Regulations

Browse articles from all of our Newsletters related to Regulations.

May 2, 2016 - Inside the CFPB

Other News in Brief

Mortgage Warehouse Volume at Horizon Bancorp Declines in First Quarter, TRID Remains an Issue. Horizon Bancorp announced recently that its mortgage warehouse lending efforts were down in the first quarter of 2016. The bank had $119.88 million in mortgage warehouse loans on its balance sheet at the end of the first quarter of 2016, down 17.2 percent from the previous quarter and down 33.0 percent from the first quarter of 2015.... Flagstar Boosts Originations and Income in 1Q16, Is Comfortable with TRID. Flagstar Bancorp reported an increase in originations and net income for the first quarter of 2016 with company executives noting that the bank is comfortable with the TRID mortgage disclosure requirements...


May 2, 2016 - Inside the CFPB

More Tweaks to QM Needed, Industry Groups Tell Bureau

The CFPB should consider increasing the asset threshold limit to be considered a “small creditor” under its ability-to-repay/qualified mortgage rule, from $2 billion to $10 billion, so that more small lenders may take advantage of the regulatory relief a recent interim final rule provides, according to the American Bankers Association. The interim final rule, which was issued March 25, 2016, expanded the availability of certain special provisions for small lenders operating in rural or underserved areas. The proposal amends some of the definitions in the ATR rule, as per the Helping Expand Lending Practices in Rural Communities Act of 2015, which was enacted Dec. 4, 2015. Under the interim rule, small creditors – or banks that made no more than 2,000 ...


May 2, 2016 - Inside the CFPB

CFPB Solicits Comment on Sample Periodic Statements in Bankruptcy

The CFPB recently reopened the public comment period on whether mortgage servicers should be required to provide periodic statements for borrowers who have filed for bankruptcy. Specifically, the bureau is seeking public input on the consumer testing it did on its proposed sample periodic statement forms. Back in January 2013, the bureau issued its two mortgage servicing final rules. The agency clarified and revised those rules during the summer and fall of 2013 in two packages of amendments. Then in October 2013, the CFPB clarified compliance requirements in relation to successors in interest, early intervention requirements, bankruptcy law, and the Fair Debt Collection Practices Act (FDCPA), through an interim final rule (IFR) and a contemporaneous compliance bulletin. Among other things,...


May 2, 2016 - Inside the CFPB

Struggling Homeowners Still Have Servicing Issues, Bureau Says

The CFPB’s latest monthly consumer complaint report finds that borrowers struggling to keep up with their mortgages are still having problems with their mortgage servicers. “Today’s report shows that consumers are still running into too many dead ends and obstacles in resolving issues with their mortgage servicer,” said CFPB Director Richard Cordray. “The bureau will continue to press to make sure that people can get the right information and the timely help they need.” Among the issues the bureau identified, 51 percent of complaints involved problems borrowers faced when they had difficulty making payments. “Consumers complained of prolonged loss mitigation review processes in which the same documentation was repeatedly requested by their servicer,” said the CFPB. Homeowners also said they ...


May 2, 2016 - Inside the CFPB

Mortgage-Related Exams Rose 70 Percent Last Year, CFPB Reveals

It should come as no surprise to mortgage originators and servicers that the CFPB has significantly ramped up its examination activity of their operations over the last year. Data provided exclusively to Inside the CFPB from the bureau per a Freedom of Information Act request reveal there was a 70 percent increase in mortgage-related exams in 2015 from the prior year. As the accompanying chart illustrates, nonbanks have been having an even more active degree of scrutiny from the bureau than have depository institutions. Nonbank originators have seen an 85.7 percent increase in exam activity year over year, versus depositories, which have seen a rise of “only” 42.9 percent during that period. And it is even worse for nonbank servicers. ...


