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 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. ...

Massachusetts. State Attorney General Martha Coakley reportedly plans to obtain documentation filed by Mortgage Electronic Registration Systems as part of the broader investigation by a 50-state coalition of attorney generals into potentially unlawful foreclosure practices. New Jersey. Former mortgage broker Ara Mesropian, 39, of Paramus, NJ, pleaded guilty to charges that he participated in a mortgage fraud scheme which defrauded lenders and generated millions of dollars in fraudulent mortgage loans. ...

Wells Fargo was fined $85 million by the Federal Reserve late last month over allegations that Wells did not adequately detect and prevent instances of fraudulent loan applications and the steering of prime borrowers into higher-cost nonprime loans.The Federal Trade Commission said it is mailing 450,177 refund checks worth almost $108 million to homeowners who were allegedly overcharged by Countrywide Home Loans, Inc. ...

The number of lending institutions whose performance under the Community Reinvestment Act “needs to improve” has skyrocketed over the last two years, according to an analysis by Inside Regulatory Strategies of CRA ratings provided by the federal banking regulatory agencies from 2003 through mid-year 2011. In 2003, 0.64 percent of institutions received such a grade. And by 2009, a year after the market’s collapse, that percentage increased to 1.67 percent. ...

Analysts and legislative history suggest that Congress could still act to keep the “temporary” high-cost conforming loan limit at elevated levels. Advocates of the non-agency market have long-anticipated the drop in the loan limit, currently set to occur in October without further action from Congress. An extension of the $729,750 loan limit this year seems unlikely with the Obama administration supporting a decline to at least $625,500. Many Republicans also support a decrease in the role ...

Most state-licensed mortgage companies in the Nationwide Mortgage Licensing System and Registry are mortgage brokers, of which a significant portion does FHA loan correspondent business, according to a recent report issued by the Conference of State Bank Supervisors. As of the end of the first quarter, 14,980 companies possessed 28,415 licenses – an average of two state licenses per company, according to the report, “A Nationwide View on State-Licensed Mortgage Entities, Quarter I, 2011.” The licensee/registrant reports ...