Compliance & Regulation

Federal regulators need to create a definition for "qualified residential mortgage" that is safe for homebuyers, but not so safe that it funnels most of the business into the Federal Housing Administration insurance program.

Three U.S. senators are urging federal regulators to consider industry analysis of the default risks on certain loan products and features in drafting a rule that will exempt "qualified residential mortgages" from risk retention rules.

Mortgage underwriting standards have become "excessively tight" and the Federal Housing Administration and GSEs need to "reassess and amend their policies," according to the National Association of Realtors

Industry groups want the Federal Reserve and the Department of Housing and Urban Development to make the merger of the TILA and RESPA mortgage disclosures a "first priority" and halt other related rule changes.

The President's bi-partisan commission on deficit reduction wants to cap the mortgage interest deduction at $500,000 — a 50% reduction from current tax rules, according to a proposal released late Wednesday afternoon.

Federal regulators should allow three-year ARMs and certain interest-only loans to be classified as "qualified mortgages" that will be exempt from risk retention rules, according to the Mortgage Bankers Association.

The National Credit Union Administration this week said CUs must accept alternative, non-traditional credit reports at a member's request when deciding on the borrower's creditworthiness. (In credit union parlance, customers of an institution are referred to as 'members.')

The White House wants the Federal Housing Administration to enter the business of co-insuring small loans to finance energy-saving home improvements.

The Federal Deposit Insurance Corp. is abandoning its current assessment system of charging premiums based on an insured-institution's deposits, moving toward a system based on asset size.

Mortgage insurer Genworth Financial said it is now accepting FHA appraisals as part of its conventional mortgage underwriting process, a move designed to save borrowers — and lenders — time and money.