May 2, 2016 - Inside the CFPB

Recent Borrower Surveys Vindicate TRID, Drafter of Rule Believes

A handful of recent surveys of borrowers taking out a mortgage to purchase a home in the new era of the CFPB’s integrated disclosure suggest that borrowers are generally benefiting from the new forms and having a more positive experience with the entire process. Attorney Richard Horn, a former bureau official who was intimately involved in developing the new rule, is pleased to see confirmation that borrowers are getting the kind of benefit from the rule that he and his colleagues at the agency hoped they would. “From my experience, from having led the consumer testing for the disclosures and even the final rule, I do think it’s possible that these surveys are accurate and that consumers are experiencing the ...


May 2, 2016 - Inside the CFPB

CHLA Calls for Balanced Treatment Of Nonbank Mortgage Lenders

In the continuing wake of industry concerns about the TRID disclosure rule and worries about large retroactive fines, the Community Home Lenders Association says the CFPB should provide more balanced regulatory and enforcement policies toward smaller nonbank mortgage lenders and improve compliance guidance and due process. Asserting that nonbank mortgage lenders, including community-based lenders, have recently “led the way” in providing access to mortgage credit and providing more personalized loan servicing, the CHLA said “any regulatory policies that have the effect of imposing a disproportionate compliance burden on smaller lender/servicers can accelerate industry consolidation – which in turn can result in fewer consumer choices and less personalized service.” The trade group had three main recommendations for the bureau, the first of ...


May 2, 2016 - Inside the CFPB

It Was Thought TRID ‘Scratch & Dent’ Market Would Fade. It Hasn’t

The secondary market for mortgages with TRID errors has yet to lose any steam, even though it was anticipated that the action would fade by now. That’s the assessment of Jeff Bode, CEO of Mid America Mortgage, Addison, TX, one of the largest investors in loans with TRID problems. “It’s still pretty solid,” Bode told IMFnews, an affiliated publication. “But I don’t see how much longer it can last.” Bode noted that some of the mortgages he’s reviewing have errors that are so minor he’s surprised that secondary market investors are balking at them in the first place. Mid America buys such mortgages and “makes the cures” itself, the CEO noted. A secondary market for mortgages with TRID errors – jumbos ...


May 2, 2016 - Inside the CFPB

TRID Architect Provides Inside Perspective on Pending Rule

Both the mortgage industry and the CFPB itself may have been caught a bit flat-footed when it came to fully grasping the significance and complexity of the bureau’s TRID integrated disclosure rule, according to one of the individuals intimately associated with drafting the controversial regulation. “TRID is a huge rule, about 1,900 pages of extremely detailed twists and turns. It affects every single aspect of the origination and closing process, as well as liability for lenders and the secondary market,” former bureau official Richard Horn, now an attorney in private practice, told Inside the CFPB. “I think many in the industry had to play catch up these past seven months, trying to grasp the far reaches and complexity of this ...


May 2, 2016 - Inside the CFPB

Life Under TRID: CFPB Relents on Guidance, Preps to Issue Another Rule

After months of hearing mortgage banking and real estate executives gripe about problems tied to the TRID integrated disclosure rule, the CFPB last week signaled its intention to clarify the controversial measure, which became effective in early October. According to a letter from CFPB Director Richard Cordray to industry trade groups, the agency will issue new rulemaking tied to the TRID disclosure regime that will provide greater certainty and clarity. Cordray – who has been lambasted by the industry about the integrated disclosure rule for months – noted in the letter: “We recognize that the implementation of the Know Before You Owe rule poses many operational challenges. We also recognize that implementation is particularly challenging because of the diversity of the participants ...


May 2, 2016 - IMFnews

Short Takes: Mortgage Lenders are Making How Much? / Just 8 Basis Points Per Loan? / Short P2P Firms Before the CFPB Gets Around to Regulating Them? / True Mortgage Assistance / Only Mel Watt and a Few Others Know the Answer

One analyst we know recently told us about an origination shop that is making just 8 basis points per loan...


