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Volume 27 - Number 17

August 22, 2016

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Life Under TRID: Delays Ease, Costs Rise, Smaller Loans Less Desirable

The CFPB’s TILA/RESPA Integrated Disclosure Rule continues to have mixed results, at least from the perspective of the nation’s mortgage originator community. According to the recently released results of a survey by the National Association of Realtors of mortgage originators during the second quarter of 2016, delays attributed to TRID eased between the first and second quarters of the year, as did lenders’ reluctance to offer pre-approval letters, while cancellations ticked up. Originators were asked, since April 1, what share of their company’s mortgage transactions had been delayed or cancelled due to a TRID-related issue versus non-TRID issues. Mortgages delayed due to TRID ticked barely down, from 1.8 percent in 1Q16 to 1.7 percent in 2Q16. In the fourth quarter ...

Non-QM Lending Stuck in Funk, Investor Demand Improves a Bit

A National Association of Realtors survey of mortgage originators during the second quarter of the year found that lending outside the parameters of the qualified mortgage standard remains in the doldrums, even though there appeared to be a slight improvement in demand from investors for such loans. Survey participants were asked to provide the percentage share of their production for safe-harbor QM loans, rebuttal-presumption QM loans, and non-QM loans. Respondents indicated that a whopping 93.2 percent of production was in the safe-harbor QM space during 2Q16, up from 89.9 percent in 1Q16. That gain came at the expense of the other two categories. Production of rebuttable-presumption QMs fell from 9.9 percent in the first quarter of the year to 6.7 percent ...

FCC Limits ‘Robocalls’ on Mortgage Loans, Student Loan, Other Debt

The Federal Communications Commission recently promulgated final rules that restrict how companies can attempt to collect on delinquent agency mortgages, federal student loans and other debts owed to the federal government, including through the use of so-called robocalls. The new rules limit the number of robocalls to wireless numbers, including text messages, to three per month. The new rules also only allow robocalls concerning debts that are delinquent or at imminent risk of default, unless there is prior express consent otherwise. The new rules require that, absent consent, callers only call the individual who owes the debt, not his or her family or friends. This includes limiting the number of robocalls allowed to reassigned numbers. The new rules reiterate that ...

Most Small Lenders Felt Rushed by CFPB’s SBREFA Process, GAO Finds

Most of the small-entity participants in the review processes run by the CFPB before it came out with four major mortgage rules felt they were hurried by the process and unsatisfied with the final results, the Government Accountability Office said in a recent report. The GAO took a look at the experience of the 69 Small Business Regulatory Enforcement Fairness Act (SBREFA) panel participants involved in evaluating the likely effects of the CFPB’s TILA/RESPA Integrated Disclosure rule (TRID), the mortgage servicing regulation, its loan originator compensation rule, and the Home Mortgage Disclosure Act regulation. Of the 57 small-entity representatives GAO interviewed, “two-thirds stated not enough time was allotted to discuss at least one of the topics on the panel agenda ...

New Requirements in NY Pose Challenges for Servicers

New legal requirements enacted in the state of New York in the wake of the financial crisis pose particular compliance challenges for mortgage servicers, according to a new report by analysts at S&P Global Ratings. The S&P team recently reviewed a series of laws the state legislature passed in June that attempts to address several issues related to “zombie” foreclosures, which refers to the phenomenon of a servicer initiating foreclosure on a vacant property but not going so far as to actually take title. Urban community activists complain such properties languish unsold for a prolonged period of time, contributing to neighborhood blight in communities least able to handle it – hence, state lawmakers decided to act. One resulting requirement “imposes conditions ...

