Two nonbank mortgage lenders ran afoul of the CFPB in its enforcement of the loan originator compensation rule, and other lenders would do well to learn from their experiences. During a recent webinar sponsored by Inside Mortgage Finance, an affiliated newsletter, former CFPB official Benjamin Olson, now a partner at the law firm of BuckleySandler, talked about two related enforcement actions the bureau brought against California-based nonbank mortgage lenders, Franklin Loan Corp. in November 2014 and RPM Mortgage, Inc., in June of this year. Both cases zeroed in on the lenders’ use of expense accounts to pay originators’ bonuses and commissions. The practice cost Franklin $730,000 and RPM $19 million. Olson noted the CFPB allegations were based on expense accounts ...
As the pending Oct. 3, 2015, effective date for the CFPB’s integrated disclosure rule approaches, both the bureau and industry groups issued last-minute guides and other materials to help various sectors comply as effectively as possible. The rule is intended to harmonize and integrate the disclosures required under the Truth in Lending Act and the Real Estate Settlement Procedures Act; hence the term “TRID,” an acronym for the more formal TILA/RESPA Integrated Disclosure rule. Last week, on the lender front, the bureau released three supervisory publications that have been updated to reflect the new TRID effective date. They include the interagency TILA and RESPA examination procedures, developed in coordination with the members of the Federal Financial Institutions Examination Council Consumer ...
Loan officers, it seems, are more willing to work on agency-eligible mortgages because they know the transactions have a good chance of closing, but non-QMs are a different matter.
Concerned with worsening late-claim filing, the FHA proposed to establish a timeframe for filing insurance claims and to penalize lenders with complete termination of insurance...
FHA lenders funded $7.8 billion in new Home Equity Conversion Mortgage loans during the first half of 2015, up 8.2 percent from the same period a year ago. HECM loan production was slower in the second quarter with originations down 1.1 percent from the prior quarter. Purchase loans accounted for 86.1 percent of all HECM transactions during the first six months. Interestingly, borrower bias against adjustable-rate loans appeared to have eased. Fixed-rate HECMs accounted for only 15.4 percent of originations during the first half of the year. Initial principal amount at loan origination totaled $4.6 billion over the same period. On a fiscal year-to-date basis, the FHA reported a total of 53,372 HECM endorsements, up from 47,662 HECM endorsements in fiscal YTD 2014. Meanwhile, HECM endorsed cases increased to 5,750 in August compared to ... [ chart ]
Ginnie Mae securitized fewer rural home loans guaranteed by the U.S. Department of Agriculture in the second quarter of 2015 compared to the previous quarter, according to analysis of agency data. A total of $8.4 billion of USDA loans were securitized during the first six months of 2015, down 2.1 percent from the same period last year. Securitization volume also dropped by as much quarter over quarter. Chase led all USDA securitizers with $2.6 billion in loans securitized during the first half of the year for a commanding 30.4 share of the market. Wells Fargo funneled $1.1 billion in USDA loans into Ginnie MBS, resulting in a 13.1 market share, while PennyMac delivered $609.7 million for securitization. U.S. Bank closed the first half with $260.3 million in securitized USDA mortgages despite a 31.4 percent drop in the second quarter. Pacific Union Financial rounded out the top five USDA loan securitizers with ... [ chart ]
FHA jumbo securitization continued to rise over the first six months of 2015 on the back of soaring FHA jumbo production in the second quarter. FHA jumbo originations in the second quarter more than doubled to $6.8 billion, according to the Inside Mortgage Finance database. FHA data showed that the jumbo share of originations was highest in conventional-to-FHA refinance (14.9 percent) and streamlined FHA refis (13.3 percent,) but just 9.0 percent for purchase loans. Delivery of FHA jumbos, including modified loans, into Ginnie Mae jumbo mortgage-backed securities rose 131.9 percent in the second quarter from the prior quarter and was up 115.8 percent compared to the first six months of 2014. Wells Fargo led the market in the first half with $1.4 billion in jumbos contributed to MBS, up 123 percent quarter over quarter. That was good enough for a 12.7 percent market share. PennyMac Corp. accounted for ... [ chart ]
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