California. The state amended a number of its mortgage loan originator licensing provisions under the California Finance Lenders Law last week, including one amendment that permits applicants who have an expunged or pardoned felony conviction to obtain a license. The underlying crime, facts or circumstances can be considered when determining whether to issue a license. Another amendment permits a person exempt from the California Finance Lenders Law to register with the Commissioner of Corporations so as to sponsor one or more individuals required to be licensed under the SAFE Act if specific requirements are met.

One of the emerging supervisory issues for state-regulated mortgage lenders is whether there should be some sort of formal ombudsman office or function within the Multistate Mortgage Committee or at least perhaps an informal “feedback loop” in the context of a multistate examination, according to lender representatives, industry attorneys and state officials themselves. “Right now, there is no formal or even informal feedback loop for licensed companies who are dealing with MMC issues to go back to the Conference of State Bank Supervisors or American Association of Residential Mortgage Regulators to talk about issues in general,” explained Donald Lampe, partner and head of the financial services regulatory and compliance practice at Dykema.

After 11 months of negotiations, the odds that the multistate attorneys general talks with most of the nation’s top mortgage servicers will yield any substantive, long-term fruit seem to shrink daily, as officials from two states – including one of the biggest – have decided to bail, in lieu of possible independent litigation. “I have lost confidence that the banks will bring to the table an agreement that properly holds them accountable for wrongful foreclosures,” said Massachusetts Attorney General Martha Coakley, one of two state AGs to withdraw from the negotiations last week, along with California AG Kamala Harris. “Because our office for some time has anticipated that result, we have begun preparing for litigation.

The Consumer Financial Protection Bureau has developed a portal that companies can use to view and respond to entries in the new complaint database, Inside Regulatory Strategies has learned. “The company portal serves as the interface between the CFPB and financial companies, enabling companies to view and respond to complaints submitted by consumers,” the bureau said in a presentation to industry representatives recently. “Using the portal, companies should provide an explanation of the resolution and the actions taken in the consumer’s situation, select a resolution status for the complaint and attach relevant documents, if necessary.” The CFPB also maintains a consumer portal so complainants can check the status of their cases. Here’s an overview of the complaint process: A consumer files a complaint, then the CFPB routes the complaint to the company.

The U.S. Attorney’s office in Manhattan has entered into an agreement with the law firm of Steven J. Baum, one of the largest volume mortgage foreclosure firms in New York state, that requires the firm to pay $2 million to Uncle Sam and to extensively change its mortgage foreclosure practices. The agreement resolves an investigation into Baum’s mortgage foreclosure-related practices, specifically whether the firm, on behalf of its lender clients, filed misleading pleadings, affidavits and mortgage assignments in state and federal courts in New York.

President Obama’s nominee to head the new Consumer Financial Protection Bureau passed his first Congressional gauntlet last week, gaining the approval of the Senate Banking, Housing and Urban Affairs Committee, in spite of unanimous opposition from Republicans on the committee, who are more opposed to the CFPB than they are about whoever is nominated to run it. Late last week, the committee voted to send the nomination of Richard Cordray, currently the head of the agency’s enforcement division, to the full Senate on a straight party line vote 12-10. “Today’s Banking Committee vote on Richard Cordray is an important step forward for American consumers,” said Chairman Tim Johnson, D-SD. “The Consumer Financial Protection Bureau needs a director, and Mr. Cordray has proven he is qualified for the job. He should be confirmed by the full Senate as soon as possible.

The Multistate Mortgage Committee of the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators last week came out with examiner guidelines for use in reviewing non-depository mortgage loan originators’ and creditors’ compliance with the Federal Reserve Board’s mortgage loan originator compensation rules. The guidelines are intended to promote standardization and consistency within the state regulatory community regarding enforcement of the FRB’s rules. The Fed’s final rules for closed-end credit under Regulation Z introduced loan originator compensation restrictions to protect consumers against the unfairness, deception and abuse that can arise with certain loan origination compensation practices. The rules generally prohibit paying loan originators on the basis of loan terms and conditions, dual compensation to originators by consumers and any other person, and “steering” consumers to loans to receive greater compensation.

Wells Fargo and Bank of America continued to dominate the FHA market, accounting for 19.1 percent of total FHA originations in August, according to Inside FHA Lending’s analysis of agency data. Top-ranked Wells Fargo and second-place BofA accounted for $3.07 billion of the $16.06 billion in FHA-insured mortgages produced by approved lenders in August. The August volume was up 8.7 percent from July but down 34.0 percent on a year-over-year basis. In-house originations accounted for 70.9 percent of volume while home purchase loans made up 79.3 percent of loans made to borrowers during the month. An estimated 93.6 percent of loans insured by FHA were ...

A report on 2010 mortgage lending activity under the Home Mortgage Disclosure Act further confirms data that government-backed lending and overall purchase lending are falling – which may stall economic recovery, according to industry observers. While FHA and VA loans continue to account for a historically large proportion of loans, such lending fell more than did other types of lending, said the Federal Reserve in its analysis of the latest HMDA data. On a yearly basis, home purchase lending in 2010 was down almost 9 percent from 2009 and 62 percent lower than in 2006, when nearly 712,000 purchase mortgages were originated, the Fed said. The volume of home-purchase originations fell ...