Risk Management Archive
A roundup of comments on our Editor at Large blog, from the best and brightest to the not-so-bright.
The proposed federal mortgage guarantor in the Senate reform bill needs 5% hard equity to protect taxpayers, but 10% capital to pass Congress, the Housing Policy Council's John Dalton reckons.
The Senate GSE reform bill may bloat the bureaucracy, encourage risky behavior and expose taxpayers to losses, without sufficient support for affordable housing. That could still be better than nothing.
Lenders and Realtors are hailing a new law that delays flood insurance premium increases, but unless the government takes actuarially prudent measures, rising sea levels could cost taxpayers dearly.
The Consumer Financial Protection Bureau prohibits actions aimed at circumventing loan officer compensation rules. One example was a lender who permitted teams of LOs to share commissions.
The CFPB report for full year 2013 shows that there were over 160,000 complaints to the bureau from homeowners, of which 60,000 were complaints about the mortgage process.
Charlie Keating, who died Tuesday, epitomized an era today's mortgage lenders would do well to remember as low-yielding portfolio assets tempt them to take bigger risks.
The lender can experience problems selling a loan that loses qualified mortgage rule's protection. The lender also could be stuck in a vulnerable position if that loan ultimately defaults.
Farmers have been benefiting from steady increases in commodity prices in recent years, partly driven by extreme weather. But the underpinnings of that growth seem to be on the wane.
Lenders should avoid repeated mistakes in their process as they could be used as evidence of a fraudulent intention to originate loans without proper safeguards and underwriting processes.
The best thing to happen to the business over the last three decades was the development of the secondary agencies' automated underwriting engines. The worst? There are several strong contenders
Lenders don't want to make loans outside the Qualified Mortgage rule's tight debt-to-income standard. Young graduates don't want to add to their hefty monthly payments. Net effect: Fewer first-time buyers.
As interest rates increase, prepayment speeds are falling precipitously, extending the maturities of mortgage-backed securities, especially the guaranteed variety. This trend is likely to cause future declines in MBS values.
A technical reading of the rule supports excluding charges by a broker's title affiliate from the 3% fee cap. But without a specific interpretation from the CFPB, it would be unwise to risk a loan's QM status.
Capital One Financial Corp., the bank that gets more than half of its revenue from credit cards, received subpoenas and information requests from U.S. authorities investigating mortgage fraud.