Mortgage industry participants reading tea leaves expect that the Consumer Financial Protection Bureau will write a definition of “qualified mortgages” that covers about 90 percent of current production, and they suggest that the long-awaited final rule could even boost originations. However, concerns remain about the liability that will come with QM originations and the clarity of the QM definition. Speakers at a panel discussion hosted by the American Securitization Forum this week predicted that the pending QM rule will cover a large majority of current mortgage production, based on previous comments from Richard Cordray, director of the CFPB. Edward Mills, a research analyst and senior vice president at FBR Capital Markets, added...
Fannie Mae, Freddie Mac and the FHA financed a record $31.2 billion in so-called conforming jumbo mortgages during the third quarter of 2012, according to a new Inside Mortgage Finance ranking and analysis. Business in conforming jumbo loans – defined as mortgages on one-unit properties that exceed $417,000 – rose 29.6 percent from the second quarter and represented the highest quarterly volume for the agencies since emergency loan limits went into effect back in 2008. Since that time, an estimated $363.0 billion of conforming jumbo mortgages have been originated. Conforming jumbo originations for the first nine months of 2012 reached...[Includes three data charts]
CFPB's Top Lawyer Lends a Hand. CFPB General Counsel Meredith Fuchs was reportedly named an adviser to the American Law Institute's project to create a "Restatement of the Law Third, Consumer Contracts," which had its first meeting on Nov. 30. Gail Hillebrand, the bureaufs associate director for consumer education and engagement, is said to have attended the meeting as a guest. The ALI's project could have major consequences for providers of consumer financial services and other companies that contract...
In a development that might catch the attention of officials at the CFPB who are working on improving consumer disclosures under the Real Estate Settlement and Procedures Act and the Truth In Lending Act, more evidence has emerged that consumers aren’t very big on using TILA forms to comparison shop for mortgages.A new study from Fannie Mae found that nearly half of lower‐income respondents and more than a third of higher‐income respondents get quotes from only one mortgage lender. The survey also confirms findings in other reports that “a substantial portion of all consumers do not understand key mortgage elements.”
Opponents of Elizabeth Warren as head of the CFPB will not only have to deal with the Massachusetts Democrat as a new member of the U.S. Senate during the 113th Congress, but also as a newly minted member of the Senate Banking, Housing and Urban Affairs Committee, which has legislative jurisdiction over the CFPB’s regulatory turf, numerous sources said. Warren reportedly received the strong support of Sen. Tim Johnson, D-SD, who is returning as chairman of the powerful committee, along with that of committee member Jack...
The anti‐predatory lending rules of the Dodd‐Frank Wall Street Reform and Consumer Protection Act – especially those related to mortgages and credit cards – are based on the theory of ‘behavioral economics.’ That in turn has produced a stronger kind of federal regulator, in the form of the CFPB, and in stronger consumer protection laws, according to a new legal abstract. “These new legislative and regulatory developments mark a shift from the ‘rational consumer’ theory that underlay the great disclosure statutes of the late 1960’s and early 1970’s, such as the Truth in Lending Act, and toward the rising influence of ‘behavioral economics’ as a guiding force in consumer protection,” explained Dee Pridgen, professor of law and social responsibility at the University of Wyoming College of Law. ...
The CFPB recently issued a bulletin reminding nationwide specialty consumer reporting agencies of their obligation under the Fair Credit Reporting Act to provide a streamlined process for consumers to request a free annual credit report. The bulletin indicates that in order to be in compliance with the FCRA, which the CFPB oversees, nationwide specialty consumer reporting agencies must provide a toll-free number that is published in every telephone directory in which a number for the company appears, and which is clearly and...
In a concession to concerns expressed by industry representatives, the CFPB recently announced it plans to issue a proposal sometime this month to make certain limited changes to its rule on international money transfers, as well as to extend the rule’s effective date until 90 days after the proposal is finalized.“Some regulated entities identified issues that pose practical challenges in implementing the new law,” the bureau said in announcing its intention to propose a narrow set of changes to the remittance rule. “The proposed changes would improve implementation of the new law while keeping the important new protections for consumers intended by the Dodd‐Frank Act,” the CFPB said.
The CFPB could be reconsidering its practice of having enforcement attorneys participate in the supervisory examination process, according to the fiscal year 2012 report from the bureau’s Ombudsman Office. When the CFPB was first being set up, it considered the experiences of other agencies and decided to make supervision and enforcement an integrated process within one division at the bureau, and to involve enforcement attorneys at the beginning, middle and end of the supervision examination, according to the report...
It shouldn’t be much of a surprise that 80 percent of the contact the CFPB’s Ombudsman Office received during its first year of operation was from consumers. However, the office’s first fiscal year report suggests that, for all its traditional and nontraditional outreach to consumers, such as the bureau’s social media efforts, much work remains to be done to give consumers a clear understanding of how to navigate the agency’s consumer complaint process. According to the ombudsman’s report...
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