Currently, MSRs can only account for 10 percent of Tier I capital, but MBA thinks it should be raised to at least 25 percent for banks, and 50 percent for thrifts and savings and loans.
Another suggestion is to increase the $100,000 threshold for “smaller loans” to $200,000 allowing for mortgage amounts beneath that level to be subject to more workable points-and-fees limits.
Committee Chairman Jeb Hensarling, R-TX, cited a letter from a mortgage banking constituent who said his company is being forced out of the residential lending business because of the cost and complexity of regulatory compliance.
Mortgage bankers have been complaining loudly about escalating compliance costs since the CFPB opened its doors in 2011. Some smaller nonbanks have cited those rising costs as one reason they might be forced to merge with better capitalized institutions.
“Bank, nonbank – it doesn’t matter to us. We look at where the risk to the consumer is and we try to execute our program against that,” said Peggy Twohig, assistant director in the CFPB’s Office of Supervision Policy.
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Addressing CFPB officials at the American Bankers Association’s government relations conference in Washington, one community banker from Oklahoma reported survey findings that one-third of respondents in the state are no longer offering residential mortgages.
CFPB watchers say the bureau’s broad examination authority and a database of more than 300,000 consumer complaints will provide a fertile pipeline for enforcement actions going forward.
Under the proposed rule, participating states would require that an AMC register in the state and be subject to its supervision. Only state-certified or licensed appraisers would be allowed to participate in federally related transactions, such as the closing of a home mortgage.