10 top mortgage stories of 2017
December 26, 2017 4:16 PM
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A new administration. Tumbling origination volume and the emergence of a new purchase market. Equifax. Regulatory upheaval. Digital mortgage innovations.
These are just a few of the dominant stories that defined the mortgage industry in 2017. Many of these topics, like housing finance reform, the future of Fannie Mae and Freddie Mac and the housing inventory shortage, will continue to influence the industry well into 2018.
Here's a look back at the top news items of 2017, including links to a selection of coverage from the National Mortgage News team on each topic.
These are just a few of the dominant stories that defined the mortgage industry in 2017. Many of these topics, like housing finance reform, the future of Fannie Mae and Freddie Mac and the housing inventory shortage, will continue to influence the industry well into 2018.
Here's a look back at the top news items of 2017, including links to a selection of coverage from the National Mortgage News team on each topic.
Andrew Harrer/Bloomberg
FHA premiums: To cut or not to cut?
In the closing weeks of President Barack Obama's second term, his Housing and Urban Development Secretary, Julian Castro, announced a 50-basis-point cut to the Federal Housing Administration mortgage insurance premium that was scheduled to take effect after President Trump's inauguration.
But moments after Trump was sworn in, the cut was put on hold, prompting debate throughout the year of whether it should be instituted or not.
Castro's Parting Gift: One Last Cut to FHA Premiums
FHA Price Cut Officially Halted Moments After Trump Sworn In
FHA premium reduction remains on hold: Carson
Lack of FHA chief fuels uncertainty about premium cut
FHA still weighing premium cuts: Carson
As FHA reserves dwindle, so do odds of premium cut
FHA premium cut still may not happen after Montgomery is confirmed
But moments after Trump was sworn in, the cut was put on hold, prompting debate throughout the year of whether it should be instituted or not.
Equifax data breach
In September, Equifax announced a cybersecurity incident involving unauthorized data access between mid-May to July. The breach, which exposed the data of over 145 million Americans, was initially discovered on July 29 and was the tipping point for credit bureau reform, according to lawmakers. The heightened focus also raised new questions about the security of other products and services the credit bureaus provide financial istitutions.
Equifax breach: Told. You. So.
Seven aftershocks of the Equifax breach: What bankers need to know
The Equifax breach: A much needed catastrophe
Equifax credit freezes could threaten demand for consumer loans
Equifax is tipping point for credit bureau reform, lawmakers say
As ex-Equifax CEO testifies, all credit bureaus are on trial
Warren plans credit bureau reform bill after Equifax hack
Equifax breach draws Wells-level congressional scorn
Vulnerabilities in Equifax's The Work Number raise new security doubts
Equifax restoring The Work Number portal with beefed-up security
AARON SKINNER/BLOOMBERG NEWS
Originations drop on higher prices and low inventory
Origination volumes dropped this year, as the pickup in purchase lending could not make up for the drop in refinancing. Lenders' woes were exacerbated by a dearth of housing inventory that hampered
Natural disasters, like California's wildfires and Hurricanes Harvey and Irma also impacted the housing market this year.
Mortgage lenders brace for a sharp drop in originations
Continued inventory shortage to drive prices higher than expected
Application volume down as purchase activity slows
Wildfires add to Southern California housing woes
More hurricane pain: Fewer homes, shortage of construction workers
Hurricanes cause drop in September's new-home purchase apps
Natural disasters, like California's wildfires and Hurricanes Harvey and Irma also impacted the housing market this year.
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Mortgage companies face tough year
A number of mortgage companies struggled in 2017 as a result of mounting financial and regulatory pressure, as well as general difficulties in a tough market. The pain was felt at nonbanks like PHH and Ditech, as well as banks like Capital One and Citi.
Wells, the industry's largest mortgage lender, was rocked by a fake credit card account scandal. While that incident didn't involve the mortgage business, Wells was also embroiled in a dispute over rate lock fees and Franklin Codel, head of consumer finance was abruptly let go.