April 29, 2016 - IMFnews

What We’re Hearing: When in Doubt, Copy the FHA / A Long List of Suspects / Was the TRID Mess Overblown? / Freddie is Safe / Bulk MSR Deals from IMA, MVSG / Arch MI Shines / MBA Backs Mortgage Broker Marc Savitt / Bill and Joe’s Excellent Salary Adventure

Was the TRID mess overblown? Tell that to all the mortgage firms that lost money on deals...


April 29, 2016 - Inside MBS & ABS

FASB Proposes Technical Corrections, Tweaks to GAAP, Changes Affect MSRs, FHA and VA Loans

The Financial Accounting Standards Board has proposed technical corrections and changes to its codified accounting handbook for private companies, including revisions to guidance relating to FHA and VA loans as well as transfers and servicing of financial assets. The proposed updates respond to suggestions by stakeholders and affect a wide variety of topics in the Accounting Standards Codification, which was established in September 2009 as a comprehensive source of authoritative generally accepted accounting principles used by the private sector. Among other things, a proposed amendment to Subtopic 860-20, Transfers and Servicing – Sales of Financial Assets would add...


April 29, 2016 - Inside MBS & ABS

Research From Treasury Suggests Dodd-Frank Act Handling of Credit Rating Issues Far from Perfect

The alternatives to credit ratings mandated by the Dodd-Frank Act aimed to address contributors to the financial crisis have their own challenges, according to a new report from the Treasury Department’s Office of Financial Research. John Soroushian, a research analyst for policy studies at the OFR, noted that before the financial crisis, rating services had an incentive to inflate ratings for MBS, ABS and other investments to expand their business. He said rating services were “key enablers” in the creation of MBS and collateralized-debt obligations. “Without ratings, it would have been...


April 28, 2016 - IMFnews

CFPB Ready to Deal? Agency Will Make Adjustments to TRID (‘Know Before You Owe’); Unclear On Far It Will Go

However, the new Cordray letter provides no details on where it will land on errors.


April 28, 2016 - IMFnews

Short Takes: Ocwen’s Potential India Problem / Will Trump Penalize Servicers for Offshoring? / Altisource and Ocwen, Connected at the Hip / Bill Would Let GSEs Retain Capital / Spurs Capital Out on Its Own

Will President Trump (if elected) tax mortgage servicers that use offshore workers?


April 28, 2016 - Inside Mortgage Finance

Senate Panel Unveils HUD Funding Bill, Spurns Lender IT Fee, Senate Okays Inclusion of Energy Costs in FHA Underwriting

The Senate Appropriations Committee last week approved funding for several housing provisions in the government’s Transportation and Housing and Urban Development fiscal year 2017 budget proposal, including FHA technological improvements, while the full Senate passed an amendment to include energy costs in FHA underwriting and appraisals. Approved by a unanimous vote of 30 to 0, the T-HUD budget bill, among other things, would provide federal funding for FHA technological upgrades rather than charge lenders an administrative fee as HUD had proposed. The committee appropriated $13 million in specific funds to improve FHA’s information technology. The proposed per-loan fee charged to lenders was projected...


April 28, 2016 - IMFnews

Caliber Home Loans First to Receive ‘Expanded-Credit’ Rating

Lone Star was the first firm to issue a non-agency MBS backed predominantly by non-QMs...


April 28, 2016 - IMFnews

More Bad News for Ocwen: No Word on When MSR Purchases Can Commence; Lending Falls

The publicly traded servicer/originator took in $330.7 million in revenue, a 35.2 percent decline from 1Q15. Its origination revenue was a meager $23.2 million…


April 28, 2016 - IMFnews

SFIG Members Still Working on TRID Due Diligence Issues, S&P Clarifies Comments on Draft Proposal

Comments are due on Friday from working group members that have been participating in the effort.


