The Consumer Financial Protection Bureau’s first official budget – which will be funded by the Federal Reserve – segregates expenditures into three buckets, the lion’s share of which will go to the supervision, enforcement, fair lending and equal opportunity account. Outlays within this category are set to out-step the other two categories combined. After spending about $60 million in fiscal 2011, this SEFLEO bucket is set to climb to about $214 million for 2012 and $261 million next year. Consumer-related expenditures totaled $43 million in 2011 and are projected to roughly double ...

The Multi-State Mortgage Committee and the American Association of Residential Mortgage Regulators have issued Secure and Fair Enforcement for Mortgage Licensing Act (SAFE) Act Examination Guidelines for use by state nondepository mortgage regulators. The primary purpose of the guidelines is “to ensure that all individuals acting as mortgage loan originators are properly licensed and registered under the SAFE Act in all states in which they are conducting business,” said John Ducrest, commissioner of the Louisiana Office of Financial Institutions and chairman of the ...

The securitization industry told the Securities and Exchange Commission this week that certain rules might be needed to make sure transaction parties are not creating and selling ABS that are intentionally designed to fail or default and profiting from the failure or default of such securities. However, industry representatives urged the regulator to make sure that any such rules not be overly broad or vague or place undue restrictions or prohibitions upon the securitization market and otherwise impair its recovery. The SEC in September proposed a rule to implement provisions...

Excluding streamlined FHA refinancing from the “Compare Ratio” loan review process to facilitate refinancing of underwater non-agency mortgages, as proposed by the Obama administration, would make sense. At the margin, however, the proposal would increase Ginnie Mae prepayment speeds on higher-coupon borrowers, analysts cautioned. The proposal is part of a broader administration plan for housing recovery, which calls on Congress to provide non-agency borrowers with access to low-cost refinancing through FHA, and fully streamlined refinancing for borrowers with Fannie Mae or Freddie Mac loans. Underwater borrowers who opt for streamlined refinancing in either agency or non-agency programs would have ... [one data chart]

In an unusual legal development, the City of St. Paul, MN, late last week suddenly removed its challenge in a case before the Supreme Court of the United States that could have produced a definitive ruling on the disparate impact theory of lending discrimination under the Fair Housing Act. What’s unusual in Magner v. Gallagher is that the city believes it would have prevailed in the nation’s highest court – but opted to ask for dismissal because city leaders came to the conclusion that a victory could substantially undermine important civil rights enforcement in housing throughout the nation. The city expects to...

The Federal Housing Finance Agency’s own data prove that reducing the principal owed on underwater Fannie Mae and Freddie Mac loans would actually save taxpayers money, contrary to the agency’s position that writedowns are against taxpayer interests, according to House Democrats. In a letter last week to FHFA Acting Director Edward DeMarco, Reps. Elijah Cummings, D-MD, and John Tierney, D-MA, labeled the agency’s report justifying its policy against principal reduction as “seriously deficient and misleading.” “We understand that the FHFA is not part of the Obama administration, and that you do not take...

The Consumer Financial Protection Bureau is on course to spend nearly half a billion dollars in 2013, half of which is projected to be devoted to supervision and enforcement, according to the budget proposal released by the Obama administration this week. The CFPB breaks down its expenditures into three categories, the largest of which is devoted to supervision, enforcement, fair lending and equal opportunity (SEFLEO), with projected funding to exceed the other two categories combined. After spending approximately $60 million in 2011, the SEFLEO bucket is budgeted at $214 million for 2012 and $261...

Congress should consider changing the mandate of the Federal Housing Finance Agency’s conservatorship of Fannie Mae and Freddie Mac to address a “conflict of interest” that inhibits the Finance Agency’s supervision of the GSEs, a housing economist told senators this week.Testifying before the Senate Committee on Banking, Housing and Urban Affairs, Columbia School of Business Professor Christopher Mayer said a significant problem with the ongoing operation of the GSEs has been the failure to adequately address operational conflicts.“The evidence suggests that the conflict of interest between the businesses of providing mortgage guarantees and managing a large retained portfolio of mortgages and [mortgage-backed securities] has led to obstacles to normal credit conditions,” said Mayer.

House Democrats doubled down on their ongoing feud with the head of the Federal Housing Finance Agency this week as they demand answers from the GSE regulator about a previously unknown 2010 Fannie Mae pilot program to forgive borrower’s mortgage debt that was shelved due to what Dems say was a philosophical opposition to loan writedowns.In a letter to FHFA Acting Director Edward DeMarco, Reps. Elijah Cummings, D-MD, and John Tierney, D-MA, of the House Committee on Oversight and Reform, accused the agency head of being less than forthright in his response to lawmakers justifying the FHFA’s position against the writedown of underwater GSE mortgages.“The single most significant revelation in your letter to Congress is that, even based on your own questionable assumptions and data, principal reduction programs serve the taxpayer interests even when compared to your preferred alternative of forbearance,” said Cummings and Tierney.

The Federal Housing Finance Agency has made a number of minor but important changes to its existing Freedom of Information Act regulations.On Jan. 31, the Finance Agency published in the Federal Register updates to its FOIA regulations to include the FHFA Office of Inspector General. The FHFA-OIG, which came into existence in October 2010, did not exist when FHFA’s original FOIA regulations were issued in 2009.The FHFA final regulation lists the various revisions to the agency’s 2009 FOIA regulation, as well as describes what information is exempt from disclosure.