While many commenters support the proposed exemption for the government-sponsored enterprises from new risk-retention rules in the short-term, opinions vary as to just how long Fannie Mae and Freddie Mac should enjoy such an exemption and its long-term impact on private securitizations. Federal regulators earlier this year proposed a rule which would require issuers of mortgage-backed securities to hold a minimum 5 percent of the credit risk of the assets underlying their securities unless the deal is backed by “qualified residential mortgages.” The proposed rule would exempt ...

Faced with the daunting task of identifying $1.5 trillion in budget savings, lawmakers on Capitol Hill are likely to take a close look at sacred cows like the home mortgage interest tax deduction. The mortgage interest deduction is projected to cost the U.S. just shy of $100 billion this year, does little to incentivize buying homes and is in need of reform, according to experts on a panel sponsored by the Urban Institute and Brookings Institution. “The mortgage interest reduction is one of the very, very biggest and certainly the most ...

Wells Fargo and Bank of America continued to pull ahead of the field, adding Ginnie Mae servicing to their portfolios faster than the overall market grew during the second quarter of 2011. A new Inside Mortgage Finance analysis found the two companies holding 54.9 percent of Ginnie servicing outstanding at the end of June. Third-place JPMorgan Chase trailed overall growth in the market, while CitiMortgage and PNC Bank actually [includes one data chart]

The new Consumer Financial Protection Bureau is making substantial progress on its initiative to meld the mortgage disclosure forms under the Truth in Lending Act and the Real Estate Settlement Procedures Act into one, more simplified disclosure. Still, a number of questions are being raised in the process, not the least of which has to do with what kind of regulation will eventually accompany the forms. “The first issue is that these forms just don’t reflect the regulatory and statutory requirements in many ways,” said Steve Kaplan, a partner with law firm K&L Gates LLP in its Washington, DC, office during a webinar last week sponsored by Inside Mortgage Finance Publications. “So someone who is a practitioner and who’s been dealing with these issues for years will say, ‘What is this form? This is great and dandy but do I get a safe harbor? Do I still violate the statute by providing this form?’” ...

The Consumer Financial Protection Bureau officially began functioning as a banking regulator last week, and even though it doesn’t yet have a director confirmed by the Senate, it’s already one of the most powerful regulators in the federal government, having both complete regulatory authority over the entire industry and supervisory responsibility for large banks. Among the laws the CFPB will now be in charge of enforcing are the Alternative Mortgage Transaction Parity Act, the Community Reinvestment Act, the Equal Credit Opportunity Act, the Fair Credit Billing Act, the Fair Credit Reporting Act (except sections 615(e), 624 and 628),and the Fair Debt Collection Practices Act. ...

The Senate Banking Committee plans a hearing on Thursday to consider President Barack Obama's nomination of Richard Cordray, the former Ohio attorney general and current chief of enforcement at the Consumer Financial Protection Bureau, to be the first official director of the CFPB. “With [this] hearing, I will begin the process of moving Mr. Cordray’s nomination forward to confirmation,” said Sen. Tim Johnson, D-SD, chairman of the committee. “The CFPB opened its doors as an independent agency on July 21st, and it is off to a strong start promoting an equitable and transparent consumer financial marketplace. However, until it has a director, the CFPB will not be able to use its full powers to protect consumers and level the playing field for community banks and credit unions.” ...

The Federal Trade Commission issued a final rule to strengthen consumer protections by banning deceptive claims about consumer mortgages in advertising or other types of commercial communications. The new rule lists 19 examples of prohibited deceptive claims, including misrepresentations about the existence, nature, or amount of fees or costs to the consumer associated with the mortgage; the terms, amounts, payments, or other requirements relating to taxes or insurance associated with the mortgage; and the variability of interest, payments, or other terms of the mortgage. ...

The Federal Trade Commission announced last month that it will not enforce most provisions of its Mortgage Assistance Relief Services rule against real estate brokers and their agents who help struggling homeowners obtain short sales from their lenders or servicers. The stay applies only to real estate professionals who are licensed and in good standing under state licensing requirements; comply with state laws governing the practices of real estate professionals; and assist or attempt to assist consumers in obtaining short sales in the course of securing the sales of their homes. ...

The new Consumer Financial Protection Bureau has issued a number of interim final rules in just its first week of official business as a new federal regulator, including one that establishes the procedures for the public to obtain information under the Freedom of Information Act, the Privacy Act and in legal proceedings. This interim final rule also establishes the CFPB’s rules regarding the confidential treatment of information obtained from persons in connection with the exercise of its authorities under federal consumer financial law. ...