The National Association of Mortgage Brokers is tapping into national policymakers’ anxiety over job creation to press the Consumer Financial Protection Bureau to rescind its loan originator compensation rule. Ever since the early April implementation of the Federal Reserve Board’s Regulation Z Truth-in-Lending rule on steering and LO compensation, consumers have experienced a “dramatic increase in costs on their mortgages,” the NAMB said, and the regulation has become “a great impediment on the vital service of mortgage lending throughout local communities.” The group also complained about the overall regulatory compliance burden of a seemingly ever-increasing amount of regulations coming out of Washington, DC.

Bank of America’s 2008 purchase of Countrywide Financial Corp. continues to be an albatross around BofA’s neck, with U.S. Bancorp. filing suit against the largest lender in the land to compel it to repurchase mortgages sold by Countrywide back in 2005. U.S. Bancorp, which filed the lawsuit as a trustee on behalf of several unnamed investors, alleges breaches of representations and warranties, claiming Countrywide disregarded its own mortgage underwriting guidelines when it issued the loans at the center of the dispute. The 4,000 mortgages involved originally totaled $1.75 billion in principal. Countrywide agreed to buy back the loans within 90 days of the purchase date if any of the statements made in the loan contract were untrue, including an assertion that the loans complied with the bank’s underwriting guidelines, according to the complaint.

The Stauffer and Nathan, P.C. law firm of Tulsa, OK, recently filed a federal class action in the U.S. District Court of the Northern District of Oklahoma against Wells Fargo and Experian, Equifax and Trans Union. The complaint accuses Wells of engaging in illegal mortgage servicing practices and “ramrod unlawful foreclosures” and alleges the major credit bureaus participated in erroneous credit reporting due to their “reckless failure to conduct independent investigations and just parroting the false and negative information supplied to credit bureaus by Wells Fargo.” The plaintiffs contend Wells Fargo “continues to engage in a free-for-all campaign to harass and disparage Oklahoma homeowners with unjustified foreclosure proceedings.” They also claim abuse of process, malicious prosecution, intentional infliction of emotional distress, and numerous violations of state and federal consumer protection statutes.

With the shelf life of the National Flood Insurance Program about to expire once again, the Senate Banking, Housing and Urban Affairs Committee last week passed the latest program reauthorization legislation, the “Flood Insurance Reform and Modernization Act” that includes a five-year extension of the NFIP along with various program reforms. This bill would reauthorize the program and its funding through 2016, phase in premium rates that more accurately reflect the risk facing a property, and allow for the NFIP to build reserves and modernize flood maps. The bill also requires that lenders provide to all purchasers a disclosure of the availability of flood insurance under the Real Estate Settlement Procedures Act.

Baron and Budd, a national plaintiffs’ law firm based in Los Angeles, is eyeing a possible class action against some top mortgage banks by investigating so-called equity accelerator programs, said to be offered by JP Morgan Chase, Citibank, Wells Fargo and numerous other banks and mortgage lenders. The programs are apparently being promoted as something that can help save substantial money on a home mortgage. However, the lawyers say banks are taking advantage of people enrolled in the program by failing to apply funds to the mortgage on the same day they are withdrawn from the customers’ accounts, meaning that consumers are essentially giving the bank a loan without their knowledge – and ultimately saving no money on their home mortgage.

Goldman Sachs will likely have no appetite to wade back into the mortgage servicing business anytime soon, following the enforcement action taken against it last week by the Federal Reserve Board – a regulatory move that still leaves monetary penalties on the table and likely to be imposed before long. The action orders Goldman Sachs to retain an independent consultant to review foreclosure proceedings initiated by Litton Loan Servicing LP, Goldman’s former mortgage servicing platform, that were pending at any time in 2009 or 2010. The review is intended to provide remediation to borrowers who suffered financial injury as a result of wrongful foreclosures or other deficiencies identified in a review of the foreclosure process, according to the Fed.

Iowa Attorney General Tom Miller, who’s heading up the 50-state settlement talks with the nation’s top mortgage servicers over industry foreclosure practices, is defending the decision to proceed without the direct participation of New York Attorney General Eric Schneiderman. In a letter to the New York delegation to the U.S. House of Representatives, Miller rejected the assertion that the state AGs had removed Schneiderman from the negotiation table. “New York State Attorney General Eric Schneiderman voluntarily walked away from the negotiation table in June,” Miller said.

Overlooked in the often rancorous partisan sniping during last week’s hearing to consider the nomination of Richard Cordray as the first director of the Consumer Financial Protection Bureau were some remarks the candidate made that suggest he is interested in reducing the regulatory compliance burden facing mortgage lending institutions. “I ... am convinced that the bureau will find many opportunities to streamline regulations and disclosures,” Cordray told members of the Senate Banking, Housing and Urban Affairs Committee last week. “Our ‘Know Before You Owe’ project is working to combine the mortgage disclosure forms required under two distinct but overlapping statutes to make the costs, risks and responsibilities of a home loan clearer to consumers and at the same time to reduce paperwork burdens for lenders – which is a true win-win.

FHA lending continued its downward trend as total originations fell 9.5 percent in July from the previous month and a whopping 41.2 percent on a year-to-year basis, according to Inside FHA Lending’s analysis of the latest data. The market saw production drop to $14.8 billion in July from $16.3 billion on a monthly basis and from $25.1 billion the same period last year. Fixed-rate mortgages comprised the bulk of originations at 93.7 percent, while purchase mortgages accounted for 78.5 percent of loans endorsed for FHA insurance for the month of July. In addition, 79.3 percent of FHA-insured loans were originated ... {includes one data chart]

The reverse mortgage arena experienced another shake-up as SunTrust Bank, citing poor volume, quite the business even as J.G. Wentworth, the largest purchaser of future payment products, announced its entry into the market. Atlanta-based SunTrust stopped accepting new reverse mortgage applications as of Sept. 1, although it is continuing to process applications already in the pipeline. A statement from the bank indicated that low production volume was the reason for management’s decision to leave the reverse mortgage business and to focus resources instead on mortgage origination and servicing. The market also lost ...