settlement process...
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Seattle FHLBank Sues on Bad MBS Deals, Seeks ‘Rescission’
Lawsuits filed by the Federal Home Loan Bank of Seattle against 11 global financial institutions not only shine the spotlight on the integrity of subprime underwriting again but also highlight the embedded losses in the FHLBank system. Filed in King County Superior Court in Seattle, the lawsuits seek to recoup losses on $3.9 billion in mortgage-backed securities the bank purchased...
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Suits Against CRAs Dismissed
A federal court judge for the Southern District of New York recently threw out investor lawsuits against Standard & Poor’s and Moody’s Investor Service alleging dubious ratings practices involving structured products sold by defunct Lehman Brothers Holdings, Inc.
U.S. District Judge Lewis Kaplan let the two credit ratings agencies off the hook after finding that provisions of the securities laws...
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Consumer Protection, Stronger FHA Central to FY11 Budget Plan
The Department of Housing and Urban Development is continuing its focus on strengthening the housing market and better protecting consumers with a $48.5 billion budget request to Congress, even as the Obama administration seeks restrictions on mortgage interest deduction. The FY 2011 HUD funding request is up from the $43.58 billion Congress approved for the department for...
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Bill Revives Seller-Funded DAPs
Seller-funded downpayment assistance, tagged as a scam by federal housing regulators and the Internal Revenue Service, is trying to make a comeback. Legislation introduced last year Rep. Al Green, D-TX, would revive the program, which was statutorily banned in 2008. HUD attributed part of its huge losses to FHA loans with seller-assisted downpayments...
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Treasury Refines HAMP Paperwork Process to Boost Trial Conversions
Starting this summer, mortgage servicers will begin verifying income documentation before offering a borrower a trial modification plan – a move the Obama administration hopes will lead to more conversions to permanent modifications. The changes to the Home Affordable Modification Program announced Jan. 28 by the Treasury Department would address the problem of insufficient, misplaced or lost...
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OCC Favors Minimum Underwriting Standards over ‘Skin in the Game’
Comptroller of the Currency John Dugan argued for the return of a more vibrant, credible securitization market as a source of credit for economic revival but expressed concerns about requiring issuers and loan originators to retain risk or “skin in the game” in every MBS transaction. Speaking before the American Securitization Forum, Dugan suggested an alternative...
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State Roundup
Washington: The state legislature has adopted changes to statutes governing mortgage broker practices and consumer loans. Charging upfront broker fees is now illegal under the... Wyoming: The state Department of Audit has adopted changes to the Residential Mortgage Practices and Uniform Consumer Credit Code regulations. The changes apply to...
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Federal Roundup
Action Against Lenders. The Department of Housing and Urban Development’s Mortgagee Review Board took action against four lenders... FACTA Risk-Based Pricing Rule. The Fed and the FTC have issued joint final rules implementing the risk-based pricing... Improper Record Disposal. A mortgage broker who discarded consumers’ personal financial records in a public dumpster...
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Worth Noting …
On Feb. 1, Ben Bernanke was sworn in for a second four-year term as chairman of the.... Radian expanded its standard guidelines, making rate/term refinances and attached... Republic Mortgage Insurance Corp. announced changes to its Declining Markets classifications... United Guaranty has amended its Declining Market Eligibility Criteria relating to... The National Association of Mortgage Brokers will have its Legislative...
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Dodd to Advance on Reg Reform
Senate Banking Committee Chairman Christopher Dodd, D-CT, said he will move forward on regulatory reform legislation with or without Republican support. The American Bankers Association reports that for the first time, Dodd last week acknowledged that Senate negotiators have hit a brick wall on regulatory reform, particularly on the creation of an...
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CRA Ratings
Recent CRA ratings issued by federal agencies
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