Meanwhile, investors are beginning to focus on some of the contractual language in the sale agreement between New Residential Investment Corp., and Home Loan Servicing Solutions...
Rep. Waters Wants Clarity on Corinthian Student Loan Refunds. House Financial Services Committee Ranking Member Maxine Waters, D-CA, wants more clarity about the recent agreement to provide $480 million in financial relief to students wrestling with predatory loans from now-defunct Corinthian Colleges. In letters to CFPB Director Richard Cordray and David Hawn, president and CEO of Education Credit Management Group, the company that acquired a majority of the college’s campuses, Waters said, “[A]s you both well know, the student loan servicing industry, much like the mortgage servicing industry, has often worked as a disservice to its customers. “Furthermore, students who are to receive private debt relief were intentionally misled when the debt was incurred, and there is undoubtedly confusion among ...
With many small and mid-tier mortgage companies and banks increasingly worried about straying from compliance with the CFPB’s expanding rules and requirements, vendor representatives are working overtime to alleviate their clients’ anxieties and keep them on task and on budget. “We’re really seeing a lot of fear in the CFPB’s steadily intensifying regulations and requirements,” said Mary Beth Doyle, founder and co-owner of Loyalty Express, a mortgage marketing technology vendor in Woburn, MA. As recently as a year or a year-and-a-half ago, companies were saying they would wait to hear about a new rule themselves from the CFPB. “And today, people are more panic driven. There’s this sense of paralysis because everyone’s afraid of stepping out of bounds and not ...
The CFPB could issue its long-awaited payday loan proposed rule as early as July, according to Isaac Boltansky, an analyst with Compass Point Research & Trading in Washington, DC. “We expect the CFPB to initiate a Small Business Regulatory Enforcement Fairness Act (SBREFA) panel in the days ahead, which will serve as the starting gun for a rulemaking process we expect to last through 2015,” Boltansky said in a recent client note. “Given the contentious and complicated nature of the small-dollar rulemaking effort, we estimate that the proposed rule will be released this summer with the final rule release possibly slipping to 2016.” More specifically, he expects the SBREFA panel to convene at least by the end of February. From ...
Jack Guttentag, professor of finance emeritus at the Wharton School of the University of Pennsylvania, advises borrowers to ignore the CFPB’s controversial online rate checker tool. “It is completely useless,” he asserted in a recent online blog post. “The tool a borrower needs is a ‘shopping rate,’ a rate that a competing lender should match or better. The CFPB shows a distribution of rates, and leaves it to the shopper to decide which rate in the distribution is the shopping rate, while providing no guidance on how to do it.” For example, given the loan features he entered on Feb. 10, the CFPB tool told Guttentag that, “In Pennsylvania, most lenders in our data are offering rates at or below ...
A number of industry groups ramped up their efforts to convince the CFPB to revisit its auto financing enforcement policy, after the release of an industry-funded report that challenged the analysis that undergirds it. The impetus behind the challenge is a Charles River Associates study commissioned by the American Financial Services Association that analyzed the complexities of the indirect finance market and evaluated the CFPB’s current fair lending investigations, with special attention to the proxy methodology used by the bureau. The CRA study concluded that “observed variations in ‘dealer reserve’ at the financial institution portfolio level are mitigated when market complexities are considered and adjustments are made for proxy bias and error.” This suggests to industry representatives that there are ...
Two of the big three credit reporting firms saw consumer complaints about their practices leap by triple digits in the 12-month period ending Dec. 31, 2014, according to an Inside the CFPB analysis of bureau data. The leap comes despite a double-digit drop in gripes directed towards all three firms during the fourth quarter. As noted previously, given how relatively recent the bureau’s data collection efforts in this space have been, it would be premature to definitively conclude what may be driving these increases. However, to date, it appears there is a strong seasonal surge in complaints in the first quarter of the year – perhaps because of issues or problems related to Christmas holiday shopping. For instance, in the first ...
The top complaints consumers have about reverse mortgages are the inability to change their loan terms, servicer runarounds and foreclosure problems, according to a new report from the CFPB. More specifically, the top complaint involves distress about the inability to add new borrowers to an existing loan. “Reverse mortgages prohibit spouses, heirs and dependents from taking over the loan. This is because loan amounts are, in part, calculated using a borrower’s age and the loan repayment is triggered when the last borrower moves out or dies,” the bureau said. “This can be a problem for surviving spouses and children. Family members complained to the CFPB about not being able to be added to the loan so they could keep the ...
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