Loosening US mortgage lending rules? What could go wrong?

It is obvious that there is no love lost among Republicans for the Consumer Financial Protection Bureau and its director, Richard Cordray. However, one GOP congressman’s recent tirade against the CFPB’s mortgage lending rules is worrying given the experience of the housing bust.

  • By Sam Kerr
  • 12 Apr 2017
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Arkansas Republican French Hill voiced support this week of the House Financial Services Committee's attempts to weaken the CFPB, attacking the constitutionality of Cordray’s position as well as taking aim at the ‘ability to repay rule’ (ATR) for mortgage lenders.

Hill said that ATR has made it far more difficult for low or middle income borrowers to buy a home and killed the mortgage businesses of community banks.

The rule as written by the CFPB requires “most mortgage lenders to make a good-faith effort to determine that you are likely to be able to pay back the loan.”

In both agency and private label, ATR has made the market fundamentally safer since the crisis. Investor confidence in RMBS is predicated on the credit worthiness of borrowers taking out mortgages and their ability to pay back those loans — the explicitly stated objective of ATR.

The basic idea that that borrowers should have the ability to pay their debts should not be controversial among lawmakers in Washington. A weakened CFPB that can no longer enforce this very basic form of consumer and investor protection, would undermine all of the work done to bring the US housing market back from the brink.

More's the pity there is no recent case study which would show the GOP what happens when you play fast and loose with mortgage lending standards.

  • By Sam Kerr
  • 12 Apr 2017

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
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1 Citi 417,761.51 1606 9.02%
2 JPMorgan 380,362.89 1737 8.21%
3 Bank of America Merrill Lynch 364,928.71 1322 7.88%
4 Goldman Sachs 269,252.76 932 5.82%
5 Barclays 267,252.43 1082 5.77%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
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1 HSBC 45,449.36 196 6.56%
2 BNP Paribas 38,734.80 217 5.59%
3 Deutsche Bank 37,615.10 139 5.43%
4 JPMorgan 34,724.19 118 5.01%
5 Bank of America Merrill Lynch 33,835.53 112 4.88%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
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1 JPMorgan 22,475.46 105 8.65%
2 Morgan Stanley 19,057.00 101 7.34%
3 Citi 17,812.08 111 6.86%
4 UBS 17,693.89 71 6.81%
5 Goldman Sachs 17,333.10 99 6.67%