Lower rates of return would require insurers to charge higher premiums or stop covering loans to borrowers with lower credit scores. (You know, the ones the government wants to help?)
"We are jumping through hoops every day to comply with regulations," said Mike McHugh, the president and CEO of Continental Home Loans, in Melville, N.Y.
Independent mortgage lenders are concerned that regulators will use the report as an excuse to raise minimum net worth requirements for smaller lenders.
The Atlanta bank's CEO sounds upbeat on the mortgage and housing markets. Unlike JPMorgan Chase, SunTrust appears to be committed to the FHA lending business following a large government settlement.
The CFPB worries that mini-correspondent lenders are circumventing its qualified mortgage rule. But a large number of mortgage brokers converted to mini-correspondents because the rule made it harder to operate as a broker.
The Federal Home Loan Bank of Chicago is launching a pilot program soon to buy home loans and issue Ginnie Mae securities. The program could allow community banks and credit unions to stay in the mortgage business.
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The CFPB's guidance provides no specific rules or bright lines – leaving the agency the flexibility to call it how it sees it and reflecting a desire to regulate through enforcement, writes Ari Karen.
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