Most of the mortgage industry cannot reliably confirm whether it will be ready to fully comply with the CFPB’s pending integrated disclosure rule, according to a new member survey by the American Bankers Association. Based on approximately 800 responses from bankers nationwide, “Our survey reveals that an overwhelming 74 percent of banks are using a vendor or consultants to assist with TRID implementation,” Bob Davis, head of mortgage markets at the ABA, said in a letter to CFPB Director Richard Cordray. Community banks in particular are highly dependent on the ability of vendors to deliver technology-related services that are critical to bank compliance efforts, according to Davis. “Interestingly, though, bankers from large institutions were over-represented in the survey, which implies ...

Contrary to other segments of the mortgage industry, a huge majority of title professionals will be ready to play ball when the CFPB’s TILA/RESPA integrated disclosure rule goes live Aug. 1, 2015, according to a survey conducted by the American Land Title Association. “Ninety-two percent of our survey respondents indicated their company will be prepared to implement the new forms and comply with the CFPB’s regulation,” said Michelle Korsmo, ALTA’s chief executive officer. “The land title insurance industry has been a leader in preparing the real estate industry for the new disclosures and that is reflected in the preparedness of our members.” However, perhaps not so surprisingly, collaboration with lenders and real estate agents, and potential closing delays top the ...

Sen. Richard Shelby, R-AL, chairman of the Senate Banking, Housing and Urban Affairs Committee, released the text of his pending regulatory relief bill last week. Among a handful of CFPB-related provisions is one that would grant qualified mortgage status under the bureau’s ability-to-repay rule for residential loans held in portfolio. However, as per the draft Financial Regulatory Improvement Act of 2015, certain conditions would have to apply. To begin with, the lender/creditor would have to hold the loan in portfolio from its inception, or any acquirer of the loan must continue to hold it in portfolio. Additionally, the mortgage cannot have been acquired through securitization, nor can it have certain forbidden features, like negative amortization, interest-only provisions, or a loan ...

The CFPB sued Ohio-based Nationwide Biweekly Administration, Loan Payment Administration, and their owner, Daniel Lipsky, in federal district court last week, accusing them of misrepresenting the interest savings consumers will achieve through a biweekly mortgage payment program called the “Interest Minimizer” and misleading consumers about the cost of the program. Under the program, consumers who enroll send Nationwide half their monthly mortgage payment every two weeks, effectively making one additional monthly payment per year. According to the bureau, Nationwide charges consumers a setup fee of up to $995 to enroll in the program and charges consumers between $84 and $101 in payment processing fees each year they remain enrolled. According to the bureau’s complaint, the defendants made misrepresentations about the ...

CFPB Updates Mortgage Origination Examination Procedures to Reflect TRID. The CFPB has put out an updated version of its Supervision and Examination Manual’s Mortgage Origination examination procedures. The latest iteration features guidance on how its compliance examiners will examine loan disclosures and the terms of closed-end residential mortgages that are subject to the pending integrated disclosure rule under the Truth in Lending Act and the Real Estate Settlement Procedures Act. Of the manual’s eight modules, the updated TRID examination procedures are reflected in module #4. “Examiners should obtain and review a sample of complete loan files to assess the entity’s compliance,” states the new section of the manual. “If consumer complaints regarding mortgage origination and closing indicate potential violations of ...

CFPB May Review Lender-Paid MI. Pricing on lender-paid mortgage insurance policies has come down over the past several months, apparently spurring the CFPB to take a look at what’s going on behind the curtain. Citing industry officials who claim to have knowledge of the situation, Inside Mortgage Finance, an affiliated publication, reported late last week that the powerful consumer regulator may focus on whether there is some kind of quid pro quo going on between lenders and mortgage insurers. In particular, the CFPB is interested in the discounting of LPMI in exchange for a lender sending more of its MI business to an insurer and whether such a practice violates the Real Estate Settlement Procedures Act, the newsletter reported. In ...

House GOP’s Proposed Budget Rejects IT Administrative Fee, HTF. House Republicans withheld funding for a proposed administrative fee, which the FHA planned to invest in technology to improve quality assurance and reduce paid-claims losses. The Department of Housing and Urban Development first requested authority to collect the fee in the President’s FY 2015 budget request but was turned down. It appears House Republicans are on track again to reject the proposed fee in the FY 2016 appropriations bill, said HUD Secretary Juan Castro. Castro lambasted the House Republicans’ proposed budget cuts, saying they would hinder HUD from carrying out its mission and from investing in communities that most need help. The GOP bill also rescinds funding to the proposed Housing Trust Fund, which allocates a small percentage of Fannie Mae and Freddie Mac profits to ...

The Federal Housing Finance Agency surprised no one when it announced a fifth, and final, extension of the Home Affordable Refinance Program for underwater Fannie Mae and Freddie Mac loans. But industry experts are intrigued by the prospect of a new streamlined refi program for the two government-sponsored enterprises. Analysts from Barclays said an extension was widely expected by the market and, as a result, “may not have much of an effect on seasoned cohort valuations.” FHFA Director Mel Watt announced...

The CFPB this week launched a public inquiry into student loan servicing practices that create repayment challenges, hurdles for distressed borrowers and economic incentives that may affect the quality of service. “As a growing share of student loan borrowers reach out to their servicers for help, the problems they encounter bear an uncanny resemblance to the situation where struggling homeowners reached out to their mortgage servicers before, during and after the financial crisis,” CFPB Director Richard Cordray said during a field hearing in Milwaukee on Thursday. “Having seen the improper and unnecessary foreclosures experienced by many homeowners, the CFPB is concerned that inadequate servicing is also contributing to America’s growing student loan default problem.” Currently, about 8 million Americans are...

Republicans in the House of Representatives continued their efforts to chip away at the Dodd-Frank Act during a hearing this week by rolling out critics who said the act not only was a poor and ineffective response to the 2008 financial crisis, but also created a host of new problems and could be contributing to the next debacle. Rep. Sean Duffy, R-WI, chairman of the House Financial Services Oversight and Investigations Subcommittee, said a major assumption underlying Dodd-Frank – that the primary cause of the financial crisis was misbehavior by securities market participants – was false. “Main Street lenders are being...