January 10, 2018

Regulators Seek Interpretation Amendments on Home Equity Lending; Urge Caution in Making Loans Before Adoption

Joint Statement | Nov. 15, 2017
As home equity lending changes become reality, state regulatory authorities have proposed interpretation amendments to clarify the finer points of SJR 60. The amendments, published in the Texas Register on Nov. 24, 2017 are expected to be presented for final adoption at the February and March meetings of the Finance Commission and Credit Union Commission with an expected effective date in late March.
In the meantime, the agencies cautioned lenders about making home equity loans during the first 12 days of January due to an attorney general opinion (DM-452, 1997) on the 12-day notice requirement. They also cautioned that lenders can't rely on proposed interpretation amendments before they are approved in March, therefore leaving lenders without interpretive guidance in the meantime. 
Proposed SJR 60 Interpretation Amendments »
Joint Financial Regulatory Agencies Statement »

Congress Returns to Work: Is 2018 the Year for Dodd-Frank Reform?

James E. Hyland, Esq. | The Pennsylvania Group and TLTA Federal Legislative Counsel | Jan. 8, 2018
Congress returns to work this week to begin the Second Session of the 115th Congress. They will face a number of budget and immigration issues almost immediately, with government funding due to expire on Jan. 19 without a continuing resolution or larger budget agreement. 

What's on the horizon:

  • 2018 may be the year when some progress is made on reforming Dodd-Frank
  • Jeb Hensarling's top three priorities including GSE reform
  • The search for a permanent CFBP head

CFPB News: Kirsten Sutton Mork Named Chief of Staff

Reuters | Jan. 5, 2018
A top staffer for one of the most vocal U.S. congressional critics of the Consumer Financial Protection Bureau was named on Friday as the watchdog’s chief of staff as it undergoes a major transformation under the Trump administration.

Kirsten Sutton Mork, former staff director for the House Financial Services Committee, will assume the role “in the coming weeks,” Rep. Jeb Hensarling, who chairs that panel, said in a statement. He is one of the CFPB’s most vociferous critics.
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Fannie Mae and Freddie Mac Now Allowed to Hold $3B Capital Reserve

HousingWire | Dec. 21, 2017
With tax reform set to go into effect in 2018, Fannie Mae and Freddie Mac faced a possible one-time Treasury draw due to the change in corporate tax rate and the zero-capital mandate.

The Federal Housing Finance Agency announced each government-sponsored enterprise is entitled to a $3 billion capital reserve. This can be used as a cushion against expenses, should they occur, such as the scenario listed above.
Also in exchange for the capital cushion change, Treasury gets an additional $3 billion a piece in senior preferred stock as of Dec. 31, 2017, according to Jim Vogel, analyst at FTN Financial.

"Bottom Line: This agreement delivers an acceptable win for both sides," said Vogel. 
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Mortgage Rates to Increase Past 4.5 Percent in 2018

HousingWire | Jan. 3, 2018
The Federal Reserve is expected to increase mortgage rates up to three or four times in 2018, which could push 30-year mortgage rates up past 4 percent in 2018. 

The Mortgage Bankers Association predicted mortgage rates will increase, but they will stay below 5 percent. The National Association of Realtors’ forecast was similar, saying it expects interest rates to end the year at 4.5 percent.
Read More »

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