Citi continues to simplify, shrink with mortgage servicing exit
Citi's servicing exit tips the scale toward nonbanks
Ditech's Dallas-area office closing eliminates 437 jobs
Substantial doubt for Walter as a going concern
Walter's bankruptcy won't affect Ditech's servicing ability
Capital One to exit mortgage originations, cut 1,100 jobs
PHH's transformation continues to take a toll on the bottom line
Wells Fargo accused of scamming borrowers on rate lock fees
Wells Fargo to offer fee refunds to 110,000 mortgage customers
Wells Fargo fires head of consumer lending
Double duty: Wells' retail chief Mary Mack to head consumer lending
Wells, the industry's largest mortgage lender, was rocked by a fake credit card account scandal. While that incident didn't involve the mortgage business, Wells was also embroiled in a dispute over rate lock fees and Franklin Codel, head of consumer finance was abruptly let go.
Andrew Harrer/Bloomberg
Cordray departs CFPB
The Consumer Financial Protection Bureau's first director, Richard Cordray, left the agency in November and named Leandra English as his acting successor. Cordray's final act to appoint English as interim director came just hours before the Trump administration named Office of Management and Budget Director Mick Mulvaney as the temporary director.
After months of speculation about his political plans, Cordray announced his run for Ohio governor on Dec. 5.
Cordray to leave CFPB by end of month
Cordray out at CFPB, names own acting successor
Radical changes ahead for CFPB after Cordray departure
Leadership clash at CFPB continues as two claim mantle
Who will be next CFPB director?
It's official: Cordray announces run for Ohio governor
At CFPB, bitter feelings about final Cordray maneuver
Judge casts doubt on CFPB deputy's claim to head agency
Can CFPB's Mulvaney bring politicos to independent agency? Absolutely
After months of speculation about his political plans, Cordray announced his run for Ohio governor on Dec. 5.
Andrew Harrer/Bloomberg
PHH challenges CFPB's constitutionality
A dispute over a $109 million CFPB enforcement action against PHH Corp. in 2014 has ballooned into a legal battle over whether the bureau's single-director structure violates the Constitution's separation of powers clause.
At issue is whether the CFPB's single-director structure inhibits the president's authority and is counter to the Constitution's establishment of checks and balances. Adding a new wrinkle to the case as it made its way through the courts this year is that the Justice Department under Attorney General Jeff Sessions has sided with PHH.
Justice Department turns against CFPB in constitutionality case
How the CFPB constitutionality case will play out
Dodd and Frank themselves back CFPB in constitutionality case
What to expect at court hearing on CFPB constitutionality
Mixed signals on CFPB constitutionality from appeals court justices
CFPB's constitutionality question doesn't end with Cordray's departure
At issue is whether the CFPB's single-director structure inhibits the president's authority and is counter to the Constitution's establishment of checks and balances. Adding a new wrinkle to the case as it made its way through the courts this year is that the Justice Department under Attorney General Jeff Sessions has sided with PHH.
Trump eyes deregulation
The Trump administration has moved to cull back regulations it claims are hampering economic growth. Likewise, Trump and Congressional Republicans enacted a sweeping $1.5 trillion tax overhaul that among other things, limits the mortgage interest deduction and state and local property tax deductions.
Why Trump still faces an uphill climb to ease regulations
Cheat sheet: What tax reform would mean for lenders
Senate tax bill breaks with House over mortgage interest deduction
Proposed tax change could hurt mortgage servicers, groups warn
Tax reform threatens to drain GSEs' dwindling capital
12 markets hit hardest by slashing the mortgage interest deduction
Tax reform bill clears Senate, heads to House (again)
How tax bill will change consumers' financial behavior
CFPB to reopen mortgage disclosure rule, will not penalize data errors
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Ocwen under fire
The Consumer Financial Protection Bureau and more than 20 states took action against Ocwen Financial alleging bad servicing practices. The coordinated move came shortly after Ocwen finalized the end of sanctions from a number of states.
Ocwen also sued Fidelity Information Services over its work in an audit it performed for a state regulator. As Ocwen worked to resolve the regulators' claims, it announced it would switch its servicing system of record to Black Knight's platform.
