Compare ratios have been criticized by some factions of the mortgage industry. Some lenders have complained that the ratio is one reason why originators do not target underserved markets.
In his comments to reporters, FHFA Director Mel Watt did not rule out Fannie and Freddie engaging in principal reductions to help troubled consumers who have GSE loans.
Among the changes, the two GSEs will no longer require that a lender automatically repurchase a residential loan when a mortgage insurance company rescinds coverage.
FSOC Suggests State Regulators Work With CFPB on Nonbank Servicer Issues. The Financial Stability Oversight Council – of which the CFPB is a member – recommended last week that state regulators collaborate on prudential and corporate governance standards to strengthen nonbank servicers. The FSOC said state regulators should work on the standards with the CFPB and the Federal Housing Finance Agency when appropriate. The CFPB and state regulators have some authority over these companies, FSOC noted, but many of them are not currently subject to prudential standards such as capital, liquidity or risk management oversight. Additionally, in a number of cases, mortgage investors’ ability to collect on mortgages is dependent on a single mortgage servicing company, where failure could have significant negative...
A new study from the Government Accountability Office has confirmed that the CFPB can monitor banks for their mortgage servicing compliance with the terms of settlements that were reached before the bureau received its full authorities with the appointment of a confirmed director. The degree to which the CFPB has actively done so, however, appears to be limited. The GAO study at issue concerned the consent orders the Office of the Comptroller of the Currency and the Federal Reserve reached with 16 mortgage servicers back in 2011 and 2012. Those agreements required the servicers to hire consultants to review foreclosure files for errors and to remediate harm to borrowers. The CFPB was established on July 21, 2011, and the first...
The U.S. Supreme Court has agreed to resolve a split among the circuit courts over a provision in the Truth in Lending Act that allows a borrower to void a mortgage loan. In reviewing the case, Jesinoski v. Countrywide Home Loans, the SCOTUS will consider whether a borrower may file a lawsuit for rescission after TILA’s three-year repose period if the borrower sent a notice to the lender within that period. The U.S. Court of Appeals for the Eighth Circuit in September upheld a lower court ruling that a borrower seeking to rescind a mortgage loan under TILA must file suit within three years of consummating the loan. Contrary to the plaintiffs’ assertion, the lower court ruled that a borrower’s...
Now that the mortgage lending industry has a few months of experience dealing with the qualified mortgage standard under the CFPB’s ability-to-repay rule, some lenders are getting more confident about lending outside the parameters of the QM. Last week, during a webinar sponsored by Inside Mortgage Finance, an affiliated newsletter, industry experts highlighted some key considerations as to how to do so while minimizing the legal risk and otherwise overcoming certain compliance challenges. “A couple of points that I would make is that you want to document every step along the way – because what you’re really managing to is not necessarily the CFPB, not even necessarily a judge. You’re probably managing to the lawyer who is looking to take the...
Officials at Walter Investment Management revealed that the nonbank servicer is in talks with the CFPB and the Federal Trade Commission to settle a potential enforcement action by the federal regulators likely involving Green Tree Servicing LLC, its wholly owned subsidiary. The disclosure was made in the company’s Form 10-Q filing with the Securities and Exchange Commission late last week. Here’s the background: In response to a civil investigative demand from the FTC issued in November 2010 and a CID from the CFPB in September 2012, Green Tree Servicing produced “documents and other information concerning a wide range of its loan servicing operations,” Walter said. On Oct. 7, 2013, the CFPB notified Green Tree Servicing that bureau staff was considering...
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