MReport May 2017

TheMReport — News and strategies for the evolving mortgage marketplace.

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8 | TH E M R EP O RT MONTH IN REVIEW 1 The Consumer Financial Protection Bureau has proposed amending certain regulations in the Equal Credit Opportunity Act, with the goal of pro- viding more flexibility for lenders in their collection of consumer ethnicity and race information. The proposed amendments will provide greater clar- ity to lenders regarding their obliga- tions under the law. 2 The U.S. Department of Justice announced its support for PHH Corp. in its pending legal case against the Consumer Financial Protection Bureau. In a published 33-page brief, the DOJ declared the CFPB leadership system unconstitutional. 3 At a recent Institute of International Bankers Conference in Washington, D.C., Federal Deposit Insurance Corporation Vice-Chairman Thomas Hoenig presented plans for a framework that would allow banks to separate spheres of traditional activity from more non-traditional ones in return for relief from some regulations under the Dodd-Frank Act. 4 The Federal Housing Finance Agency announced that Release 2 of its Single Security Initiative and Common Securitization Platform will be delayed, arriving in mid-2019 rather than the 2018 release date originally planned. The agency needs more time to fully develop the pro- grams, which aim to establish a single, liquid market for mortgage-backed securities issued by the GSEs and maintain that liquidity over time. 5 The House Subcommittee on Oversight and Investigations of the Committee on Financial Regulations held a hearing on the constitutionality of the Consumer Financial Protection Bureau. During the hearing, the subcommittee discussed discrimination by the Bureau, as well as possibilities for restructuring the CFPB under the new administration. 6 Caliber Homes Loans acquired Banc Home Loans, the mort- gage banking division of the Banc of California. The acquisition will allow Caliber to expand its footprint into the California and Northwest markets. Caliber acquired Banc for $25 million in cash and spent $36 million to pur- chase the institution's servicing rights on $3.8 billion in unpaid balance. 7 Wells Fargo settled a class action lawsuit regarding claims that it opened accounts without the consent of its customers. The bank recently received a "need improvement" rating under the Community Reinvestment Act. This is a downgrade from its previous "outstanding" score. 8 According to the Pro Teck Valuation Services Home Value Forecast, the recent Fed rate hike could lead to a slowdown in growth— or even a reduction—of home prices. San Francisco, Nashville, and Raleigh, North Carolina, are particularly The Road Ahead The industry is headed toward a changed regulatory landscape if this month's headlines are any indication. With updates in the works from the CFPB, FDIC, FHFA, the House of Representatives, and Department of Justice, only one thing remains certain: Change is inevitable. poised to see home price dips if rates continue to rise as the Fed has indicated. 9 A National Association of Homebuilders report revealed that construction is on the rise, with home starts and completions jumping 3 percent between January and February and single-family building permits increasing the same. Additionally, the Bureau of Labor Statistics Job Opening and Labor Turnover Survey showed that homebuilder and remodeler jobs grew by 18,900 in February. 10 ATTOM Data Solutions released its 2016 Year-End U.S. Home Flipping Report, which showed that 193,009 single-family homes were flipped last year—a 3.1 percent uptick from the year prior and the highest number of home flips since 2006. Home flipping peaked in 2005 when 338,207 single-family homes and condos were flipped.

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