Compliance & Regulation

Federal regulators took another step last week toward lessening banks' reliance on credit ratings by proposing three methods for assessing risk on firms' trading books.

The drop over 3Q11 of commercial and multifamily loans is a credit positive for CMBS, according to Standard & Poor's in a note released Friday.

The Consumer Financial Protection Bureau had so far limited its complaint process to just credit cards. But CFPB began taking complaints related to home mortgages as of Dec. 1.

Recent Congressional efforts to begin serious discussion of a gradual transition to greater private capital participation in housing finance and greater distribution of risk to participants other than the government are important. FHFA has already begun taking actions in support of these objectives.

Among the many hurdles any return of the private-label securitized market will likely have to overcome are conflict of interest measures in Section 619 of Dodd-Frank and the Volcker Rule, which as noted in a recent American Securitization Forum seminar, are hitting some key deadlines this month and next year.

The Consumer Financial Protection Bureau's authority to finalize an "ability to repay" standard for lenders is being questioned, a situation that likely will slow efforts by other regulators working on a rule that exempts certain high qualify mortgages from risk retention.

Congress has handed the Federal Housing Administration a golden opportunity to increase its share of the jumbo mortgage market, but HUD secretary Shaun Donovan doesn’t want to exploit the situation.

Fannie Mae recently told its seller/servicers that all mortgage insurance rescissions, cancellations and claim denials tied to loans it bought must be reported to the agency immediately.

An industry hedge fund that selectively trades distressed mortgage assets is testing the use of borrower rewards for timely payment, with the aim of driving better performance, refinancing or modifications.

Just seven months ago, Democrats appeared to be boxed in, unable to confirm a leader to the Consumer Financial Protection Bureau without agreeing to demands from Senate Republicans to overhaul the agency's structure.