Flagstar in Talks with CFPB Over Alleged Loss Mitigation Violations. Flagstar Bancorp, the parent of the nation’s 17th largest residential servicer, disclosed in a new regulatory filing that it is in talks with the CFPB over alleged violations of federal law arising from the bank’s loss mitigation practices and default servicing operations dating back to 2011. Flagstar Bank FSB, which owns roughly $69 billion in mortgage servicing rights, said it has already provided the CFPB with documents and “other information” regarding the matter in response to a civil investigative demand. “While the bank intends to vigorously defend against any enforcement action that may be brought, it has commenced discussions with the CFPB staff to determine if a settlement can be ...

Bipartisan Legislation Would Increase Threshold for CFPB Supervision. Right before Congress took off for its summer recess, Republican Sen. Pat Toomey of Pennsylvania and Democrat Sen. Joe Donnelly of Indiana introduced S. 2732, the Consumer Financial Protection Bureau Examination and Reporting Threshold Act of 2014. The act would increase the current $10 billion asset threshold figure at which regulated depository institutions are subject to direct examination and reporting requirements of the CFPB to $50 billion. “The higher threshold would be substantially the same as the threshold for a bank to be designated ‘systemically important’ (i.e., assets of $50 billion or more),” said attorney Barbara Mishkin, of counsel with the Ballard Spahr law firm, in a recent client note. CBO Pegs ...

The American Bankers Association believes GSE loan limits in much of the nation could be reduced.

In 2013, Freddie Mac reimbursed its servicers $1.4 billion but identified and denied $126 million in what the IG calls “erroneous” claims.

The New York AG has secured a temporary restraining order barring the loan mod companies from collecting advance fees. The state's top cop also froze their bank accounts.

Originations of jumbo mortgages increased significantly in the second quarter of 2014 compared with the previous quarter, according to a new ranking and analysis by affiliated publication Inside Mortgage Finance. An estimated $59.0 billion in non-agency jumbos were originated in the second quarter, up 34.1 percent from the previous quarter and reversing two consecutive quarters of declining originations for the jumbo sector. Halfway through the year, jumbo production ... [Includes one data chart]

A number of real estate investment trusts are increasing their presence in the jumbo mortgage-backed security market with conduit programs as well as purchases of subordinate tranches from new MBS. Two Harbors Investment said its jumbo conduit had a pipeline with an unpaid principal balance of $650 million at the end of the second quarter of 2014, more than four times the REIT’s pipeline at March 31. Two Harbors recently issued a $267.67 million jumbo MBS, the first from the REIT this year ...

Lowering the government-sponsored enterprises’ loan limits is one of the main goals for firms involved in the non-agency market but the effort lacks broad support in the mortgage industry, let alone in Congress. Among those submitting comments to the Treasury Department this month regarding how to increase non-agency activity, the American Bankers Association was one of the biggest supporters of decreased loan limits for the GSEs. The conforming loan limit is at $417,000 and ...

The Consumer Financial Protection Bureau has released an updated bulletin regarding servicing transfers due to continued concerns about how troubled borrowers fare when servicing moves from one firm to another. “In particular, CFPB examiners will carefully scrutinize transfers of loans with pending loss mitigation applications or approved trial and permanent modification plans,” the regulator said. “Examples of good practices by servicers include flagging those loans and ...

Bank of America last week agreed to a record settlement with the Department of Justice and others, largely involving non-agency mortgage-backed securities issued from 2003 through 2008. Officials at the DOJ said the settlement focused on disclosures provided by BofA and its affiliates, including Countrywide Financial, First Franklin and Merrill Lynch, to investors in the bonds. “It’s kind of like going to your neighborhood grocery store to buy milk advertised as fresh, only to discover that ...