According to survey figures from Inside Mortgage Finance, wholesale/broker production accounted for 9.6 percent of fundings in the fourth quarter of 2015...
Many small and medium-sized nonbanks have been earning steady profits the past three years, but some firms lost money in the fourth quarter of 2015, thanks to the CFPB’s integrated disclosure rule known as TRID. At least that’s what some warehouse managers told IMFnews, an affiliated publication. These credit executives, who spoke on the condition their names not be used, were somewhat surprised by the development, noting that about a third of their clients posted losses. The managers also noted that executives at companies experiencing the losses almost unanimously blamed it on the TRID rule, citing compliance costs and problems selling mortgages in the secondary market, particularly jumbo and nonconforming products. At this time, there seems to be no major ...
Roughly 25 percent of lenders responding to an American Bankers Association survey have eliminated some mortgage products because the TRID integrated disclosure rule does not provide enough clarity. The offerings that were killed include construction loans, adjustable-rate mortgages, home equity loans and payment-frequency options. Further, more than 75 percent of survey respondents said that TRID is delaying loan closings by, on average, eight days, the trade group said. However, some transactions have experienced as many as 20 extra days. Additionally, a whopping 93 percent claim uploading and loan processing times have increased as a result of TRID implementation. Approximately one quarter of respondents said the new rule has increased the total cost to the consumer to obtain a loan, the ...
The CFPB’s ability-to-repay rule with its qualified mortgage standard has not dampened mortgage credit availability – market dynamics did that before the rule kicked in, according to a new analysis from the Urban Institute’s Housing Finance Policy Center. “The second anniversary of the QM rule is an appropriate occasion to evaluate the rule’s impact on credit availability,” Research Associate Bing Bai, Director Laurie Goodman and Senior Fellow Ellen Seidman wrote in a brief published late last month. The data they reviewed suggest that the impact of QM has been small: mortgages with interest-only features and prepayment penalties were virtually extinct before QM took effect; the adjustable-rate mortgage share of the market still tracks interest rate changes; and the share of loans ...
In response to federal legislation that was enacted late last year, the CFPB last week announced an application process for requests that areas not deemed “rural” receive that designation under federal consumer law. “Under this process, those now outside rural counties or census blocks can apply to be designated as rural and may be eligible for specific exemptions and provisions for certain mortgage lenders,” the agency said. The CFPB will accept applications starting March 31. The application process will be open through Dec. 4, 2017. “However, any application submitted after April 8, 2017, will be considered only if the bureau determines the designation decision process for that application can be completed by the sunset date of Dec. 4, 2017, based ...
Before the CFPB’s new Home Mortgage Disclosure Act rules kick in, now would be a great time for the mortgage industry to take steps to improve the HMDA process, according to Kathleen Blanchard, president of Key Compliance Services. “As another HMDA season draws to a close, take some time to consider the HMDA process and how to make it better,” she advised in a recent online blog. “The HMDA Loan Application Register is an important document that is very labor intensive, with monetary penalties attached for inaccuracies. Take a project management approach and create a strong process to get it right.” Blanchard said she sees financial institutions scrubbing LARs at year end, making changes to applications and loans that should ...
The Mortgage Bankers Association last week indicated it plans to press the CFPB for relief on a handful of fronts this year, most notably, the integrated disclosure rule known as TRID, the pending new reporting regime under the Home Mortgage Disclosure Act, and the broader “regulation by enforcement” approach the bureau seems to have taken. “Since the TRID rule’s implementation, a significant number of issues have emerged – mostly due to lingering misperceptions, differing interpretations, and technical ambiguities in the regulation,” the trade group said during a recent press briefing about its priorities for 2016. “It also has become clear that, while the vast majority of lenders were educated about the rule, many other important actors in the real estate transaction ...
The CFPB’s recently finalized “no action” policy towards market innovators that come up with new financial services products will probably depress the development of new mortgage loan products, numerous industry legal experts say. Under the policy, bureau staff would issue no-action letters (NALs) to specific applicants, stipulating that the CFPB staff “has no present intention to recommend initiation of an enforcement or supervisory action against the requester with respect to a specified matter.” Also, such a letter could be modified or revoked at any time at the discretion of bureau staff. Further, issued NALs would be publicly disclosed as a general practice, and they would not be binding on the bureau, other regulators or parties in litigation. Former CFPB official ...
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