The Consumer Financial Protection Bureau, a potential nemesis regarded warily by the mortgage finance industry, officially opened for business this week without a Senate-confirmed director, but not without new brouhaha over the position. President Obama nominated Richard Cordray, the CFPB’s chief of enforcement, to be the first official director of the new agency. Prior to joining the bureau in January, Cordray was the Ohio attorney general for two years. Before that, he served for two years as Ohio’s state treasurer. It came as no surprise that Obama did not ...

Republican senators this week renewed their vow to block confirmation of a permanent director of the new Consumer Financial Protection Bureau unless the Obama administration agrees to revamp key parts of the agency’s structure and make it more accountable. Some, like Adam Levitin, a law professor at the Georgetown University Law Center, believe the CFPB is actually more accountable than any other federal agency. During testimony at a hearing in the Senate Banking, Housing and Urban Affairs Committee this week, he noted that the CFPB is subject to ...

Most mortgage loans made in recent years meet several of the major requirements to be classified as “qualified mortgages,” but debt-to-income tests could be problematic, according to a new Government Accountability Office report released this week. Loans that meet nine provisions specified in the Dodd-Frank Act would be classified as qualified mortgages and provide the lender some legal protection that the new law’s ability-to-repay standard has been met. The Federal Reserve has proposed a regulation to implement the DFA requirements but left some key issues – such as ... [includes one data chart]

Mortgage lenders operating as a “series limited liability company” should reevaluate the structure in the wake of an enforcement action by the Department of Housing and Urban Development against an FHA lender alleging violation of FHA branch rules and the Real Estate Settlement Procedures Act. A recent settlement agreement between HUD and Prospect Mortgage of Sherman Oaks, CA, could be the wake-up call for other mortgage companies that use a series limited liability company, or a “series LLC,” to originate FHA-insured loans, according to compliance experts. Lenders may have to decide whether to ...

The Office of the Comptroller of the Currency made significant changes to a controversial proposed regulation it issued back in May to implement revised federal preemption standards regarding state mortgage and other consumer protection laws. The OCC’s proposed rule to conform to Dodd-Frank Act preemption provisions was met with significant opposition from state regulators, consumer advocates, members of Congress and even the Department of Treasury, within which the agency functions as an independent bureau. One of the key disputes focused on the OCC’s proposal to use a ...

Without clear, early implementation guidance from the Department of Housing and Urban Development, FHA mortgage lenders could start underwriting to the lower loan limits before the Oct. 1 effective date, limiting the origination of FHA loans, warned two real estate industry groups. Providing guidance to mortgage lenders on how to manage the transition from the current top-end amount of $729,750 to $625,500 for high-cost areas without disrupting FHA lending is critical, the Mortgage Bankers Association and the National Association of Home Builders wrote to HUD. Lenders manage their pipelines based on ...

To bolster some much-needed credibility and quality assurance for consumers seeking appraisals, the Federal Housing Finance Agency and the Consumer Financial Protection Bureau should set minimum standards for states to apply in registering appraisal management companies, a recent Government Accountability Office report said. “Partly in reaction to appraiser independence requirements, lenders have increasingly relied upon AMCs to perform certain functions,” the GAO observed. “Despite the increased use of AMCs, direct federal oversight of AMCs is limited because ...

JPMorgan Chase officials say they plan to liquidate the company’s giant $154 billion mortgage portfolio to “close to zero” as it works through the bank’s mortgage losses and litigation of loan-servicing and foreclosure practices. During the company’s earnings conference call with analysts, JPMorgan CEO Jamie Dimon noted that the company will continue to reduce its mortgage holdings by 10 percent to 15 percent a year “forever.” Last year, the company reduced its mortgage holdings by $19.3 billion. JPMorgan reported earnings of ...

Consumer Financial Protection Bureau Associate Director Raj Date told lawmakers earlier this month that mortgage servicing will be one of the CFPB’s priorities as soon as it’s open for business. In particular, Date told lawmakers at a joint hearing of the House Financial Services Subcommittee on Oversight and Investigations and the Subcommittee on Financial Institutions and Consumer Credit that the agency will begin addressing two structural problems in the mortgage servicing market, one of which is that the vast majority of borrowers do not get to choose their mortgage servicer...