In a novel approach to creating a Utility Model for the GSEs, CHLA suggested in a letter to the CFPB that the QM rule to be used to give FHFA authority to regulate mortgage loan standards for Fannie and Freddie when they exit conservatorship. The letter also stressed the critical importance of not letting the QM Patch expire without a more flexible replacement.
CHLA today released its updated GSE reform plan, following the administrative approach to GSE reform CHLA has been advocating for 5 years. Citing the substantial reforms accomplished to date, CHLA called on FHFA and Treasury to finish the task by ending the GSE Profit Sweep, finalizing a capital rule, and carrying out a Capital Restoration Plan, that results in an end to the GSEs’ conservatorship.
CHLA submitted a comment letter to Ginnie Mae, arguing that Ginnie Mae should not stress test smaller IMB issuers, as stress testing would not accurately measure smaller issuer risk, would undermine consumer access to credit, and would increase issuer concentration. The letter drew heavily from CHLA’s January “Report on Ginnie Mae.”
In a formal comment letter to Ginnie Mae, CHLA makes the case that FHA Life of Loan premiums drives borrowers to refinance out of FHA loans – a major contributing factor to an acceleration in Ginnie Mae prepayment speeds, which are harmful to the program.
CHLA released its set of FHA policy proposals – which include ending the overcharging of borrowers by ending FHA’s Life of Loan premium policy, reducing disproportionate penalties for missing servicer deadlines, finalizing pending condo flexibility proposals, modernizing FHA’s IT and underwriting standards, and reducing annual premiums as its Net Worth increases.
CHLA sends a letter to Congressional appropriations leaders asking for (1) higher pay scales for FHA staff, commensurate with other financial regulators and (2) re-authorization of lapsed authorization from the 2008 HERA legislation which allows FHA to use FHA profits to fund needed IT technology updates. Both changes are critical to keeping FHA modern and responsive to borrower and lenders needs.
Michael Delehanty pens an Op-Ed explaining the follow of the GSE Profit Sweep – which slowed down Fannie and Freddie’s emergence from conservatorship and raised