Marketing services agreements (MSAs) continue to be a flashpoint for conflict between title companies and the CFPB under the Real Estate Settlement Procedures Act. Late last month, the bureau ordered Lighthouse Title, a Michigan title insurance agency, to pay $200,000 for entering into what the CFPB characterized as illegal quid pro quo referral agreements, in violation of RESPA. According to the bureau, Lighthouse Title entered into MSAs with various companies, such as real estate brokers, with the understanding that the companies would refer mortgage closing and title insurance business to Lighthouse. “The agreements made it appear as if the payments would be based on marketing services the companies were supposed to provide to Lighthouse,” the CFPB said. “However, Lighthouse actually ...
Earlier this month, the Supreme Court of the United States agreed to accept Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc., the latest legal dispute over disparate impact to reach it corridors. However, a ruling by the SCOTUS could extend beyond the mortgage space. The TDHCA distributes the tax credits associated with the Low-Income Housing Tax Credit Program throughout Texas. The ICP is a 501(c)(3) non-profit that works to place low-income, mostly African-American Section 8 tenants in Dallas’s more affluent and largely white suburban neighborhoods. The ICP brought suit against TDHCA back in 2008, accusing the housing agency of disproportionately authorizing LIHTCs for affordable housing developments in largely minority ...
After a rough first quarter in which consumer complaints filed with the CFPB rose by 29.1 percent (mostly because of credit reports), the second and the third quarters have seen double-digit declines, 14.8 percent in 2Q14 and 14.6 percent in 3Q14, according to a new analysis by Inside the CFPB. Of the nine categories of gripes tracked, seven showed declines, all by double digits, with the money transfer sector leading the drop-off, down 28.4 percent from the second quarter. Debt collection criticisms slid 20.5 percent, followed by mortgages (17.6 percent), bank accounts (15.4 percent), student loans (14.5 percent), credit cards (12.1 percent) and credit reports (10.0 percent). The two rough spots were grievances about consumer loans, which were up 28.4 percent [with two exclusive data charts] ...
The National Association of Realtors recently urged the CFPB not to unnecessarily restrict consumer access to credit by effectively eliminating the so-called “mini correspondent” lending channel. In a letter to the CFPB, the NAR said it supports efforts to prevent evasion of the bureau’s ability-to-repay/qualified mortgage rules. However, it also supports access and choice in credit provider channels, including affiliated business arrangements and joint ventures properly established under the Real Estate Settlement Procedures Act. “These arrangements are most often entered into to provide greater service to consumers,” said the NAR. “Capital constraints of small but growing businesses often govern the type of arrangement that is entered into. Mini correspondents are one such arrangement.” The trade group ...
The CFPB issued a report earlier this month finding, more often than not, that owners of manufactured homes pay higher interest rates for their loans than borrowers whose homes were built onsite. “In 2012, about 68 percent of all manufactured-housing purchase loans were considered ‘higher-priced mortgage loans,’ compared with only 3 percent of site-built home loans,” the CFPB said. Two out of three manufactured-home owners eligible for mortgages finance with more expensive personal property (“chattel”) loans instead. That’s good and bad. On the one hand, chattel loans have lower origination costs and quick closing timelines, as the bureau noted. But on the other hand, they also have “significantly fewer consumer protections than mortgage loans,” the bureau said. For example, only ...
In another bid to help mortgage bankers better assess their compliance capabilities, the CFPB has updated its mortgage rules readiness guide to include the Truth in Lending Act and Real Estate Settlement Procedures Act integrated mortgage disclosures, otherwise known as “TRID.” Version 3.0 of the guide, dated September 2014, summarizes the mortgage rules finalized by the CFPB as of Aug. 1, 2014, but it is not a substitute for the rules. “Only the rules and their official interpretations can provide complete and definitive information regarding their requirements,” the bureau reminds. Each rule description includes a hyperlink with additional information, including Small Entity Compliance Guides, which may make the rule easier to digest. The guide consists of four parts: a summary of the rules ...
Bureau Updates Its Reverse Mortgages Guide With Words of Caution. The CFPB has updated its reverse mortgage guide to reflect some recent, potentially important changes to such loan products. The bureau is urging caution, noting such mortgages can be risky and expensive. “It’s a complicated type of loan that works best for homeowners who carefully consider all of their options,” the agency said. One of the highlighted changes limits the amount of money a homeowner can draw from the loan in the first year. “Borrowers often get into trouble by taking a lump-sum payment early on,” said the CFPB. “It may feel great to get a big payment up front, but borrowers can outlive this money – which spells financial trouble for borrowers who live longer lives.” ...
Analysts at Bank of America Merrill Lynch are predicting a solid fourth quarter for jumbo MBS, enough to bring the total for 2014 up to about $8.0 billion when the year is over.
Here's a fact that most readers may not know: the Housing and Economic Recovery Act of 2008 grants the FHFA the authority to bring Fannie Mae and Freddie Mac out of conservatorship.
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