Does TRID Definition of Application Trigger HMDA Reporting? Maybe

One mortgage lender recently inquired of Michael Goldhirsh, director of legal and regulatory compliance for the Lenders Compliance Group, as to whether the definition of “application” in the CFPB’s TILA/RESPA Integrated Disclosure rule (TRID) triggers or otherwise affects reporting under the Home Mortgage Disclosure Act. In a recent blog posting, he replied: “The short answer is that receipt of some or all of the six pieces of TRID application information does not necessarily trigger an application for purposes of HMDA reporting.” Goldhirsh went on to explain that Regulation C defines an application for HMDA reporting purposes as an oral or written request for a home purchase loan, a home improvement loan, or a refinancing that is made in accordance with ...

CFPB Considering Registration System for Nonbank Institutions

The CFPB is considering whether to propose a rule that would require registration of nonbank financial institutions, according to a Request for Information (RFI) the bureau posted on the Federal Business Opportunity website recently. As part of this process, the bureau is considering whether to procure a comprehensive and interactive online web-based registration system. “Such a system would allow nonbank financial institutions supervised or regulated by the CFPB to apply for, amend, update, or renew a registration online using a single set of uniform applications and would allow the CFPB to process these registration applications and amendments through automated workflows,” according to the RFI. Such a potential registration system might also be used to collect financial and operational data as ...

Debt Collection Outline Suggests CFPB Intends to Cast a Wide Net

While much of the lending industry was captivated and consumed with TRID 2.0 and mortgage servicing amendments two weeks ago, the CFPB used the occasion of a public field hearing to preview its pending debt collection rule by circulating an outline of proposals under consideration in the run-up to conducting a small business review panel. The proposals the bureau is mulling over would increase protections pertaining to third-party debt collectors and others covered by the Fair Debt Collection Practices Act, including many debt buyers. “As part of its overhaul of the debt collection marketplace, the CFPB plans to address consumer protection issues involving first-party debt collectors and creditors on a separate track,” the agency said. More specifically, among the new ...

Student Loan Borrowers Run Into Problems With IRD Plans: CFPB

Student loan borrowers are encountering difficulties when they try to file an application for income-driven repayment (IDR) plans, according to the CFPB’s midyear update on student loan complaints, which was released late last week. Since 2009, the vast majority of borrowers with federal student loans have a right under federal law to set their monthly student loan payments based on their income. For borrowers who are unemployed or earn low wages, these IDR plans provide for a “payment” as low as $0 per month. “Many borrowers depend on student loan servicers to inform them about the availability of IDR options and for processing borrowers’ enrollment in these plans,” said the bureau. “This report observes that borrowers encounter obstacles when submitting ...

CFPB Delayed in Providing PIV for Access to its Networks, OIG Finds

The CFPB is strengthening its identity and access management program and access controls for select systems, but is behind the curve when it comes to supporting the use of personal identity verification (PIV) technology, according to the latest Office of Inspector General review of the bureau’s information security management practices. “[W]hile the CFPB uses multifactor, token-based authentication for remote access to the agency’s network, it has not implemented PIV cards for logical access to the agency’s network and systems,” the OIG report stated. CFPB officials told the OIG that the bureau is making progress in implementing PIV. “However, implementation has been delayed due to the prioritization of competing initiatives and the timing of the agency’s transition from the U.S. Department ...

Other News in Brief

The Federal Deposit Insurance Corp. last week released on its website updated technical assistance videos on the CFPB’s Ability-to-Repay/qualified mortgage rule. “The updated videos provide financial institution management, compliance officers and staff with resources for a better understanding of the current requirements of the ATR and QM rule,” it said. ... CFPB Director Richard Cordray last week responded to two members of the Senate Banking, Housing and Urban Affairs Committee who had recently pressed him to consider exempting small community banks and credit unions from as much of its rulemaking as possible...


The yield on the benchmark 10-year Treasury fell to all-time low of 1.34% recently. How much better will originations be at your shop in the second half compared to 1H, if at all?

Better by 1% to 10%.


Better by 11% to 25%.


Off the charts better. Applications are great now.


Worse than 1H, but not by much.


A lot worse. But not sure on the damage.


Housing Pulse