April 28, 2016 - IMFnews

Delinquencies Continue to Fall but Foreclosure Timelines Hit New Highs

Molly Boesel, a senior economist at CoreLogic, noted that in judicial states, servicers must provide evidence of delinquency to the courts in order to move a borrower into foreclosure.


April 27, 2016 - IMFnews

Short Takes: Trouble Ahead for Downpayment ‘Gift’ Programs? / CHLA Sends a Letter to Cordray, Wants a Fair Shake for Nonbanks / Why Sig Anderman of Ellie Mae is a Happy Man These Days

Sig Anderman’s once small firm is now worth more than Nationstar Mortgage, Ocwen Financial and Walter Investment Management Corp. combined.


April 27, 2016 - IMFnews

Real Estate Agents Complain (Big Time) About the TRID Nightmare

On the subject of delayed closings, one agent had this to say: “All of my closings are taking two to four weeks longer to close, and there has been a lot of confusion…”


April 27, 2016 - IMFnews

States Continue to Weigh Regulation of Mortgage Servicers

State regulators have been particularly concerned about growth in recent years by nonbank servicers such as Ocwen Financial, the largest subprime servicer. Ocwen, of course, is now shrinking.


April 27, 2016 - IMFnews

A TRID Breakthrough? S&P Endorses Due Diligence Standards Proposed by SFIG; Ready to Rate Non-Agency MBS

While S&P will rate new non-agency MBS without formal guidance from the CFPB, the rating service noted that the market’s handling of TRID issues is fluid...


April 27, 2016 - IMFnews

CFPB Cites ‘Prolonged’ Loss Mitigation Process by Servicers

Consumers said they received conflicting and confusing foreclosure notifications during the loss mitigation review process...


April 26, 2016 - IMFnews

Short Takes: When In Doubt, Bolt the FHA? / A Record ‘Tightness’ for Non-Agency? / Mortgage Banking is Only Good When Hot / Essent Gets LOC / Parkside Hires Former BofA Executive

One industry consultant warns that when times are good, mortgage banking income can “turbocharge” earnings but...


April 26, 2016 - IMFnews

A Trickle of Jumbo Securitizations. Blame TRID?

Pricing on the deal was good, but investor fears rule the day.


April 25, 2016 - IMFnews

Short Takes: Delinquencies Decline / Comment Deadline for Controversial Survey / New STACR Deal / Assurant Fills in on Flood Insurance

The delinquency rate declined by 8.4 percent in March compared with February and was down 12.4 percent on an annual basis.


April 25, 2016 - IMFnews

Mortgage Warehouse Volume at Horizon Bancorp Declines in First Quarter, TRID Remains an Issue

Craig Dwight, Horizon Bancorp’s chairman and CEO, indicated that the TRID mortgage disclosure rule had an impact on warehouse lending during the quarter.


April 25, 2016 - IMFnews

Borrowers Like New TRID Forms, Even with Delays

While most borrowers felt positive about the new forms, 63 percent said their experience with TRID prevented them from closing on their new homes within the desired timeframe.


April 22, 2016 - Inside FHA/VA Lending

HUD Sets Up Joint FHA/VA System To Prescreen Mortgage Applicants

The Department of Housing and Urban Development has issued a notice to establish a computer-matching program between FHA and the VA that would enable the two agencies to prescreen mortgage applicants. The notice was published in the April 15 Federal Register. The computer-matching program would allow HUD to incorporate VA debtor files into the department’s Credit Alert Verification Reporting System (CAVRS). Consequently, both the FHA and VA would be able to prescreen loan applicants and identify who is delinquent or in default on a federally guaranteed mortgage loan. The use of CAVRS would allow HUD to monitor its FHA programs better and prevent the extension of credit to individuals who are delinquent or in default on their obligations to HUD and other federal agencies. Meanwhile, VA expects to achieve savings through risk reduction and ...


