As everyone attending the MBA National Mortgage Servicing Conference & Expo returns to their desks, we look at the continued uncertainty of the Residential Mortgage Backed Security market (RMBS). What looks like a comeback for 2017, based on rising interest rates, may be temporarily stalled as the Federal Open Market Committee decided to keep the Fed Funds rate at 0.75 percent at the January 31-February 1 FOMC meeting. Although not an unforeseen outcome, it causes the market to lose confidence in the Fed’s publicized goal to impose three quarter-point increases in 2017 if unemployment and inflation remain under control.
The end of 2016 heralded in extensive regulatory guidance on loan modification alternatives to the Home Affordable Mortgage Program (HAMP). Established by the US Department of the Treasury (DOT) in 2009 in an effort to standardize mortgage modifications, HAMP was retired on December 31, 2016 after providing nearly $10.5 million in consumer relief necessitated in response to the financial crisis. The sunset of this first and largest loan modification program is an important landmark for the mortgage industry, but will place additional stress on already scrutinized servicer and investor loss mitigation processes.
Late last year, at the Mortgage Bankers Association Annual Conference and Expo, attendees were asked, “What is most important in moving our industry forward?”. There were 5 clear trending topics from the answers received, with each item having its unique impact on the industry and your organization.
The start of a new year symbolically represents a restart or clean slate to make this year the best year yet. We make resolutions to set our path for success and to create accountability. We join a gym to exercise more, buy fruits and vegetables to eat healthier, and create budgets to spend less. We focus our efforts on creating a new you in the New Year. Have you ever thought to create New Year’s resolutions for your organization? Just as we set up ourselves for success in the New Year, we should do the same in business. Here are a few resolutions to consider to help make this the best year yet for your organization.
The Healthcare industry has been advancing quickly into the digital age. Having a mobile strategy is just one part of it. With the introduction of electronic medical record systems and the ongoing integration of technology into the continuum of care, there has been an explosion of software and hardware products and solutions. Along with that, comes the dreaded task of selecting the “right” tool for the job. The options that are available range from the simple to the complex, free to costly and innovative and modern to established. The task can quickly become overwhelming.
Payday loans are at the top of the regulator “hot” list this year, with a recent proposed rule issued by the Consumer Financial Protection Bureau (CFPB) in late July. The CFPB is working to create regulation that ensures the consumer’s ability-to-repay (ATR) and puts a stop to abusive and unfair practices in this area. The growing number of consumers that gravitate to loans when they are short on liquid funds continues to rise, which has elicited regulator attention. Due to extremely short loan terms, many of these products currently bypass regulator purview. The CFPB’s rule redefines loans “covered” by oversight as those with terms of 45 days or less, or with multiple advances requiring repayment within 45 days. The goal is to address payday loans, vehicle title loans and other high cost short-term loans.
Our partners at Sapiens DECISION hosted a webinar on “How Decision Management Drives Transformation Projects,” with insights into the financial crisis and how technology transformation was required post-crisis and will continue to be required across all industries to help avoid a repeat of 2008. The presenters included Kramer Reeves, VP of Product Marketing at Sapiens DECISION and Larry Goldberg, the evangelist for Sapiens DECISION.
As the mortgage industry prepares to say goodbye to the Home Affordable Modification Program (HAMP), the largest Making Home Affordable (MHA) program, numerous regulators are issuing loss mitigation guidance to ensure post financial crisis accomplishments are not lost. The US Department of Treasury released a white paper in collaboration with the US Department of Housing and Urban Development (HUD) and the Federal Housing Finance Agency (FHFA) that provides an in-depth look into the development of foreclosure alternatives, lessons learned and five guiding principles for the future of loss mitigation. The Consumer Financial Protection Bureau (CFPB) followed suit with a brief summary of their perspective on mortgage default, offering four guiding principles for post financial crisis servicing.
The recent release of hospital ratings by the Centers for Medicare and Medicaid Services (CMS) has generated a less than positive buzz amongst hospital administrators. The CMS rates hospital performance based on a five-star quality rating system that is designed to assist patients, family members and caregivers when comparing hospitals and other healthcare facilities. Although CMS has been measuring care for over a decade, the current overall hospital quality star rating program presents a new methodology that has been met with considerable criticism across the industry.
A mere nine months post implementation and five webinars later, the Consumer Financial Protection Bureau (CFPB) announced proposed amendments to the Truth in Lending Act (TILA), Real Estate Settlement and Procedures Act (RESPA) Integrated Disclosures (TRID) rule on the last business day of July. Intended to “formalize guidance in the rule, and provide greater clarity and certainty,” the 293-page document is not quite what the industry expected, which means lenders and vendors still have unanswered questions and clarification needs that will continue to impact loan production. Under the current rule, the fear of being non-compliant, or worse subject to enforcement action, has kept a number of lenders from conducting business in areas that are not clear under TRID. Two examples being construction lending and housing finance lending. Although the CFPB is proposing a number of positive changes to the rule, managing requirements and the impact organizationally will be a challenge. Implementing the resulting amendment, as well as what will certainly be ongoing clarification, necessitates a dynamic approach to systems configuration and operational workflow.