HUD Publishes Disparate Impact Rule in the Federal Register
On Friday, February 15, 2013, the Department of Housing and Urban Development (HUD) published its final disparate impact rule in the Federal Register. The rule has an effective date of 30 days from this date, or March 18, 2013. The rule formalizes HUD’s interpretation that disparate impact is a valid cause of action under the Fair Housing Act and introduces a burden-shifting framework to govern litigation. Please see MBA’s attached early summary of the rule.
MBA Hosts Successful Webinar on CFPB’s National Servicing Standards
On Thursday, February 14, 2013, MBA hosted a successful webinar, providing members with an overview of the Consumer Financial Protection Bureau’s (CFPB) final mortgage servicing rules. It was a sold out event — more than 400 MBA members participated in the webinar. The final rules not only implement the Dodd-Frank Act, but also add a variety of new RESPA (Regulation X) and TILA (Regulation Z) provisions that are far-reaching for both performing and delinquent servicing. The webinar addressed key provisions of the final rule so that servicers may begin adjusting their practices and procedures in anticipation of the January 10, 2014 effective date. An email will be sent next week to all MBA members regarding instructions on how to access the recording and presentation from this webinar.
MBA Hosts Meeting With Other Financial Trade Associations on Basel III
On Wednesday, February 13, 2013, MBA hosted a meeting with other financial industry trade associations to discuss next advocacy steps on Basel III. From comments made by representatives of the Federal Reserve System recently, it appears that the Department of the Treasury, the Office of the Comptroller of the Currency, the Federal Insurance Deposit Corporation and the Board of Governors of the Federal Reserve System (the Regulators) are trying to finalize the rule this Spring. MBA is also hearing that the Regulators are reluctant to change the adverse treatment of mortgage servicing rights in the proposed rule. The group decided during the meeting to put together a joint letter requesting that the Regulators hold a series of roundtable discussions and that the Regulators go through another notice and comment regime.
MBA’s 2013 National Fraud Issues Conference Coming in April
This year’s MBA National Fraud Issues Conference will be held from April 14-17, 2013, in Hollywood-Fort Lauderdale, Florida. The Conference will bring together mortgage fraud executives, managers, investigators, attorneys and industry venders, as well as government officials from the federal and state levels to discuss prevention, detection and investigation efforts in pre-closing and closing and during the life of the loan. Panelists will also address the current and evolving environment of mortgage fraud in the context of limited credit availability, repurchase investigations and greater regulatory scrutiny. Please register by March 1, 2013, before rates go up.
MBA’s 2013 National Advocacy Conference Coming in April
MBA’s 2013 National Advocacy Conference will take place April 24-25, 2013, in Washington, DC. To register for the Conference, please click here. For more information, please contact Kelley Williams, (202) 557-2777 or Annie Gawkowski, (202) 557-2816. To enroll in the Mortgage Action Alliance (MAA), please click here.
Senate Banking Committee Holds Oversight Hearing on the Dodd-Frank Act
On Thursday, February 14, 2013, the Senate Banking Committee held an oversight hearing on the Dodd-Frank Act. Notably, the hearing’s witnesses included Mary Miller, Undersecretary for Domestic Finance, U.S. Department of the Treasury; Daniel Tarullo, Governor of the Federal Reserve System; Martin Gruenberg, Chairman, Federal Deposit Insurance Corporation; Tom Curry, Comptroller of the Currency; Richard Cordray, Director, Consumer Financial Protection Bureau; Elisse Walter, Chairman, U.S. Securities and Exchange Commission; and Gary Gensler, Chairman, U.S. Commodity Futures Trading Commission. While the hearing focused on a number of Dodd-Frank related issues, there were several key exchanges of importance for MBA’s members. During his questioning, Chairman Tim Johnson (D-SD) asked the witnesses if there was anything in the law that prohibited the Qualified Residential Mortgage (QRM) from being defined the same as the Qualified Mortgage (QM). The witnesses all agreed there was no bar to defining QM and QRM the same.
Additionally, Governor Tarullo and Comptroller Curry both stated that the QRM should be defined in a way that does not restrict credit for lower and middle class borrowers, and that an aligning of the two rules should be a consideration. Ranking Member Mike Crapo (R-ID) also expressed concern about the cumulative impact of Dodd-Frank and Basel III on the financial markets, including the mortgage markets. Ranking Member Crapo was specifically concerned that the interaction between QM, QRM and the Basel III risk-weighting will reduce mortgage credit for otherwise qualified borrowers. Mr. Crapo asked that the regulator witnesses perform meaningful cost-benefit analysis to better understand how these rules will affect the economy as a whole, how the rules interact with one other, and how the rules impact our global competitiveness. Finally, Senator Kay Hagan (D-NC) asked the witnesses what the timetable was for the release of the final risk retention rule, to which they said they hoped to release the rule in the first half of this year.
FHA Commissioner Galante Testifies Before Financial Services Committee
On Wednesday, February 13, 2013, the full House Financial Services Committee held a hearing entitled “Bailout, Bust, or Much Ado About Nothing?: A Look At The Federal Housing Administration’s 2012 Actuarial Report.” The sole witness on the panel was Federal Housing Administration (FHA) Commissioner/Assistant Secretary for Housing Carol Galante. The overriding GOP message was that the FHA’s lending practices are inconsistent with their original mission, and that its financial viability is very much in question. Republicans on the Committee are committed to widespread reforms of FHA while Democrats have pointed to a number of administrative actions that FHA has taken recently to address the health of the Mutual Mortgage Insurance Fund (MMIF). This hearing is the second in a series on the topic of FHA reform.
CFPB Issues Guidance for Servicing Transfers
On Monday, February 11, 2013, the Consumer Financial Protection Bureau (CFPB) issued guidance to residential mortgage servicers and sub-servicers to address potential risks to consumers that may arise in connection with transfers of servicing. Servicers engaged in significant servicing transfers should expect that the CFPB will, in appropriate cases, require them to prepare and submit informational plans describing how they will be managing the related risks to consumers. The guidance also indicates that examiners will focus on compliance with Regulation X, the Fair Debt Collection Practices Act, the Fair Credit Reporting Act, and other appropriate laws in connection with servicing transfers.
