A proposal from House Republicans to treat mortgage loans held in a bank’s portfolio as qualified mortgages received divergent reviews at a recent hearing by the House Financial Services Committee.The proposal was included in the Financial CHOICE Act sponsored by Committee Chairman Jeb Hensarling, R-TX. Treating mortgages in bank portfolios as QMs would provide QM status to loans that would otherwise fail to meet those standards, including interest-only products and mortgages not eligible for sale to the government-sponsored enterprises Fannie Mae and Freddie Mac because the debt-to-income ratios are above 43.0 percent. Adam Levitin, a professor of law at Georgetown University Law Center, said the Financial CHOICE Act would “eviscerate” consumer protections in mortgage lending.

In May, the Supreme Court of the United States ruled in Robins v. Spokeo, Inc. that a plaintiff has to demonstrate that he or she suffered “concrete” and “real” harm in order to have standing under Article III of the U.S. Constitution to successfully sue for statutory damages under the Fair Credit Reporting Act.The CFPB has previously argued that is not necessarily so, and with the SCOTUS remanding the case back to the U.S. Court of Appeals for the Ninth Circuit, the bureau has recently reiterated its argument in an amicus brief with the lower court. The specific question in this case is whether the plaintiff (Robins) identified an injury-in-fact under Article III of...

In State National Bank of Big Spring, Texas, et al. v. Lew, et al., the U.S. District Court for the District of Columbia has shot down the latest attempt to void the actions taken by CFPB Director Richard Cordray while he was still a recess appointee. At issue are several CFPB rulemakings, such as those having to do with electronic fund transfers, integrated mortgage disclosures, escrow requirements, ability to repay/qualified mortgages, and mortgage servicing. On July 18, 2011, President Obama first nominated Cordray to serve as director of the bureau. When the Senate took no action on that nomination, Obama appointed him to the position on Jan. 4, 2012, invoking his...

GOP Legislation Would Exempt Small Nonbank Lenders from CFPB Examination, Enforcement. Rep. Roger Williams, R-TX, recently introduced H.R. 5907, the Community Mortgage Lenders Regulatory Act of 2016, which would exempt qualifying smaller, “responsible” nonbank lenders from CFPB examinations and primary enforcement authority. To qualify, a nonbank mortgage lender must have net worth of less than $50 million; have originated fewer than 25,000 loans or $5 billion in loans the preceding year; and have originated at least 95 percent of their mortgage loans as qualified mortgages the last three years. As currently applies to most banks, a qualifying “responsible community lender” would not be subject...

CFPB Makes Some Senior Staff Changes. Last week, the CFPB announced some senior-level staffing changes. Among them, Chris D’Angelo, currently the bureau’s chief of staff, will serve as the associate director for supervision, enforcement and fair lending. He joined the CFPB in June 2011 and previously served as senior advisor to the director and as an attorney in the Office of Enforcement. D’Angelo came to the bureau from the U.S. Treasury Department, where he was senior advisor to the undersecretary for domestic finance and worked on financial regulation. Richard Lepley, currently the deputy general counsel for general law, ethics and oversight, will assume the position of principal deputy general counsel in the office of the general counsel in the legal division.

CFPB Debt Collection Field Hearing This Week. The CFPB plans to convene a public field hearing July 28 on debt collection issues, at a location in Sacramento, CA, that has yet to be announced. The field event is to feature remarks by CFPB Director Richard Cordray, followed by a panel discussion with consumer advocates and industry representatives, and concluding with testimony from members of the public. The hearing, which is scheduled to begin at 11 a.m. PDT, is expected to be livestreamed at consumerfinance.gov. Congress is Now in Recess. The U.S. Senate and House of Representatives have recessed for the summer and are scheduled to return...

Wells Fargo handled 20.2 percent of the $841.42 million in agency mortgages outstanding at the end of the second quarter of 2016 that had interest rates between 4.510 percent and 5.000 percent.

State regulators had removed a clause from previous forms which said information from the submitting lender was “to the best of my knowledge, information and belief.”

“Most real estate agents say high loan-to-value ratio mortgages are readily available, especially for homebuyers with good credit,” said Tom Popik, research director for Campbell Surveys.

With the possibility of investors transferring non-agency servicing rights away from Ocwen Financial, Altisource Portfolio Solution has put an emphasis on providing services to other companies.