Liquidity Crises in the Mortgage Market

Abstract Mortgage Crisis – Nonbanks originated about half of all mortgages in 2016, and 75% of mortgages insured by the FHA or VA. Both shares are much higher than those observed at any point in the 2000s. We describe in this paper how nonbank mortgage companies are vulnerable to liquidity pressures in both their loan origination and servicing activities, and we document that this sector in aggregate appears to have minimal resources to bring to bear in a stress scenario. … Continued

CFPB Issues Final Rule To Help Mortgage Servicers Communicate With Certain Borrowers Facing Bankruptcy

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (Bureau) today issued a final rule to help mortgage servicers communicate with certain borrowers facing bankruptcy. The final rule gives mortgage servicers more latitude in providing periodic statements to consumers entering or exiting bankruptcy, as required by the Bureau’s 2016 mortgage servicing rule. The Truth in Lending Act requires mortgage servicers to provide periodic statements to borrowers, and the Bureau has developed sample forms for servicers to use. The 2016 mortgage servicing … Continued

UNSEALED: DOJ Confirms Holders of Securitized Loans Cannot Be Traced

In a filing unsealed on June 3, 2016, the Department of Justice (DOJ)  confirms what many of us have known for years. Nobody, not even the U.S. Government, with massive resources, can determine who owns your securitized loan and has the right to collect on your mortgage. The information comes from case files unsealed on June 3, 2016 by  federal Judge Yvonne Gonzalez Rogers of the Northern District of California in the case of the United States v. Discovery Sales, Inc. The case … Continued