The Consumer Financial Protection Bureau has come out with an extensive set of proposed rules addressing numerous mortgage servicing issues in the form of two related notices designed to protect homeowners from surprises and costly mistakes by their mortgage servicers. The first proposal aims to give borrowers clear and timely information about their mortgages so they can avoid costly surprises, and would bring greater transparency to the market, according to the bureau. The proposed rule would try to do this...

The Consumer Financial Protection Bureau late last week released a proposed mortgage loan origination regulation, and perhaps most notable is what’s not in it – a required flat fee – a decision likely to be embraced by mortgage lenders. In a conference call with reporters, bureau officials said that after consulting with industry representatives and community advocates, the CFPB concluded a flat fee proposal would not be in consumers’ best interests. The Dodd-Frank Wall Street Reform and Consumer Protection Act places...

The Federal Housing Finance Agency became the biggest opponent of proposals for local governments to use eminent domain to seize underwater loans from non-agency mortgage-backed securities. “FHFA has determined that action may be necessary on its part to avoid a risk to safe and sound operations at its regulated entities and to avoid taxpayer expense,” the conservator of the government-sponsored enterprises said in response to the proposed use of eminent domain to forgive principal on mortgages ...

VA Flunks ‘Plain Writing’ Test. The Department of Veterans Affairs got an “F” for not following the requirements of the Plain Writing Act, which directs federal agencies to take steps to ensure they are communicating clearly with businesses, consumers and stakeholders. The statute went into effect July 2011 and the Center for Plain Language, a nonprofit organization that grades government agencies on their efforts to comply with the Act, evaluated and graded 12 agencies for compliance. The center gave two grades – the first grade represents how well the agency followed the requirements of the act, and the second grade reflects ...

Ocwen Financial Corp. and joint venture partner Altisource will soon be buying FHA-insured loans from lenders through a special vehicle, Correspondent One, for future securitization. In its second quarter filing with the Securities and Exchange Commission, Ocwen said it expects Correspondent One will be able to use its relationship with Lenders One to grow its volume substantially. “Correspondent One has seen significant, positive environmental changes in the correspondent lending market, [and] there has been a contraction in correspondent lending,” Ocwen said, alluding to ...

A proposed rule that would require a flat fee for originating a mortgage loan with a Department of Veterans Affairs guaranty could do borrowers and lenders more harm than good, warned a coalition of financial services providers. The proposal is part of an upcoming Consumer Financial Protection Bureau rulemaking to implement certain provisions under the Dodd-Frank Act relating to loan originator compensation. The rulemaking raises a number of technical drafting issues that could have unintended consequences, cautioned ...

The rising delinquency rates for FHA-insured mortgage loans could spell trouble down the road for the FHA as it struggles to shore up its dwindling loss reserves, according to a new Fitch Ratings analysis. But the chief economist for the Mortgage Bankers Association has a slightly different take on that issue. Fitch analyst Brian Bertsch said a growing gap between seriously delinquent (90-day past due) guaranteed and non-guaranteed loans could presage future losses that could prompt the FHA to restrict loss claims and force banks to buy back defaulted loans. This could be the scenario ...

The recent enactment of the Honoring America’s Veterans and Caring for Camp Lejeune Families Act of 2012 includes a number of changes to the Department of Veterans Affairs’ Loan Guaranty program, including reverting to the VA’s previous method of calculating maximum guaranty. The restoration of the previous method used to derive VA loan limits has resulted in the increase of some loan limits, according to guidance issued by the agency last week. While VA does not have a maximum loan amount, “county limits” must be used to calculate the maximum VA guaranty for a particular county. The maximum VA loan limit for 2012 in high-cost areas is ...

The Department of Housing and Urban Development is working in tandem with the Consumer Financial Protection Bureau to align servicing standards for both FHA and non-FHA mortgage loans. In a statement issued after the CFPB’s recent issuance of proposed national mortgage servicing standards, HUD underscored the importance of uniform servicing standards. “Given CFPB’s rulemaking, HUD does think it is important to not revise its servicing rules in a vacuum but to consider the work being done by the CFPB,” he said. “To that end, HUD is in communication with the CFPB and reviewing their materials.” The department is collaborating with an ...

The Department of Housing and Urban Development is looking into SunTrust Bank’s FHA-related lending practices, the bank reported in its latest regulatory filing. SunTrust, Atlanta’s largest bank, disclosed the investigation in its second-quarter filing with the Securities and Exchange Commission but provided no additional details. HUD notified the bank of the probe on April 25. SunTrust said it is “cooperating with the investigation,” which is being conducted by HUD’s Office of the Inspector General. The bank did not respond to a request for comment and the IG office neither ...