In a noteworthy concession to the mortgage lending industry, the CFPB last week finalized a “right to cure” loans in which a lender inadvertently breaches the 3 percent cap on points and fees for a loan that would otherwise be deemed a qualified mortgage under the agency’s ability-to-repay rule. Under amendments finalized this past Wednesday, if a lender discovers after the loan has closed that it has exceeded the 3 percent cap, there are limited circumstances in which it can pay a refund of the excess amount with interest to the consumer and the loan will still be considered a QM. First, the refund must occur within 210 days after the loan is made. The lender must also maintain and ...

The $13 million settlement reached between the CFPB and Castle & Cooke Mortgage Co. back in November 2013 was not the end of the dispute for the mortgage lender. It now faces a possible class-action lawsuit brought by one of the aggrieved parties who had already been compensated under the terms of the settlement with the bureau. Homeowner Luis Cabrales, on behalf of himself and perhaps in excess of 9,500 similarly situated individuals, recently filed his complaint in the U.S. District Court for the Eastern District of California, Fresno Division. The class, so far, has not been certified. The legal argument is that the applicable statutes of limitation of the claims alleged in the new complaint were “tolled” (suspended or ...

In the Castle & Cook case more than 9,400 consumers received checks from the settlement with the CFPB. But one homeowner decided not to stop there...

It’s Official: QRM = QM. Last week, the Office of the Comptroller of the Currency, the Federal Reserve Board, the Federal Deposit Insurance Corp., the Securities and Exchange Commission, the Federal Housing Finance Agency, and the Department of Housing and Urban Development adopted a final version of their risk-retention rule for securitized mortgages. Under the new rule, the definition of a “qualified residential mortgage” (QRM) will be no broader than the definition of the “qualified mortgage” (QM) as promulgated by the CFPB in its ability-to-repay rule. Mortgage lending industry representatives were generally pleased with the move. Independent analysts said they expected the near-term impact of the QRM to be quite limited. However, others noted that the development does place a ...

The Consumer Financial Protection Bureau this week finalized a rule change that allows lenders to fix inadvertent mistakes that send mortgages over the 3 percent cap on points and fees for qualified mortgages.Under the “right-to-cure” amendment, a lender can, under limited circumstances, re-fund the excess amount of interest to keep the loan a QM.

Note to Ocwen management: every US employee is a potential mortgage customer. Think about it.

It could take years for the non-agency mortgage-backed securities market to even approach the depth and liquidity it had before the housing meltdown, according to experts participating on a panel during the annual convention of the Mortgage Bankers Association this week in Las Vegas. The main reason non-agency MBS issuance does not amount to much is the huge bank demand for jumbo mortgages, said Tom Millon, president and CEO of Capital Markets Cooperative. Only about 77 percent of ...

Boosters of the non-agency market are trying to solve too many problems at once, according to Matthew Nichols, a managing partner at Deephaven Mortgage. He said work by various groups to set standards and address the problems confronting the non-agency market is an effort to create a world where non-agency MBS never take a first loss. “We are taking a simpler approach, accumulating nonprime, non-QM mortgages and securitizing them,” Nichols said this week at ...

Lenders have a number of underwriting options under the ability-to-repay rule when originating mortgages for self-employed borrowers, according to officials at the Federal Deposit Insurance Corp. Self-employed borrowers account for a sizeable portion of the potential customer base for jumbo mortgages. The FDIC hosted a conference call this week to address concerns banks have raised regarding the Consumer Financial Protection Bureau’s ATR rule, and one of the most ...

California continued to dominate jumbo originations in 2013, according to an Inside Nonconforming Markets analysis of data from the Home Mortgage Disclosure Act. The $96.74 billion in jumbos originated in California in 2013 accounted for 36.9 percent of total jumbo production during the year. The analysis defines jumbos as loans that exceed a county’s government-sponsored enterprise loan limit for 1-unit mortgages. If the county isn’t available, data cover ... [Includes one data chart]