FHA Revises TOTAL Mortgage Scorecard. Effective on June 11, 2016, the FHA’s TOTAL Mortgage Scorecard no longer returns either upfront or annual mortgage insurance premium factors to an automated underwriting system. The FHA directs lenders to consult Appendix I of its Single Family Housing Policy handbook for applicable MIP factors. AUS vendors have been notified of the change and have adjusted their systems accordingly. HUD, First Citizens Bank Settle Fair Lending Complaint. A South Carolina bank has agreed to correct its lending practices and allocate funding to resolve allegations that it denied more loans to minorities compared to similarly-situated white loan applicants. The settlement agreement stemmed from a complaint filed by the Department of Housing and Urban Development against First Citizens Bank and Trust Co. in 2011 after an analysis of ...

Mortgage lenders soon will be facing higher civil monetary penalties that may be imposed by federal agencies for violations of various lending, servicing and consumer financial protection laws and regulations, warned industry attorneys. As part of the budget bill signed into law last year, the Federal Civil Penalties Inflation Adjustment Act (FCPIAA) requires federal agencies to adjust the civil penalty amounts they charge for inflation by July 1, 2016. This will be followed be regular adjustments by January 15 of every year. The adjustments must be...

Two appraiser trade groups raised concerns this week that federal banking regulators are re-interpreting longstanding policy to exempt most of the mortgage market from appraisal rules. The American Society of Appraisers and the National Association of Independent Fee Appraisers published a white paper and wrote to leaders in Congress detailing positions taken by federal regulators regarding the application of appraisal standards included in the Financial Institutions Reform, Recovery and Enforcement Act. Federal regulators are...

Rep. Jeb Hensarling, R-TX, chairman of the House Financial Services Committee, rolled out some of the details of a Republican proposal to replace the Dodd-Frank Act, the Financial CHOICE (Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs) Act. The proposal includes the text of a measure already passed by the House, which would provide a QM safe harbor for any mortgage that has been held in portfolio by a depository institution since origination.

House Financial Services Committee Chairman Jeb Hensarling, R-TX, detailed in a speech a proposal that House Republicans have been working on that would replace the Dodd-Frank Act, including some important changes that would scale back the powers of the CFPB. The bill would shift the agency’s mission to include both consumer protection and maintaining competitive markets, with a cost-benefit analysis of rules performed by an Office of Economic Analysis. Also, it would replace the current single director with a bipartisan, five-member commission which would be subject to congressional oversight and appropriations.

A partisan debate is brewing in the Senate over whether a more complex regulatory system could actually lead to increased systemic risk for U.S. banks even as House Republicans weigh proposals to eliminate financial and consumer protections under the Dodd-Frank Act. Discussions in the Senate Committee on Banking, Housing and Urban Affairs this week revolved around the Basel and Dodd-Frank capital and liquidity requirements and whether they are forcing big and small banks to focus more on safety and soundness instead of meeting the needs of consumers and the economy. Post-crisis financial regulations have become...

Calls for a GSE recapitalization are growing louder as industry groups and lawmakers urge Federal Housing Finance Agency Director Mel Watt to exercise his authority and suspend the Treasury Department’s sweep of Fannie Mae and Fannie Mac profits. Letters to the FHFA and Treasury last week came from a group of small lenders, affordable housing organizations and civil rights advocates, while a group of 32 Democrats on Capitol Hill also chimed in ...

Portfolio lenders would get an expanded safe harbor from litigation under the qualified mortgage standard in the Consumer Financial Protection Bureau’s ability-to-repay rule under a proposed Republican replacement of the controversial Dodd-Frank Act. “Our plan ... provides critically needed mortgage relief with reforms that let community banks back into the mortgage business and ensure qualified borrowers can purchase a home while preserving prudent underwriting standards,” said House Financial Services Committee Chairman Jeb Hensarling, R-TX, in a speech at the Economic Club of New York on Tuesday morning. “Changes include an ability-to-repay safe harbor for loans held on portfolio, ensuring the availability of mortgage credit for manufactured homes, fixing the way points and fees are calculated, and exempting small servicers from escrow requirements.” The proposal, the Financial CHOICE (Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs) Act, includes...

A growing number of mortgage-industry groups, housing interests and Democrats on Capitol Hill are urging the Federal Housing Finance Agency to allow Fannie Mae and Freddie Mac to begin to restore their capital bases, while others urge the FHFA to leave the matter to Congress. The Mortgage Bankers Association joined with four other groups this week in urging the FHFA to maintain the current state of conservatorship for the two government-sponsored enterprises and let Congress tackle broad mortgage-finance reform. “Absent reform, we run the risk of continuing to kick the can down the road without ensuring ongoing access to mortgage credit for millions of future homeowners,” the groups said. Joining the MBA were...

A bill making its way through the New York state legislature has prompted concerns among servicers and the Mortgage Bankers Association, who warn that the bill’s requirements regarding abandoned properties would increase costs and legal risks for servicers. A.6932-A, the Abandoned Property Neighborhood Relief Act, was recently approved by New York’s Assembly on a 116-22 vote. The bill would require servicers to periodically inspect properties tied to delinquent mortgages, report vacant properties to a state registry and provide authorities with tools to prompt servicers to maintain abandoned properties, among other provisions. “There is...