The attorneys general of 15 states came to the defense of PHH Corp. and related parties in their case with the CFPB over the agency’s interpretation and enforcement of the Real Estate Settlement Procedures Act.The AGs of Alabama, Arizona, Arkansas, Georgia, Idaho, Indiana, Kansas, Louisiana, Missouri, Nevada, Oklahoma, South Dakota, Texas, West Virginia and Wisconsin focused on the constitutional issues in the case, with not a single mention of the statutory questions related to the act. The AGs made three major arguments in support of PHH’s position. First, they asserted that the separation of powers plays a critical role in preserving the division of authority within the federal system, and the CFPB’s governance structure violates the separation of powers ...

PHH Corp. and related parties again made a full defense of their position in their legal struggle with the CFPB over alleged misconduct under the Real Estate Settlement Procedures Act. PHH made five primary arguments to the U.S. District Court of Appeals for the District of Columbia Circuit, the first of which was that the CFPB is unconstitutionally structured and must be invalidated. …

The years-long legal battle that PHH Mortgage and PHH Corp. have been waging with the CFPB continues to take sudden and unexpected turns. One recent example: PHH filed a brief in opposition to the plaintiffs in State National Bank of Big Spring, Texas, et al. v. Lew from intervening in the mortgage lender’s case with the CFPB. …

With legal briefs continuing to be filed in PHH Corp. v. CFPB, mortgage experts on the Real Estate Settlement Procedures Act see a bit of a silver lining, along with multiple warnings, in the handful of consent orders the CFPB brought against other industry defendants on the RESPA front. Earlier this year, the CFPB brought a $3.5 million enforcement action against Prospect Mortgage, accusing the firm of illegal kickbacks for mortgage business referrals from two real estate brokers, and in an unusual twist, a mortgage servicing operation. The bureau also acted against ReMax Gold Coast and Keller Williams Mid-Willamette, the brokers, and Planet Home Lending, the mortgage servicer – all of whom it accused of taking illegal kickbacks. During an exclusive ...

The Republican-controlled U.S. House of Representatives recently passed H.R. 1009, the OIRA Insight, Reform, and Accountability Act, legislation that would require the Office of Management and Budget to examine major rulemakings – those projected to have an impact of $100 million or more on the economy per year – by independent agencies, including the CFPB, prior to issuance. The measure, introduced earlier this year by Rep. Paul Mitchell, R-MI, would codify many executive orders and practices of the federal government related to the process of issuing federal regulations. Those instructions require agencies in the executive branch to analyze the impacts of regulations (including costs and benefits), to coordinate with the Office of Information and Regulatory Affairs (OIRA) during the rulemaking process, and ...

The CFPB’s integrated disclosure rule under the Truth in Lending Act and the Real Estate Settlement Procedures Act proved to be the primary source of mortgage lenders’ quality control (QC) headaches in 2016, the first full year of the rule’s implementation, a new industry report concluded. According to a review of thousands of post-close QC audits performed by MetaSource, a Utah-based third-party mortgage compliance service provider, TRID accounted for 12 of the top 15 findings of QC issues. The six most frequent findings were issues with TRID requirements. The single most frequent issue involved correspondence of information listed in the Calculating Cash to Close table on page 3 of the closing disclosure (CD) to the information cited on the last ...

Individuals with bad or no credit who are thinking about taking out a mortgage should proceed with caution if a lender has offered them a subprime loan, an official from the CFPB advised recently. In a blog posting last week, Megan Thibos, a policy analyst with the CFPB’s mortgage markets team, talked about the homebuying process for people with poor credit scores. Thibos suggested that borrowers should review their credit scores, make sure their credit reports are correct, and work to rebuild their credit. Then she detailed various mortgage options available to borrowers with poor credit, focusing on FHA mortgages. That was followed by “a warning about subprime mortgages.” Thibos said subprime mortgages have significantly higher interest rates than prime ...

Mortgage lenders’ efforts at compliance with post-financial crisis regulation, largely from the CFPB, shifted their focus from fully implementing e-mortgage processes but also helped them develop the necessary technology to move forward with them in the future, according to a new report from analysts at Moody’s Investors Service. “Following the crisis, lenders focused on adapting technology to implement regulations such as the ability-to-repay [qualified mortgage] rule and the TILA-RESPA Integrated Disclosure rule rather than on e-mortgages,” the analysts said. “The implementation of those regulations has, however, led to advancements in the technology needed to originate e-mortgages by providing, for example, a seamless data feed between the mortgage loan application and the disclosure documents.” Further, “Some lenders and servicers have also ...

Nationstar in the CFPB’s Crosshairs Over HMDA Reporting. Nationstar, the residential mortgage servicer, revealed recently it is being investigated by the CFPB over issues related to complying with the Home Mortgage Disclosure Act.... Non-Agency MBS Issuers Like the Legal Protection of the ATR. Congressional Republicans may be working on legislation to repeal and replace many regulations required by the Dodd-Frank Act, but some issuers of mortgage-backed securities are actually pushing to maintain some of the regulations.... Trump Executive Order on Regulatory Red Tape Unlikely to Apply to CFPB. Will the Bureau Comply Anyway? The executive order that President Trump signed in the middle of February that requires every federal agency to establish a regulatory reform task force to eliminate red tape probably does not apply to the CFPB, according to industry experts....

New issuance of single-family mortgage-backed securities by Fannie Mae and Freddie Mac fell 30.6 percent from January to February as the refinance business continued to weaken.The two GSEs issued a combined $63.67 billion of single-family MBS last month, according to a new Inside The GSEs analysis and ranking. Absent a heavy refi flow, February is typically the low point in the annual cycle. A year ago, combined Fannie/Freddie production totaled just $50.05 billion in February. Production in the first two months of 2017 was up 45.7 percent from the same period last year, with big gains in both purchase (up 42.7 percent) and refi business (up 57.7 percent). But while purchase-mortgage lending is...