The CFPB’s final amendments to its 2013 mortgage servicing regulations will enhance the industry’s practices and benefit the non-agency residential mortgage-backed securities market, according to analysts with Moody’s Investors Service. On the other hand, costs are going to go up, and the brunt of that burden will be borne by smaller servicers. “The new CFPB rules set forth multiple timeline requirements, compliance to which will require servicers to implement several system changes,” the analysts said in a new report. “Such changes will likely result in increased automation of servicing processes that will improve overall efficiencies.” However, implementation costs are going to go up because servicers will have to update their technology and adjust staffing levels to meet the new requirements...
The CFPB recently brought a $32.25 million enforcement action against First National Bank of Omaha, alleging deceptive marketing and illegal billing of add-on credit card products that it claimed harmed hundreds of thousands of borrowers. According to the CFPB, from 2002 until at least 2012, First National Bank of Omaha offered add-on debt cancellation products with its credit card, including products dubbed “Secure Credit” and “Payment Protection.” The bureau said the bank promoted these products as providing a monthly payment to the cardholder’s account in the event of certain hardships, such as involuntary unemployment, hospitalization or disability. Cardholders were charged a monthly fee for the products. First National Bank of Omaha also offered credit monitoring products, including “Privacy Guard” and ...
The CFPB recently brought a $4 million enforcement action against Wells Fargo, alleging the bank engaged in illegal private student loan servicing practices that increased costs and unfairly penalized certain student loan borrowers. “Wells Fargo hit borrowers with illegal fees and deprived others of critical information needed to effectively manage their student loan accounts,” said CFPB Director Richard Cordray. The bureau said it identified breakdowns throughout Wells Fargo’s servicing process, such as failing to provide important payment information to consumers, charging consumers illegal fees, and failing to update inaccurate credit report information. One of the CFPB’s charges against the company was that it processed payments in a way that maximized fees for many consumers. “Specifically, if a borrower made a ...
The American Bankers Association, the Consumer Bankers Association and The Financial Services Roundtable told the CFPB its controversial arbitration proposed rule “is not in the public interest, is not for the protection of consumers, and is not consistent with the CFPB’s March 2015 empirical study of arbitration,” as their attorneys at Ballard Spahr succinctly summarized their joint comment letter. Further, the groups urged the bureau to withdraw its proposal and to refrain from re-issuing another unless it is consistent with the statutory requirements of Section 1028 of the Dodd-Frank Act. “First, the proposed rule is not ‘in the public interest,’ nor does it meet the requirement to provide for consumer protection, because it would inflict serious financial harm on consumers ...
CFPB Proposes Changes to FOIA Procedures, Treatment of Information; Would Expand Disclosure of Confidential Supervisory Information to State AGs. The CFPB has proposed amendments to the procedures used by the public to obtain information from the bureau under the Freedom of Information Act, the Privacy Act of 1974, and in legal proceedings.... Bank of America Close to Fulfilling Settlement Obligations. Bank of America has conditionally fulfilled more than 91 percent of its obligation to provide $7 billion worth of consumer relief under the terms of its historic mortgage settlement agreement with the U.S. Department of Justice and six states, according to Eric Green, the independent monitor of the agreement...
Industry observers are weighing in on the redesigned Uniform Residential Loan Application, an industry standard that has largely remained the same for the past 20 years, until now. The GSEs published the new form last week to give lenders ample time to get familiar with it. The updated form won’t officially be in use until Jan. 1, 2018. The URLA is for single-family loans submitted to Fannie Mae and Freddie Mae, as well as mortgages insured by the FHA, VA or U.S. Department of Agriculture’s Rural Housing Services. The redesigned form falls under the larger Federal Housing Finance Agency and GSE initiative to standardize single-family mortgage data in the U.S.
Price is paramount to buyers purchasing a mortgage company, but equally important is bringing over the salesforce – namely loan officers – and making sure they stay happy under the new owners. That’s one of many insights contained in a new “In-Focus” report from The Stratmor Group, a consulting firm that plies its trade in the M&A circuit as well as other sectors of the industry. “While the numbers and related analysis are fundamental to the negotiating process, there is an ...
Although the new requirements could prompt an increase in costs, analysts said a new requirement aimed at increasing the number of times troubled borrowers are evaluated for loss mitigation will be particularly helpful in certain states…
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