The CFPB recently brought a $38.4 million enforcement action against Paymap Inc., a Colorado-based payment processing company, and a related action against LoanCare, LLC, a Virginia-based residential mortgage servicer, for allegedly deceiving consumers with advertisements for a mortgage payment program that promised tens of thousands of dollars in interest savings from more frequent mortgage payments. Specifically, the bureau determined that consumers were lured with deceptive promises of savings and misled them about when their payments would be applied. According to the bureau, the two companies together marketed and provided the “Equity Accelerator Program” – an electronic payment system that enables consumers to make automatic mortgage payments via electronic debits from their bank accounts. Consumers were usually charged a $295 enrollment fee ...

The CFPB brought a $1.6 million enforcement action against Residential Credit Solutions, Inc., a national mortgage servicing company for allegedly blocking consumers’ attempts to save their homes from foreclosure. The bureau accused the mortgage servicer of failing to honor modifications for loans transferred from other servicers, of treating consumers as if they were in default when they weren’t, of sending consumers escrow statements falsely claiming they were due a refund, and of forcing consumers to waive their rights in order to get a repayment plan. Residential Credit Solutions, based in Fort Worth, TX, has roughly $95 million in total assets. Since 2009, approximately 75,000 borrowers have had their loans transferred to the company, according to the CFPB. The company specializes ...

Late last month, the House Financial Services Committee passed a handful of industry-sought measures related to the CFPB, including H.R. 3192, the Homebuyers Assistance Act. The legislation would provide a hold harmless period until Feb. 1, 2016, for the TILA/RESPA Integrated Disclosure (TRID) rule that is slated to take effect Oct. 3, 2015. Attorney Richard Andreano, a partner in the mortgage banking unit at the Ballard Spahr law firm, said in a client note that prospects in the Senate, however, are somewhat murky. “An existing bill, S. 1711 (which is a companion bill to H.R. 2213), would provide for a TRID rule hold harmless period until Jan. 1, 2016,” he said. “The bill was introduced on July 7, 2015, and ...

The CFPB Office of Inspector General has completed its audit of the bureau’s controversial project to renovate its headquarters office building and found no cause for alarm. “We determined that construction costs appear reasonable based on comparisons to an independent cost estimate and the costs of two comparable building renovations identified by the U.S. General Services Administration,” said the OIG in a new report. “We also determined that potential renovation costs are below the amount previously budgeted and obligated for the renovation.” In addition, the OIG conducted a life cycle analysis to compare the costs of renting and renovating the building to leasing comparable space over a 30-year period.“We determined that the reasonableness of this decision is highly dependent ...

The Office of Inspector General for the CFPB has found that the bureau has moved to secure the Data Team Complaint Database, which supports the CFPB’s Consumer Response System (CRS) through which it handles consumer complaints. However, there are several control deficiencies that need to be remedied. “Overall, we found that the CFPB has taken steps to secure the DT Complaint Database in accordance with the Federal Information Security Management Act and the agency’s information security policies and procedures,” the report began. For example, the CFPB has deployed network-level firewalls and intrusion detection systems for the DT Complaint Database. “However, we identified several control deficiencies related to configuration management, access control, and audit logging and review,” the report added. “Specifically, ...

Consumer complaints about their student loan debt obligations rose slightly at the six-month mark, up 4.8 percent versus the previous year, according to a new analysis by Inside the CFPB. Month over month, gripes were down 4.0 percent. There was a good bit of variation in the numbers, company to company, during both time periods. But there was also a good bit of consistency within individual companies, with six of the top 10 rising or falling according to both metrics. For instance, top-ranked Navient saw consumer criticisms fall 6.8 percent quarter over quarter and 14.8 percent at the mid-year point compared with last year. Meanwhile, at second-ranked Genesis Lending, consumer complaints spiked 29.9 percent QOQ and skyrocketed more than 1,000 ...

The bank said it is cooperating with the two investigations, which could result in treble damages under The False Claims Act.

The U.S. Court of Appeals for the District Columbia recently issued a stay against a $109.2 million fine levied by the bureau against PHH Corp. related to the lender’s captive mortgage insurance activities. The bureau had initiated an administrative proceeding against the nonbank lender, accusing it of harming consumers through a mortgage insurance kickback scheme tied to a captive MI. A judge agreed and recommended a penalty of just $6.4 million, which the CFPB ignored and jacked up to $109.2 million, a figure the regulator argued represented all the MI premiums received after July 2008. What startled the industry was the CFPB’s decision to throw out previous guidance from the Department of Housing and Urban Development under which PHH and ...

Subsequent to the publication deadline for the previous issue of Inside the CFPB, American Honda Finance Corp. submitted a statement in response to the enforcement action brought against it late last month by the CFPB and the Department of Justice.“AHFC strongly opposes any form of discrimination, and we expect our dealers to uphold this principle as well,” said the lender. “We firmly believe that our lending practices have been fair and transparent. “AHFC has a difference of opinion with the CFPB and the DOJ regarding the methodology used to make determinations about lending practices, but we nonetheless share a fundamental agreement in the importance of fair lending,” the company added.In cooperation with the CFPB and the DOJ, AHFC...

CFPB Sends Questionnaire to Debt Collection Entities. The CFPB recently sent a questionnaire to a variety of debt collection firms, creditors and service providers in an effort to help the bureau “better understand operational costs and other factors associated with debt collection.” Noting that participation is voluntary, the consumer regulator said industry responses “will inform the bureau’s analysis of the costs and benefits of potential new rules related to debt collection.” The questionnaire asks about basic activities and operational costs of collecting debt, including, for example, questions about vendors used for activities such as dialers or print mailings, maintaining data about consumer accounts, and furnishing information to credit bureaus. “After we have received the questionnaire responses, we plan to reach ...