The Federal Housing Finance Agency (FHFA) is rolling out more opportunities for the public to engage with it on the transition to updated credit score models and credit report requirements for loans acquired by Fannie Mae and Freddie Mac, also known as the Enterprises.
Courtesy of Dave Kovaleski, Financial Regulation News
The engagement will include a series of stakeholder forums as well as listening sessions. It will allow for the identification of a wide variety of issues, opportunities, and challenges related to successful implementation of the new requirements, including potential refinements to the timeline for adoption.
“This engagement process represents the next logical step in our efforts to ensure robust public input as we work towards implementing the new credit score requirements at the Enterprises,” FHFA Director Sandra Thompson said. “We want to hear from market participants and impacted stakeholders to ensure a smooth transition that minimizes costs and complexity.”
In October of last year, FHFA approved the FICO 10T and VantageScore 4.0 credit score models for use by the Enterprises. This followed a lengthy process of reviewing potential updates to the Enterprises’ credit score requirements, as required by statute and regulation. During this time, the Enterprises undertook rigorous testing of the models and both of the newly approved models exceeded the required thresholds for accuracy, reliability, and integrity.
After an implementation process, the Enterprises will require scores from both models, when available, on all single-family loans they acquire.
Also last year, FHFA said the Enterprises would transition from a tri-merge requirement, in which credit reports are required from all three major consumer reporting agencies, to a bi-merge requirement, in which credit reports are required from at least two of these agencies. FHFA expects that this will promote competition in the market while maintaining the information needed to support robust risk management.
Further, FHFA expects that the implementation date for this bi-merge requirement will occur later than the first quarter of 2024, as was initially proposed.
Interested parties who wish to participate in this process should send their name, affiliation, and contact information to [email protected]. FHFA expects to hold initial sessions in the coming weeks. Those who wish to participate in the initial sessions should respond by Sept. 25.
CFPB & FHFA news release announcing the publication of updated loan-level data for public use collected through the National Survey of Mortgage Originations
The Consumer Financial Protection Bureau (CFPB) and the Federal Housing Finance Agency (FHFA) today published updated loan-level data for public use collected through the National Survey of Mortgage Originations (NSMO). The data also provide updated mortgage performance and credit information for a nationally representative sample of mortgage borrowers from 2013 to 2020.
Key highlights from the updated data are:
- The COVID-19 pandemic shaped the mortgage borrower experience in 2020. A higher share of borrowers reported that a paperless online mortgage process was important to them in 2020 (48 percent) than in 2019 (42 percent). More borrowers reported that the mortgage closing did not occur as originally scheduled in 2020 (21 percent) than in 2019 (17 percent).
- Mortgage borrowers, particularly those refinancing a loan, responded to the low-interest rates in 2020. The share of borrowers who rated themselves very familiar with available interest rates increased from 55 percent in 2019 to 69 percent in 2020. The share who reported being very satisfied that they got the lowest interest rate for which they could qualify increased from 67 percent in 2019 to 75 percent in 2020.
- Borrowers who refinanced in 2020 were more well off financially than those who refinanced in 2019:
- A higher share reported their household income was $175,000 or higher in 2020 (29 percent) than in 2019 (20 percent).
- Similarly, a higher share indicated that they owned stocks, bonds, or mutual funds in 2020 (53 percent) than in 2019 (43 percent).
- Relatedly, 76 percent of borrowers who refinanced were not at all concerned about qualifying for a mortgage in 2020, up from 66 percent in 2019.
Watch The Consumer Financial Protection Bureau’s Semi-Annual Report to Congress
December 15, 2022
CFPB Amendment to the HMDA Rule
Home Mortgage Disclosure (Regulation C); Judicial Vacatur of Coverage Threshold for Closed-End Mortgage Loans
In April 2020, the Consumer Financial Protection Bureau issued a final rule (2020 HMDA Rule) to amend Regulation C to increase the threshold for reporting data about closed-end mortgage loans. The 2020 HMDA Rule increased the closed-end mortgage loan reporting threshold from 25 loans to 100 loans in each of the two preceding calendar years, effective July 1, 2020.
On September 23, 2022, the United States District Court for the District of Columbia vacated the 2020 HMDA Rule as to the increased loan-volume reporting threshold for closed-end mortgage loans. As a result of the September 23, 2022 order, the threshold for reporting data about closed-end mortgage loans is 25, the threshold established by the 2015 HMDA Rule. Accordingly, this technical amendment updates the Code of Federal Regulations to reflect the closed-end mortgage loan reporting threshold of 25 mortgage loans in each of the two preceding calendar years.
