September 15, 2015

In Case You Missed It: A Look at Recent National Housing Policy News

Fannie Mae drops mortgage modification interest rate to lowest level ever

New rate takes effect on Sept. 15
After raising the benchmark interest rate for its standard modification program twice in the last three months, Fannie Mae is set to drop the benchmark rate back down to the lowest level it’s ever been.
Beginning Sept. 15, Fannie Mae will lower its required interest rate for standard modifications from 4.25% to 4%.  The standard modification rate has only been that low three other times since the modification interest rate was first established in Jan. 2012.  The only other times the standard modification interest rate has been 4% were in February and May of this year, as well as December 2012.

MBA launches Know Before You Owe for homebuyers and mortgage lenders

TRID is coming, you better be ready
The Mortgage Bankers Association launched a set of resource guidelines to educate consumers, lenders and their business partners about the new Know Before You Owe or TILA RESPA Integrated Disclosure regulations from the Consumer Financial Protection Bureau that will go into effect on Oct. 3, 2015.  These new, complex regulations will require new mortgage disclosure forms and will change the way that real estate transactions are processed and closed. It is the intent of these resources to help educate consumers, industry partners and service providers, and to speed the process of these transactions.  “MBA has worked closely with the CFPB to create these materials so that both consumers and the real estate community can comply with the new procedures in an efficient and smooth process,” said MBA President and CEO David Stevens. “Our industry has been preparing for these changes over the last several months and we are confident that everyone involved in the closing process will benefit as a result of these new rules.”

Urban Institute - Where is the private-label mortgage securitization market?
The Urban Institute's Housing Finance Policy Center has just released a new note: The Rebirth of Securitization: Where is the Private-label Securitization Market?  In her brief, Center Director Laurie Goodman explains why the private-label residential mortgage-backed securities market remains stagnant.  She also explores why this is problematic and what needs to happen to re-invigorate this critical piece of housing finance.   Here’s the abstract:  In the wake of the financial crisis, new securitization activity ground to a halt in all asset classes that did not have an implicit or explicit government guarantee. Though securitization has since resumed in most asset classes, including automobiles, credit cards, collateralized loan obligations (CLOs), and commercial mortgage-backed securities (CMBSs), the private-label residential mortgage-backed securities market remains stagnant. In this brief, we discuss why the residential mortgage market experience has been so different and provide guidance about what remains to be fixed.

MBA Releases White Paper on Information Security
The Mortgage Bankers Association released a white paper that discusses information security risks facing the mortgage industry and basic security practices necessary to help mitigate risks.  The report, The Basic Components of an Information Security Program (, was authored by members of the MBA Residential Technology Forum Information Security Workgroup. The paper is intended to assist small and medium-sized entities that might need help in understanding and managing security risk.  It was released here at the MBA Risk Management, Quality Assurance & Fraud Prevention Forum.  "We realized that smaller firms might not have enough resources or expertise to keep abreast of the rapidly changing risks" said Shawn Malone, vice president of business compliance with Radian Group, Philadelphia, and chair of the MBA Information Security Workgroup.  "Our Workgroup identified a need for a security guide that non-technical individuals could use to help improve the security of their organization."

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