Compliance & Regulation

An investment banking firm is warning federal regulators that a congressional mandate to stop relying on the credit ratings of Standard & Poor's and other agencies could be disruptive to the MBS market and increase capital requirements for depository institutions.

Even if the GOP gains a chamber in the upcoming federal elections, chances are the Dodd-Frank legislation will not be changed in any substantive way, according to the top lobbyist for the Mortgage Bankers Association.

Federal Housing Administration Commissioner David Stevens urged mortgage bankers to become more engaged in Obama Administration programs designed to stop the bleeding in the housing market and embrace regulatory and legislative changes to boost consumer confidence.

It's unlikely the government will release its grip on the housing market any time soon, the head of Freddie Mac told residential finance executives and vendors.

WASHINGTON—David Stevens has been a busy man during his first 16 months on the job. Under his lead, the FHA has implemented a whirlwind of reforms, including higher net worth requirements for government-approved lenders, steeper downpayments for borrowers with low FICO scores, and a new mortgage insurance premium structure that was approved by Congress. And he’s not done yet.

Some lenders are taking reforms in the Federal Housing Administration credit policies too far, shutting the door on otherwise good candidates for home ownership, FHA Commissioner David Stevens said in Atlanta at the Mortgage Bankers Association's annual convention.

The Federal Home Loan Bank of Seattle entered into a consent order with the Federal Housing Finance Agency late Monday that requires the bank to take certain steps to improve its capital position and its business and operations.

The robo-gate fiasco is more about faulty internal processes on the part of overwhelmed loan servicers than it is with the securitization of mortgages, a panel of key secondary market executive agreed at the Mortgage Bankers Association's convention in Atlanta. They also said the quicker lenders and investors address the problem, the better off they'll be.

If servicing and processing problems continue to bog down foreclosures, there should be a way to permit "necessary and justified" foreclosures to continue, according to FDIC chairman Sheila Bair.

Lenders should face penalties for violating representation and warranty clauses — beyond their obligation to re-purchase the loans — according to an expert in managing risk on mortgage-backed securities.