You can access technical amendment here: www.consumerfinance.gov/rules-policy/final-rules/hmda-reg-c-judicial-vacatur-of-coverage-threshold-for-closed-end-mortgage-loans/.
The CFPB is proposing:
- Covered nonbanks would report certain agency and court orders connected to consumer financial products and services: Generally, nonbanks would have to report final agency and court orders and judgments, including consent and stipulated orders, brought under federal consumer financial protection laws or state laws regarding unfair, deceptive, or abusive acts or practices.
- Larger supervised nonbanks would designate a senior executive to attest regarding the firm’s compliance with covered orders: Larger nonbanks that are supervised by the CFPB would be required to designate a senior executive to submit an annual supervisory written statement attesting to the steps taken to oversee the activities subject to the order and whether the executive knows of any violations of, or other instances of noncompliance with, the covered order.
Prepared Statement of Director Rohit Chopra before the House Committee on Financial Services
The CFPB’s market monitoring and supervision of financial institutions provides one lens into the state of the economy. Consumer demand has rebounded as our country transitions out of pandemic conditions. While the labor market remains strong, household debt has increased rapidly. The rise in household payment burdens from auto loans and credit cards has been particularly pronounced, given rising interest rates, the cost of vehicles, and the impact of inflation on other goods and services in the economy.
As consumers continue to navigate the economic impacts and ripple effects of the pandemic, their financial patterns have adapted and responded to changing conditions – as have the companies that serve them. For example, the CFPB has observed a notable increase in use of Buy Now, Pay Later products over the past few years. As interest rates on credit cards increase – and correspondingly, outstanding balances – a low- or no-interest Buy Now, Pay Later product that spreads the cost of goods over four payments can be particularly appealing. The CFPB’s recent study on Buy Now, Pay Later noted a significant increase in use of these products to fund essential goods and services. The CFPB is working to ensure that Buy Now, Pay Later lenders adhere to the same protocols and protections as other similar financial products to avoid regulatory arbitrage and to ensure a consistent level of consumer protection.
Oct. 24, 2022 — The Federal Housing Finance Agency (FHFA) today published its new Uniform Appraisal Dataset (UAD) Aggregate Statistics Data File. FHFA also launched UAD Aggregate Statistics Dashboards on its website to provide user-friendly visualizations of the newly available data.
“As home valuations are a vital component of the mortgage process, publishing transparent, aggregate data on appraisals provides useful information to the public while protecting borrowers’ personally identifiable information,” said Director Sandra L. Thompson. “Today’s announcement exemplifies our commitment to the development of a more efficient and equitable valuation system that ultimately reduces appraisal bias.”
The UAD Aggregate Statistics Data File and UAD Aggregate Statistics Dashboards give stakeholders and the public new access to a broad set of data points and trends found in appraisal reports. Additionally, the appraisal statistics may be grouped by neighborhood characteristics and geographic levels (national, state plus the District of Columbia and Puerto Rico, Metropolitan Statistical Areas (MSAs) or Metropolitan Divisions, county, and tract). Of note, the UAD Aggregate Statistics Data File is intended for users capable of using statistical software to extract and analyze data. In contrast, the UAD Aggregate Statistics Dashboards are for users of all types and are designed to provide user-friendly access through customized maps and charts.
FHFA’s Division of Research and Statistics used 47.3 million UAD appraisal records collected from 2013 through the second quarter of 2022 on single-family properties to create a data file of UAD aggregate statistics in a manner that protects borrower privacy. Each UAD appraisal record includes information reported by appraisers on the Uniform Residential Appraisal Report (URAR). The current version of the URAR for single-family homes is Fannie Mae Form 1004 and Freddie Mac Form 70.
Related Links:
- UAD Aggregate Statistics Dashboards
- UAD Aggregate Statistics Data File
- UAD Aggregate Statistics Blog
Click here to register or learn more.
Public listening session hosted by the Federal Housing Finance Agency on September 29, 2022.
About this event
The Federal Housing Finance Agency (FHFA) will conduct a comprehensive review of the Federal Home Loan Bank (FHLBank) System beginning in the fall of 2022.
The FHLBanks have been a critical source of liquidity for their members for the past 90 years, especially during times of market stress, such as the Great Recession and the outset of the COVID-19 pandemic. The FHLBanks also support low-income housing and community development directly by offering a variety of programs to their members, including the Affordable Housing Program, the Community Investment Program, and the Community Investment Cash Advance Program.
