On July 13, the CFPB announced that the FFIEC and HUD had published new resources for financial institutions required to file data pursuant to the Home Mortgage Disclosure Act (HMDA) and Regulation C, as amended by the CFPB’s October 2015 final rule, which revised and expanded the scope of HMDA reporting requirements. Accordingly, the CFPB updated its “Resources for HMDA filers” page to include the following new FFIEC and HUD resources: (i) a Technology Preview, which provides an initial summary for how HMDA filers will interact with the HMDA Platform, a web-based data submission and edit-check system that filers will use to submit HMDA data collected in or after 2017; (ii) Filing Instructions Guide (FIG) for HMDA data collected in 2017, which outlines changes to the submission process for data collected in 2017, 2017 file specifications, and 2017 edit specifications; and (iii) FIG for HMDA data collected in 2018. The 2018 FIG includes field definitions for the many additional or modified data points required for data collected in 2018 and 2018 file format and edit specifications. The technical specifications in the FIG will allow lenders and vendors of HMDA data-preparation software to begin making the systems changes needed to collect data in 2018 for submission in 2019. The CFPB’s HMDA resource page also includes FFIEC HMDA FAQs and reminds financial institutions to visit the FFIEC website for resources to submit data collected in or before 2016.
On July 18, FHA’s Edward Golding issued a letter sharing HUD Secretary Nani Coloretti’s statement regarding recent events surrounding down payment assistance (DPA) programs. As previously covered in InfoBytes, Golding sent a letter on May 25 to stakeholders informing them that HUD had “determined that finance agency [DPA] programs are legal and consistent with the National Housing Act.” According to the recent July 18 letter, Secretary Coloretti wishes to make clear that HUD does not endorse unlawful practices. She also noted that the HUD Office of Inspector General (OIG) continues to investigate alleged inappropriate practices and that HUD will look separately into “the extent to which government-sponsored Down Payment Assistance (DPA) programs fully informed borrowers of the loan terms, or imposed inappropriate fees or costs, or enabled steering or any other coercion of borrowers.” Coloretti also reiterated that HUD supports DPA Programs and that they “enable access to credit that allows American families to purchase homes.”
Recently, the Massachusetts Division of Banks released its annual report for year-end 2015. The report provides a broad overview of the Division’s 2015 efforts related to, among other things, foreclosure relief, cybersecurity protection, mortgage and depository supervision, and corporate transactions. Notable 2015 updates outlined in the report include the Division (i) approving 24 new mortgage companies in 2015, which resulted in 497 mortgage brokers and lenders being licensed to do business in Massachusetts; (ii) expanding its coordination, cooperation, and participation with the CFPB, Multi-state Mortgage Committee, and the New England Regional Mortgage Committee through sharing information in concurrent examinations of non-depository mortgage entities; and (iii) increasing oversight of the financial industry’s information technology environment, including collaborating with the Conference of State Bank Supervisors to host an event for Massachusetts bankers about common cybersecurity situations. The report includes objectives for 2016, including such as implementing and enforcing “consumer protection laws and regulations while providing consumers the information they need to know their rights and make informed financial decisions.”
On July 18, the National Community Reinvestment Coalition (NCRC) released a report analyzing data related to mortgage lending in St. Louis, Milwaukee, Minneapolis, and surrounding areas. According to the report, low- and moderate-income neighborhoods and predominantly minority neighborhoods lack access to mortgage credit. The report makes various key findings, including that: (i) the racial composition of neighborhoods in St. Louis and Milwaukee is a predictor of mortgage activity, with lending allegedly greater in predominantly white populated neighborhoods than in predominantly African American neighborhoods; (ii) 70 percent of the Milwaukee Metropolitan statistical area population is white and receives 81 percent of the loans, while African Americans make up 16 percent of the population and receive four percent of the loans; and (iii) median family income of a neighborhood is the variable that best predicts home loan activity in Minneapolis. The report follows a similar analysis of alleged racial disparities in mortgage lending in Baltimore, Maryland released by NCRC last year.
On July 7, the FHFA released an update entitled An Update: An Implementation of the Single Security and the Common Securitization Platform (the Update) regarding Fannie Mae’s and Freddie Mac’s (collectively, the GSEs) joint venture – Common Securitization Solutions (CSS) – to develop and implement a Common Securitization Platform (CSP). As part of a multi-year initiative beginning as early as February 2012, the FHFA has been developing and reporting on the principles and functions for a new securitization platform that supports single-family residential mortgage-backed securitization activities guaranteed by the GSEs. FHFA’s recently issued Update outlines the CSS’s progress made to date, describes expected upcoming milestones, and summarizes the various phases of required testing for Release 1 and Release 2 of the CSP. Importantly, Release 1 will allow Freddie Mac to use the CSP and its Data Acceptance, Issuance Support, and Bond Administration modules to “perform activities related to its current single-class, fixed-rate securities—Participation Certifications (PCs) and Giant PCs—and certain activities related to the underlying mortgage loans (such as tracking unpaid principal balances).” Release 2 will allow both GSEs to use the CSP’s Data Acceptance, Issuance Support, Disclosure, and Bond Administration modules to “perform activities related to their current fixed-rate securities, both single- and multi-class; to issue Single Securities, including commingled resecuritizations; and to perform activities related to the underlying loans,” as well as to allow the GSEs to use the CSP “to issue and administer certain non-TBA mortgage securities, including Fannie Mae securities backed by adjustable rate mortgages.” According to the Update, the Single Security features of the CSP described in the FHFA’s May 2015 update have not been altered and are final. The Single Security features are fundamentally the same as those of the current Fannie Mae MBS and include: (i) payment delay of 55 days; (ii) certain pooling prefixes; (iii) mortgage coupon pooling requirements; (iv) minimum pool submission amounts; (v) general loan requirements such as first lien position, good title, and non-delinquent status; and (vi) seasoning requirements. As outlined in FHFA’s December 2015 publication of the 2016 Scorecard for Fannie Mae, Freddie Mac, and Common Securitization Solutions, the GSEs are expected to implement Release 1 in 2016 and Release 2 in 2018.