April 22, 2016 - Inside FHA/VA Lending

FHA Eases Rules for Qualifying Borrowers with Student Loans

The Department of Housing and Urban Development has revised guidance to lenders for calculating monthly student-loan payments for debt-to-income ratio purposes. The change is aimed at helping more borrowers with student-loan obligations to qualify for an FHA-insured mortgage. Currently, the FHA requires lenders to calculate a monthly payment for deferred student loans based on 2.0 percent of the outstanding balance, and include it in the borrower’s DTI for qualifying purposes. The disadvantage of the current method of calculation is that it makes it harder for the borrower to qualify for an FHA loan, according to Marc Savitt, president of The Mortgage Center, an exclusively FHA/VA lender in Martinsburg, WV. Under the revised guidance, regardless of the borrower’s payment status, the lender must use: (a) the greater of 1.0 percent (a 50 percent reduction from the current 2.0 percent) of the ...


April 22, 2016 - Inside FHA/VA Lending

FCA is Altering the FHA Landscape As Banks Flee, Nonbanks Jump In

More large lenders may pull back from FHA lending in the wake of this month’s massive settlements between two major FHA lenders and the Department of Justice to resolve alleged violations of FHA lending guidelines and the Federal Claims Act, warned a Baker Donelson attorney in a recent analysis. As DOJ increases its use of the FCA, “large lenders will continue to step away from FHA originations,” said Craig Nazarro, of counsel at Baker Donelson in Atlanta and author of the analysis. Nazarro also warned nonbank FHA originators of the risk they are taking on by continuing to originate FHA loans and growing their government-backed loan portfolio as the larger banks exit or limit their participation in the FHA market. “Many large lenders have faced or are currently facing these [enforcement] actions, and from the [DOJ’s] recent statements, it does not appear that they are slowing down ...


April 22, 2016 - Inside FHA/VA Lending

Annual MIP Cut Helped Spur FHA Streamline Refi Activity in 2015

FHA’s Streamline Refinance program went through an erratic pace in 2015 as business exploded in the second quarter and declined over the second half of the year. FHA lenders closed 2015 with $67.5 billion in total streamline refis, a 252.4 percent improvement over volume in 2014. Production fell 30.0 percent in the fourth quarter from the prior quarter. The second-quarter spike – which caused streamline refi volume to jump from $12.1 billion in the first quarter to $25.0 billion in the second quarter – was fueled apparently by FHA’s reduction of the annual mortgage insurance premium. In January 2015, the FHA cut its MIPs on 30-year loans, making it less expensive to carry an FHA home. Under the revised MIP schedule, a 30-year FHA streamline refi with a loan-to-value ratio over 95 percent is charged an annual MIP of 0.85 percent. For a 30-year loan under 95 percent LTV, the annual MIP is ... [ 1 chart ]


April 22, 2016 - IMFnews

What We’re Hearing: Are Mortgage Loan Officers Overpaid? / Why the Mortgage Process is Complicated / Which is a Better Investment: Spending Money on LOs or Programmers? / A New Call Center on the Way? / Nationstar Compared to Ocwen and Walter

Then again, I’ve talked to recruiters who believe that good LOs are worth every nickel as long as they bring in the business.


April 22, 2016 - Inside MBS & ABS

Ginnie Mae to Eliminate 19-Year Program Targeting Underserved, Guaranty Fee Reduction Ineffective

Ginnie Mae is shutting down its long-running Targeted Lending Initiative (TLI) because it has not made much of an impact on lending to underserved urban and rural areas in recent years. Launched in 1997, the TLI was designed to encourage lenders to finance housing in underserved areas through a reduced guaranty fee. In 2005, the program played a major role in offering relief and financial assistance to homeowners in areas hardest hit by Hurricane Katrina. Under the TLI, Ginnie Mae’s guaranty fee is reduced...


