Data are one of the big drivers behind the Consumer Financial Protection Bureau’s decision to re-open the public comment period on its ability-to-repay rule before making the new regulation final. The Federal Register notice that announces the re-opening the comment period explains that the CFPB has received data from the Federal Housing Finance Agency tracking the performance of loans bought or backed by Fannie Mae and Freddie Mac from 1997 to 2011. The CFPB has also received data on other securitized mortgages. According to the bureau, the data can be tapped for a variety...

House Financial Services Financial Institutions Subcommittee Chairman Shelley Moore Capito, R]WV, and Rep. Brad Sherman, D]CA, have been circulating a gdear colleagueh letter in an effort to ratchet up political pressure on the Consumer Financial Protection Bureau to adopt a gsafe harborh for its pending qualified mortgage rule. gWe believe that the final rule must structure the QM as a strong legal safe harbor, not a rebuttable presumption. Both could still be challenged in court,h the lawmakers said. gHowever, as the Federal Reserve correctly stated in its preamble to the rule...

In the case of Brisbin v. Aurora Loan Services LLC, the U.S. Court of Appeals for the Eighth Circuit has ruled that a lender’s oral promise to postpone foreclosure is unenforceable; that is, that such a promise is a credit agreement that has to be in writing if it is to be enforceable. Borrower Alison Brisbin filed this lawsuit in Minnesota state court against Aurora Loan Services LLC, Mortgage Electronic Registration Systems Inc. and Freddie Mac, seeking legal and equitable relief from the foreclosure and sale of her home. She alleged three legal theories for invalidation of the...

Competition for non-agency jumbo originations is increasing, according to industry participants. The interest, largely from big banks looking to hold jumbos in portfolio and real estate investment trusts looking to securitize the assets, has led to a decline in interest rates.“All of a sudden it’s the asset of choice because big banks are uncomfortable with other assets, so they’re coming at jumbo home mortgages,” Jim Herbert, CEO of First Republic Bank, a lender that has long-focused on jumbos, said ... [Includes one data chart]

Non-agency mortgage-backed security investors and politicians on both sides of the aisle were critical this week of the recent $25.0 billion servicing settlement. The settlement requires principal reduction loan modifications on mortgages held in five banks’ portfolios and allows the servicers to receive credit for reducing principal on mortgages in non-agency MBS. Vincent Fiorillo, a trading/portfolio manager at Doubleline Capital, noted that the Association of Mortgage Investors is not opposed to principal reduction mods ...

Most major non-agency servicers met the June 1 deadline for the start of Tier 2 of the Home Affordable Modification Program, according to the Treasury Department. While overall HAMP performance has improved, some non-agency servicers have more improvements to make. HAMP Tier 2 was designed to help borrowers with debt-to-income ratios below 31 percent as well as those with rental properties. The Treasury this week revealed the HAMP Tier 2 progress for 18 servicers. Bank of America, Green Tree Servicing and ...

BDO Consulting wa selected this week to serve as the primary professional firm to help oversee the recent $25.0 billion servicing settlement. More than 30 BDO professionals will work with the settlement’s monitor to oversee the settlement. BDO is a professional services firm providing assurance, tax, financial advisory and consulting services. The company has worked with large retail mortgage lenders and financial institutions, and conducted related assessments and investigations ... [Includes four briefs]

The Department of Housing and Urban Development and Lender Processing Services are trying to find out whose data on FHA foreclosure starts were flawed, leading to a dispute over a controversial LPS report. The April Mortgage Monitor report released by LPS shows that, while overall foreclosure starts fell 2.6 percent in April, FHA foreclosure starts jumped 73 percent to 60,000 during the month. LPS explained that the high default rate of FHA’s 2008-2009 books of business and high origination volume in those years drove the increase. Although all FHA vintages saw increases in foreclosure starts in April, those from 2009 onward have ...

Three more FHA-approved lenders have found themselves under government scrutiny as the Department of Housing and Urban Development’s Office of the Inspector General broadened its investigation of potential abuses of the FHA single-family program. The OIG reportedly issued subpoenas to three large financial institutions last month to submit information on their FHA operations to determine whether the lenders followed HUD requirements when originating and underwriting FHA loans. The inspector general also would look to see whether quality control programs are ...

The Department of Housing and Urban Development is expanding an existing FHA note sales program as an alternative strategy for disposing of foreclosure property from the department’s bulging real estate-owned inventory. HUD Secretary Shaun Donovan announced enhancements to the accelerated claims disposition (ACD) program, which was designed primarily for delinquent FHA loans, at the 2012 Clinton Global Initiative America Meeting held this week in Chicago. The event brings together government and private sector leaders to discuss ways to ...