Provisions of Reg Reform Bill
The Dodd-Frank Wall Street Reform Bill was awaiting a vote in the Senate as Mortgage Servicing News went to press this month. The bill contains the following provisions that impact the mortgage industry. These provisions would:
* Require MBS issuers to retain up to 5% of the credit risk on conventional mortgages that don't a meet a "qualified" mortgage test.
* Create a Consumer Financial Protection Bureau with rule-making authority over all mortgage lenders and explicated enforcement authority over nonbank or independent mortgage bankers, mortgage brokers and servicers.
* Establish a national consumer hotline so consumers can report problems with financial products and services.
* Instruct federal regulators to establish minimum mortgage underwriting standards along with loan officer and mortgage broker compensation standards.
* Require lenders to disclose the borrower's credit score when they reject a mortgage application.
* Lower the interest rate and points/fee trigger for HOEPA loans.
* Abolish the Office of Thrift Supervision and transfer supervision of federally chartered thrifts into the Office of the Comptroller of the Currency.
* Mandate federal or state regulation of appraisal management companies and require AMCs to pay appraisers their "customary" fee.
* Direct the Federal Reserve Board to examine the mortgage banking subsidiaries of the bank holding companies.
* Provide $1 billion for a program to help unemployed homeowners pay their mortgages and $1 billion to help cities and municipalities renovate foreclosed and abandoned houses.
* Raise the $100,000 deposit insurance limit to $250,000 and lower FDIC insurance premiums for community banks.
* Strengthen the Securities and Exchange Commission's oversight of the credit rating agencies.
* Preserve the Federal Trade Commission's existing consumer protection mandate and direct the FTC to work with the Consumer Financial Protection Bureau to avoid duplicative regulation of the same businesses.