As part of the review process, FHFA will host two public listening sessions and a series of regional roundtable discussions to consider and evaluate the mission, membership eligibility requirements, and operational efficiencies of the FHLBanks. FHFA will hear from stakeholders on the FHLBanks’ role or potential role in addressing housing finance, community and economic development, affordability, and other related issues.
FHFA invites interested parties to speak or attend the kick-off event for FHLBank System at 100: Focusing on the Future, a listening session on Thursday, September 29, 2022. The session will be held in person at the Constitution Center in Washington, DC, with the option to participate virtually.
FHFA is specifically interested in receiving feedback in six key areas:
- The FHLBanks’ general mission and purpose in a changing marketplace;
- FHLBank organization, operational efficiency, and effectiveness;
- FHLBanks’ role in promoting affordable, sustainable, equitable, and resilient housing and community investment;
- Addressing the unique needs of rural and financially vulnerable communities;
- Member products, services, and collateral requirements; and
- Membership eligibility and requirements.
FHFA is also accepting written comments on the same topics through October 21, 2022.
The session is scheduled to begin at 12:30 p.m. ET and conclude by 4:00 p.m. ET. If you would like to request a brief speaking slot, please indicate your interest on the following registration page.
A copy of the agenda will be forthcoming.
(July 30, 2021) Slightly more Americans were not concerned about qualifying for a mortgage during the application process in 2019 (compared to the year before) before the COVID-19 pandemic began, according to updated mortgage loan-level data published this week by the CFPB and the Federal Home Financing Administration (FHFA).
In a joint release, the agencies said the data is aimed at providing insights into borrowers’ experiences in obtaining resident home loans. The data is collected, the agencies said, through quarterly surveys sent to borrowers who had recently obtained mortgages.
This latest data was collected before the financial impact of the coronavirus crisis became apparent in 2020, when economic conditions changed abruptly, and the process for applying for mortgages largely shifted to on-line. Thursday’s release adds two additional years of new mortgage data through 2019, the agencies aid.
Regarding the data point about concern among borrowers qualifying for a mortgage loan, those borrowers not concerned about qualifying during the application process increased somewhat from 2018 to 2019 (from 48% to 51% for home purchase mortgages and 57% to 66% for refinances).
Other points revealed by the data, the agencies said, included:
- The percent of survey respondents who applied directly through a credit union or bank decreased from 2018 to 2019 (from 54% to 49% for home purchase mortgages and 67% to 61% for refinances).
- The percent of survey respondents who reported applying for a mortgage through a mortgage broker increased from 2018 to 2019 (from 42% to 46% for home purchase mortgages and from 30% to 38% for refinances).
- The percent of survey respondents who reported a paperless online mortgage process being important in choosing the mortgage lender/broker remained relatively high and unchanged from 2018 to 2019 (40% for home purchase mortgages and 44% for refinances).
LINK:
CFPB and FHFA Release Updated Data from the National Survey of Mortgage Originations for Public Use
(June 25, 2021) The Supreme Court ruled this week that the director of the Federal Housing Finance Authority (FHFA) may be fired by the president, overturning the agency’s structure which held that the director could only be removed “for cause” – and the same day, that’s what the president did. The White House said that President Joe Biden (D) had fired FHFA Director Mark Calabria (in office since 2019) and replaced him (as acting director) with Sandra Thompson, who has served as deputy director of the agency’s division of housing mission and goals since 2013. She worked before that for more than 23 years at the FDIC … The loan interest rate ceiling for federal credit unions will remain at 18% through March 10, 2023, under action taken Thursday by unanimous vote of the NCUA Board – the 23rd time the board has approved the ceiling since it was initially set in 1987 … Farewell to Jay Murray who has retired as CEO of Vizo Financial Corporate CU effective June 1 after nearly 30 years with the corporate — and congrats to David Brehmer who had been serving as president is now president and CEO of VFCCU … The House on Thursday joined the Senate (both with bipartisan – if narrowly so – votes) to repeal the OCC’s “true lender” rule. President Biden has indicated he will sign it into law. The rule, the first financial regulator rule from the Trump era to be overturned by Congress, aimed to determine when a bank is a “true lender” within the context of a partnership between it and a third party. It had been criticized by consumer groups and others, saying it leaves customers vulnerable to predatory “rent-a-bank” schemes, in which an agreement is made between a bank and a third party to advance the loan – but then the bank takes over the loan once the transaction is completed.