Most of the CFPB’s requirements stemming from its blizzard of mortgage rulemakings in January take effect sometime next year. But there are a few notable exceptions, including the Truth in Lending Act ban on mandatory arbitration provisions in certain mortgage loans, which kicks in June 1, 2013. “Lenders now using mortgage loan documentation containing such provisions should take steps to ensure that they (and references to them) are removed from documentation to be used for loans that will be subject to the ban,” said Alan...
Aspects of the CFPB’s ability-to-repay rule and ‘qualified mortgage’ standards may make credit access difficult for homebuyers with low credit scores, including many low-income and first-time homebuyers, Federal Reserve Board Governor Elizabeth Duke said recently. “First, the QM requirement that borrower payments on all debts and some recurring obligations must be 43 percent or less of borrower income may disproportionately affect less-advantaged borrowers,” Duke said. “Board staff tabulations based on the Survey of Consumer Finances...
Federal action to help student loan borrowers deal with ever-increasing amounts of debt seems more likely to occur, after the CFPB issued a report highlighting how such debt burdens could be having a host of wide-ranging negative effects on the economy and society at large. Lawmakers in both the House and Senate issued statements and proposed bills to address the debts of student borrowers as the CFPB was issuing its report on student loan affordability. Sens. Elizabeth Warren, D-MA, Jack Reed, D-RI...
Based on a referral from the Federal Deposit Insurance Corp., the CFPB has compelled a Texas homebuilder to surrender more than $100,000 he received in alleged kickbacks for referring mortgage origination business to entities the bureau asserts are sham mortgage companies. According to the CFPB, the homebuilder, Paul Taylor, received illegal referral fees through partnerships with Benchmark Bank and Willow Bend Mortgage Company. Taylor and Benchmark created and jointly owned Stratford Mortgage Services LC, which claimed to...
U.S. Sen. Mike Crapo, R-ID, ranking member of the Senate Banking, Housing and Urban Affairs Committee, wrote CFPB Director Richard Cordray late last week, requesting prompt answers to legal concerns surrounding the massive data collection effort undertaken by the agency on consumer spending habits. News reports in recent weeks have indicated the agency has allocated more than $20 million for collecting and tracking customer credit card and spending habits for more than 10 million Americans. After the senator and the...
Based on a criminal referral from the CFPB, the Justice Department has filed a complaint in New York against Mission Settlement Agency, a debt relief agency that allegedly charged illegal fees to consumers for debt settlement services. The charges are the first generated by such a referral from the CFPB, which filed its own civil complaint against Mission and another company. Last week, federal officials unsealed an indictment charging Mission Settlement Agency, its owner Michael Levitis, and three of its employees – Denis Kurlyand...
Senate Majority Leader Harry Reid, D-NV, indicated last week he plans to push for a Senate confirmation vote sometime this week on President Obama’s nomination of Richard Cordray to continue at the helm of the CFPB. “I’m going to make sure he’s going to have a vote next week, and then we’ll see what happens after that,” Reid said last week, according to one press account. When pressed by reporters if he would use what’s often referred to as the “nuclear option” and force a change in the Senate rules to override the 60 votes needed...
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