Small and medium-sized mortgage servicers want the Consumer Financial Protection Bureau to allow flexibility to accommodate different business models as the agency drafts new national servicing standards that are expected to increase costs. The CFPB rulemaking process is somewhat unique because the Dodd-Frank Act requires that it take small business interests into account as it develops new regulations. The agency recently convened a panel under the process required by the Small Business Regulatory Enforcement Fairness Act to weigh the impact of new servicing requirements on smaller lenders. “The panel agreed...

The ongoing feud between Congressional Democrats and the Federal Housing Finance Agency appeared to boil over this week as the FHFA’s head answered back to charges that he’s been holding back pertinent information about the agency’s analysis of principal reductions. In a May 1 public letter to FHFA Acting Director Edward DeMarco, Reps. Elijah Cummings, D-MD, and John Tierney, D-MA, accused the agency head of playing fast and loose with the facts regarding a previously unreported 2010 Fannie Mae pilot program to forgive a borrower’s mortgage debt, as well as the facts buttressing the FHFA’s position...

Mortgage lenders large, small and in-between jockeyed for position against a backdrop of slowing new home loan originations during the first quarter of 2012. A new Inside Mortgage Finance market analysis and ranking found that an estimated $385.0 billion in new single-family mortgages were originated during the first three months of the year. That was down 3.8 percent from the fourth quarter. The two most striking trends were that 10 of the top 25 lenders posted increased production volume while the others reported declines – some of which were substantial – and nearly all top...(Includes two data charts)

The Financial Crimes Enforcement Network’s latest report on mortgage loan fraud reported suspicious activity reports (MLF SARs) shows financial institutions submitted 92,028 MLF SARs last year, a 31 percent increase over the 70,472 submitted in 2010. FinCEN attributed the increase mostly to mortgage repurchase demands. On the other hand, financial institutions submitted 17,050 MLF SARs in the 2011 fourth quarter, a drop of 9 percent over the same period in 2010 when financial institutions filed 18,759 MLF SARs. “While too soon to call a trend, the fourth quarter of 2011 was the first time since...

Federal Reserve Board.Federal Deposit Insurance Corp.Office of the Comptroller of the Currency.Consumer Financial Protection Bureau.National Mortgage Servicing Standards Continue. The interagency group of federal banking regulators continues to work to develop prudential standards for mortgage servicing activities in parallel with the Consumer Financial Protection Bureau’s initiative, which focuses on certain aspects of mortgage servicing...

Illinois. Gifford State Bank, the defendant lender in Re Crane (Case 11-90592, U.S. Dist Ct, C.D. IL), recently appealed the February ruling of the U.S. Bankruptcy Court for the Central District of Illinois, a decision that let a bankruptcy trustee avoid an Illinois mortgage as to other creditors of the estate because the mortgage failed to expressly state the maturity date and interest rate of the underlying debt. Legislation that would contravene the Crane decision has been introduced in the state House of Representatives with the hope it can be passed before the May 31 end of the session...

The Financial Stability Board has published principles for sound residential mortgage underwriting practices, emphasizing that participating jurisdictions should make sure lenders are effectively verifying income and other financial information, insisting on reasonable debt service coverage and appropriate loan-to-value ratios, engaging in effective collateral management, and making prudent use of mortgage insurance. The FSB said some or all of the principles may not necessarily be appropriate or applicable for certain niche forms of finance. But jurisdictions should...

The forthcoming combined Truth in Lending Act and Good Faith Estimate disclosure form and related rule pending at the Consumer Financial Protection Bureau is at the top of the list of greatest compliance concerns of mortgage lenders, according to the fourth annual compliance survey by QuestSoft, a provider of compliance software and services to the mortgage industry. Of the 426 lenders that were surveyed on their level of anxiety for regulatory changes, a whopping 81 percent identified this CFPB project as at least a medium (33 percent) or a high (48 percent) concern...

A homeowner does not have a private right of action against his mortgage servicer under the Obama administration’s Home Affordable Modification Program, the U.S. Court of Appeals for the Eleventh Circuit ruled late last week. In this case, the borrower, Jason Miller, owned a parcel of real property in Hiawassee, GA, which he was able to purchase by taking out a mortgage loan from the unidentified predecessor of the defendant, Chase Home Finance, LLC (Chase). In February 2009, Miller asked for a loan modification from Chase, citing financial difficulties. Chase agreed to...

The Consumer Financial Protection Bureau has put together a second panel, as per the Small Business Regulatory Enforcement Fairness Act, tasked with giving the bureau input on the mortgage servicing rules proposal that the CFPB is working on under the Dodd-Frank Wall Street Reform and Consumer Protection Act. “The SBREFA requires the CFPB to convene a small business panel before rolling out regulations that the CFPB director expects to have a significant impact on a substantial number of small business entities,” explained Barbara Mishkin, of counsel in the consumer financial services group...