As Congress worked on tax reform legislation, participants in the structured finance market didn’t raise many concerns, but the bill passed this week could cause some problems for MBS and ABS markets, according to the Structured Finance Industry Group.

The Senate Banking, Housing and Urban Affairs Committee recently passed a bipartisan measure that will provide some noteworthy relief from a handful of CFPB regulations, especially for small and regional lenders. Under S. 2155, the Economic Growth, Regulatory Relief and Consumer Protection Act, certain mortgages originated and retained in portfolio by banks and credit unions with less than $10 billion in total assets would be deemed qualified mortgages under the bureau’s ability-to-repay rule. The act also would provide regulatory relief under the Home Mortgage Disclosure Act for small depository institutions that have originated less than 500 closed-end mortgage loans or less than 500 open-end lines of credit in each of the two preceding calendar years. The Government Accountability Office would ...

Analysts at S&P Global Ratings said that they do not expect mortgage servicers to see much of an impact from ongoing efforts at deregulation. “The recent resignation of the head of the CFPB – a major tenet of Dodd-Frank – the appointment of a new CFPB acting director, and the Trump administration’s focus on rolling back financial regulations suggest more lenient industry standards could be in the future,” they said in a report recently. However, they don’t foresee any major shift in the industry. “For one, no servicer wants to be associated with following questionable strategies or practices,” the ratings service said. “Furthermore, implementing regulatory initiatives in the past 10 years has been costly for servicers. It would be counterproductive for servicers ...

Speaking during a recent public appearance in Washington, DC, Mark Calabria, chief economist in the Executive Office of the Vice President, discussed the Trump administration’s priorities when it comes to regulatory reform, and the CFPB’s ability-to-repay rule was one of the items on the list. “Looking at the mortgage finance system as a whole is critical, as is reviewing the substantive rule-makings that came out of the Dodd-Frank Act,” said Calabria, former director of financial regulation studies at the libertarian Cato Institute in Washington, DC, and a former Capitol Hill staffer involved in drafting the framework for the conservatorships of government-sponsored enterprises Fannie Mae and Freddie Mac. “We really did expand the regulatory framework with things like the qualified mortgage ...

Fannie Mae and Freddie Mac would be barred from making contributions to the Housing Trust Fund if Federal Housing Finance Agency Director Mel Watt decides to forgo sending dividend payments to the Treasury under a bill approved this week by the House Financial Services Committee. The GSE Jumpstart Reauthorization Act of 2017 (H.R. 4560) would also extend an existing prohibition on the Treasury Department from selling its shares in the GSEs without congressional approval. That ban, currently due to sunset at the end of this month, would be extended to Dec. 31, 2018.The bill, introduced on Dec. 6 by Rep. French Hill, R-AR, would suspend Fannie Mae and Freddie Mac...

Resolving the Fannie Mae and Freddie Mac conservatorship dilemma got a significant boost last week when House Financial Services Committee Chairman Jeb Hensarling, R-TX, said he’s open to negotiations on housing-finance reform. During a speech at a National Association of Realtors conference, Hensarling expressed support for a bipartisan approach while outlining his beliefs for a sustained housing-finance reform plan. This represents the first time that the lawmaker publicly said he’s ready to make a deal when it comes to reform. And that includes changing his tune on opposing any type of government guarantee for mortgage-backed securities backed by conventional home loans.

A coalition of industry groups has urged the Senate Committee on Finance to retain the current capital gain exclusion on the sale of a principal residence, warning that such a provision in the Republican tax reform plan would adversely affect young families and those relocating to new jobs. Specifically, the proposal in the House and Senate versions of the tax bill would retain the $500,000 capital gain exclusion ($250,000 for unmarried taxpayers) but lengthen ownership and use requirements ...

Banks servicing delinquent mortgages in 2009-2010 allegedly delayed foreclosure starts in the districts of then-members of the House Financial Services Committee in order to influence legislative action on the Dodd-Frank Act, according to a working paper published by the Ohio State University.

Members of the House Financial Services Committee this week approved a bill that would sus-pend Fannie Mae and Freddie Mac contributions to the Housing Trust Fund if the government-sponsored enterprises don’t pay dividends to Treasury. The panel approved the bill on a partisan vote of 33 to 27.

It appears that Congressional reform of the housing-finance system – and final resolution of Fan-nie Mae and Freddie Mac – is back on track with a key piece of good news for MBS investors: an ex-plicit federal guarantee on conventional product looks likely.