Servicing Newslinks Archive

“We continue to see improvement in the overall mortgage delinquency rate as the impact of the hurricanes from one year ago lessens, particularly for conventional loans.”–Marina Walsh, MBA Vice President of Industry Analysis.

“It’s a very favorable court ruling as the alternative would have been incredibly disruptive. A different decision might have impaired or invalidated foreclosures because of the licensing question and added significant costs as the secondary market scrambled to figure out how to apply the decision.”–Justin Wiseman, MBA Associate Vice President and Managing Regulatory Counsel, on a recent court ruling in Maryland that consumer protections in in a regulatory act are not applicable to passive statutory trusts that have no consumer interactions.

“These ‘orphaned’ loans cannot be delivered to Ginnie Mae despite carrying a valid VA guaranty and being fully compliant with the requirements in place at the time the applications were taken and (in some cases) the loans were closed. This situation has caused liquidity strains for some lenders, particularly if they have originated a significant volume of affected loans.”–From MBA testimony submitted to the Senate Veterans Affairs Committee on Ginnie Mae mortgage-backed securities.

“The lack of final rules continue to create capital planning challenges for many banks due to lack of certainty on several issues.”–MBA Senior Vice President of Public Policy and Industry Relations Stephen O’Connor, in a letter to federal regulatory agencies.

“The overwhelming majority of mortgage-related complaints are the product of misunderstandings rather than company mistakes or instances of wrongdoing. Given that they were satisfactorily resolved with an explanation, these mortgage-related complaints are much more akin to consumer inquiries. Unfortunately, they are not treated like consumer inquiries. They are classified as complaints and carry all the obvious negative connotations associated with the term ‘complaint.’ They are displayed on the public-facing complaint database alongside valid complaints based on actual regulatory violations.”–From an MBA letter to the Consumer Financial Protection Bureau offering recommendations to improve the Bureau’s Complaint Database.

“By prohibiting a subset of VA-guaranteed refinances from serving as collateral for Ginnie Mae MBS, HUD’s determination effectively ‘orphans’ these loans, reducing their liquidity and lowering their market value. As such, the lenders that originated these loans in accordance with the VA and Ginnie Mae requirements in place at the time will likely take losses, which in some cases may be substantial.”–From an MBA letter to HUD regarding its treatment of certain mortgage-backed securities under the recently passed Economic Growth, Regulatory Relief and Consumer Protection Act.

“The value of Bureau guidance materials lies in their reliability. Unfortunately, the Bureau’s practice of using disclaimers to make guidance non-binding on the Bureau erodes much of its reliability. Regulated entities must be able to rely on guidance to ensure they are operating within the rules. MBA therefore asks that the Bureau stand by its guidance and use disclaimers only when absolutely necessary and provide the rationale for doing so.”–MBA Senior Vice President of Residential Policy and Member Engagement Pete Mills, in a letter to the Consumer Financial Protection Bureau.

“The industry has undergone significant changes in the decades since these rules were first conceived. Recent advances in technology have only quickened the pace of change. The Bureau must ensure its regulations and regulatory guidance reflect these changes. In the past, the Bureau billed itself as a 21st century agency. In accordance with its mandate, the Bureau should endeavor to create 21st century rules.”–MBA Senior Vice President for Public Policy and Industry Relations Steve O’Connor, in a letter to the Consumer Financial Protection Bureau.

“The Administration’s proposal to reform Fannie Mae and Freddie Mac closely tracks much of the work that has been done to date by policymakers on Capitol Hill. It includes many core principles that MBA has long advocated for, such as an explicit government guarantee on [mortgage-backed securities] only as a catastrophic backstop, allowing for multiple guarantors and ensuring small lender access. MBA is heartened that the proposal recognizes that reform must be part of any plan before either Fannie Mae or Freddie Mac is released from conservatorship.”–MBA President and CEO David Stevens, CMB, on an Administration proposal to end conservatorship of the government-sponsored enterprises and privatize Fannie Mae and Freddie Mac.

“Establishing a formal ‘rule on rules’ would guide the Bureau today and in the future. Such a rule would help ensure the Bureau does a better job of protecting consumers and decreasing unnecessary costs through rules and guidance rather than, as in the past, simply using enforcement cases to articulate standards.”–From an MBA letter to the Consumer Financial Protection Bureau on its rulemaking process.