April 22, 2016 - IMFnews

Another Week and More TRID Drama: Buyer Exits Correspondent Jumbo Space; Industry Gives Up Hope on ‘Official Guidance’

“Investors are taking the conservative approach,” said the Morrison & Foerster attorney. “No one wants to be the test case. They’re all worried about what a court might say.”


April 22, 2016 - IMFnews

GAO Questions CFPB’s Ability to Enforce Nonbank Servicers

The GAO says the consumer regulator lacks comprehensive statistics due to external data constraints, and collecting this information is challenging...


April 21, 2016 - Inside Mortgage Finance

FHA Eases Rules for Qualifying Borrowers with Student Loan Payments Should Help First-timers Get Home Loans

Borrowers saddled with student loan debt now have a better chance of qualifying for an FHA mortgage, thanks to a recent change in the way lenders factor such payments in the calculation of a borrower’s debt-to-income ratio. Under newly revised guidance announced by the FHA recently, lenders may apply the same calculation criteria used in the mortgage industry regardless of the type of student loan-payment plan (such as income-based payment plans) or a deferred-payment plan. Currently, there are...


April 21, 2016 - IMFnews

Short Takes: Potential Trouble for Mortgage Employers? / A Crackup Coming for P2P? / Hey, What About an App That Lets You Foreclose by Hitting a Button? / Freedom Tosses Jumbo Loan / PRMG Likes ‘HomeReady’

Here's a product idea: hit a button on your cell phone and get foreclosed on...


April 21, 2016 - IMFnews

Mortgage Attorneys Predict a Victory for PHH in CFPB-RESPA Case

Former CFPB enforcement attorney Jennifer Lee said the Circuit Court was hostile towards the CFPB’s arguments on statute of limitations, separation of powers, constitutionality of the agency and more...


April 21, 2016 - IMFnews

NAR Tells Congress About Investor Problems Caused by TRID – and Lenders Not Willing to Share the CD

NAR voiced its dismay that some mortgage bankers are making it difficult for Realtors to obtain a copy of the closing disclosure form or CD...


April 21, 2016 - IMFnews

Six Months After TRID Implementation, Closing Times Finally Start to Improve … But Not By Much

Closing times are improving but not by leaps and bounds.


April 20, 2016 - IMFnews

Mortgage Complaints Down Across the Board – According to the CFPB

Wells Fargo was the subject of more mortgage complaints than any other player in the sector. Then again, Wells is both the largest lender and servicer.


April 20, 2016 - IMFnews

It was Thought the TRID ‘Scratch & Dent Market’ Would Peter Out. It Hasn’t

To date, Mid America has bought roughly $115 million worth of product with TRID errors...


April 20, 2016 - IMFnews

How to Beat TRID in the MBS Sector: Issue Securities Backed by Investment Properties

Investors take note: The collateral has a current interest rate of 8.15 percent.


April 19, 2016 - IMFnews

Short Takes: Wells Fargo Stays the Course on FHA / But FHA Production Drops / A Large MSR Auction from Prestwick / A FHLB Deal from Phoenix / New Hires for New Penn and Ellie Mae

Wells Fargo spokesman Tom Goyda called FHA lending an “important tool” for the bank.


April 19, 2016 - IMFnews

GOP Votes to Subject CFPB to Congressional Budget Process

The American Bankers Association said it “strongly supports the principle of accountability and balance, and commends the sponsor of this measure for working to improve the accountability of the bureau.”


April 19, 2016 - IMFnews

Senate Banking Chair Wants GAO and CBO to Investigate Change in Course at the FHFA

Shelby noted that Congress “has a responsibility to conduct proper oversight” over the FHFA and the GSEs.


Poll

Does your lending shop have any plans to make non-jumbo, non-QM loans this year? These would be loans similar to "Alt A" and subprime products made BEFORE standards were loosened severely in the 2004 to 2007 era.

Yes.

33%

No.

33%

It’s under consideration, maybe by 3Q or 4Q.

26%

We were going to until the TRID "error" mess hit.

7%

Housing Pulse