Ocwen sets aside $12.5M for potential CFPB settlement
CFPB, 20 states take sweeping actions against Ocwen
Ocwen goes on the offense in fight with regulators
Why regulators waited years before hitting Ocwen again
FIS expensed strip clubs, padded time sheets during Ocwen audit, lawsuit claims
Ocwen finalizes deal to sell $110B of MSRs to New Residential
Back against wall, Ocwen challenges CFPB's constitutionality
Ocwen replacing embattled servicing system with Black Knight's MSP
Ocwen settles lawsuit for $56 million in cash and stock
Ocwen settles servicing lawsuit with 10 states
Ocwen settles with Alabama, Minnesota regulators
Ocwen also sued Fidelity Information Services over its work in an audit it performed for a state regulator. As Ocwen worked to resolve the regulators' claims, it announced it would switch its servicing system of record to Black Knight's platform.
GSE reform
Until recently, there was a consensus among policymakers that Fannie Mae and Freddie Mac needed to be eliminated. But that's changed recently.
Back in July, Federal Reserve Gov. Jerome Powell (who was confirmed in December to serve asFed Chair ) called GSE reform a "now or never" situation, and in late October, Federal Housing Finance Agency Director Mel Watt said the agency was poised to examine alternatives to how Fannie and Freddie assess creditworthiness of home buyers, including seeking public comment on the issue.
As the year winds down, it looks like GSE reform may actually be happening. And though testing of the common securitization platform is taking longer than expected, the FHFA said it won't delay the 2019 launch of Fannie and Freddie's new single "uniform mortgage-backed security."
The Mortgage Bankers Association, referring to reform of the government-sponsored enterprises as the "last piece of unfinished business of the 2008 financial crisis," believes the mortgage market and consumers could benefit from a larger and diverse base of lenders. It also promotes strong capital supervision, regulation of activities and creating a single security.
'If not now, when?' Fed's Powell on GSE reform
Small lenders fear GSE reform would resurrect bulk discounts for big banks
Corker's retirement may change GSE reform calculus
FHFA to seek public input on alternative GSE credit score model
Tax reform threatens to drain GSEs' dwindling capital
Common securitization platform testing taking longer than expected
Breaking down Hensarling's GSE reform overture
Fannie and Freddie: Should they stay or should they go?
Treasury, FHFA strike deal to let GSEs retain 'limited' capital
Four takeaways from deal to prop up GSEs
Back in July, Federal Reserve Gov. Jerome Powell (who was confirmed in December to serve as
As the year winds down, it looks like GSE reform may actually be happening. And though testing of the common securitization platform is taking longer than expected, the FHFA said it won't delay the 2019 launch of Fannie and Freddie's new single "uniform mortgage-backed security."
The Mortgage Bankers Association, referring to reform of the government-sponsored enterprises as the "last piece of unfinished business of the 2008 financial crisis," believes the mortgage market and consumers could benefit from a larger and diverse base of lenders. It also promotes strong capital supervision, regulation of activities and creating a single security.
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The digital mortgage
As the industry moves to streamline the mortgage process, it continues making strides in achieving a more widespread adoption of the digital mortgage. While some companies claim to already have a digital mortgage process already in place, others report they're on the path to adopting it.
Industry opinions do vary on what constitutes a digital mortgage, with the majority calling it a fully end-to-end electronic process, with discrepancies on whether or not a remote notary being present still describes a digital mortgage.
In September, the National Mortgage News hosted its Digital Mortgage Conference in San Francisco for industry professionals nationwide. The 2018 edition of the conference will be held Sept. 17-18 in Las Vegas.
4 signs that digital mortgages are coming in hot
Digital mortgages advancing, but borrowers still want more speed
Digital mortgage lenders make strides with e-closings, remote notaries
Equifax breach fuels digital mortgage doubts
In mortgages, fintech is so far only skin deep
Quicken Loans to begin closing mortgages with eNotes
How to solve the digital mortgage divide
The true definition of a digital mortgage
Industry opinions do vary on what constitutes a digital mortgage, with the majority calling it a fully end-to-end electronic process, with discrepancies on whether or not a remote notary being present still describes a digital mortgage.
In September, the National Mortgage News hosted its Digital Mortgage Conference in San Francisco for industry professionals nationwide. The 2018 edition of the conference will be held Sept. 17-18 in Las Vegas.
