After months of hearing mortgage banking and real estate executives gripe about problems tied to the TRID integrated disclosure rule, the CFPB last week signaled its intention to clarify the controversial measure, which became effective in early October. According to a letter from CFPB Director Richard Cordray to industry trade groups, the agency will issue new rulemaking tied to the TRID disclosure regime that will provide greater certainty and clarity. Cordray – who has been lambasted by the industry about the integrated disclosure rule for months – noted in the letter: “We recognize that the implementation of the Know Before You Owe rule poses many operational challenges. We also recognize that implementation is particularly challenging because of the diversity of the participants ...
Both the mortgage industry and the CFPB itself may have been caught a bit flat-footed when it came to fully grasping the significance and complexity of the bureau’s TRID integrated disclosure rule, according to one of the individuals intimately associated with drafting the controversial regulation. “TRID is a huge rule, about 1,900 pages of extremely detailed twists and turns. It affects every single aspect of the origination and closing process, as well as liability for lenders and the secondary market,” former bureau official Richard Horn, now an attorney in private practice, told Inside the CFPB. “I think many in the industry had to play catch up these past seven months, trying to grasp the far reaches and complexity of this ...
The secondary market for mortgages with TRID errors has yet to lose any steam, even though it was anticipated that the action would fade by now. That’s the assessment of Jeff Bode, CEO of Mid America Mortgage, Addison, TX, one of the largest investors in loans with TRID problems. “It’s still pretty solid,” Bode told IMFnews, an affiliated publication. “But I don’t see how much longer it can last.” Bode noted that some of the mortgages he’s reviewing have errors that are so minor he’s surprised that secondary market investors are balking at them in the first place. Mid America buys such mortgages and “makes the cures” itself, the CEO noted. A secondary market for mortgages with TRID errors – jumbos ...
In the continuing wake of industry concerns about the TRID disclosure rule and worries about large retroactive fines, the Community Home Lenders Association says the CFPB should provide more balanced regulatory and enforcement policies toward smaller nonbank mortgage lenders and improve compliance guidance and due process. Asserting that nonbank mortgage lenders, including community-based lenders, have recently “led the way” in providing access to mortgage credit and providing more personalized loan servicing, the CHLA said “any regulatory policies that have the effect of imposing a disproportionate compliance burden on smaller lender/servicers can accelerate industry consolidation – which in turn can result in fewer consumer choices and less personalized service.” The trade group had three main recommendations for the bureau, the first of ...
A handful of recent surveys of borrowers taking out a mortgage to purchase a home in the new era of the CFPB’s integrated disclosure suggest that borrowers are generally benefiting from the new forms and having a more positive experience with the entire process. Attorney Richard Horn, a former bureau official who was intimately involved in developing the new rule, is pleased to see confirmation that borrowers are getting the kind of benefit from the rule that he and his colleagues at the agency hoped they would. “From my experience, from having led the consumer testing for the disclosures and even the final rule, I do think it’s possible that these surveys are accurate and that consumers are experiencing the ...
It should come as no surprise to mortgage originators and servicers that the CFPB has significantly ramped up its examination activity of their operations over the last year. Data provided exclusively to Inside the CFPB from the bureau per a Freedom of Information Act request reveal there was a 70 percent increase in mortgage-related exams in 2015 from the prior year. As the accompanying chart illustrates, nonbanks have been having an even more active degree of scrutiny from the bureau than have depository institutions. Nonbank originators have seen an 85.7 percent increase in exam activity year over year, versus depositories, which have seen a rise of “only” 42.9 percent during that period. And it is even worse for nonbank servicers. ...
The CFPB should consider increasing the asset threshold limit to be considered a “small creditor” under its ability-to-repay/qualified mortgage rule, from $2 billion to $10 billion, so that more small lenders may take advantage of the regulatory relief a recent interim final rule provides, according to the American Bankers Association. The interim final rule, which was issued March 25, 2016, expanded the availability of certain special provisions for small lenders operating in rural or underserved areas. The proposal amends some of the definitions in the ATR rule, as per the Helping Expand Lending Practices in Rural Communities Act of 2015, which was enacted Dec. 4, 2015. Under the interim rule, small creditors – or banks that made no more than 2,000 ...
Mortgage Warehouse Volume at Horizon Bancorp Declines in First Quarter, TRID Remains an Issue. Horizon Bancorp announced recently that its mortgage warehouse lending efforts were down in the first quarter of 2016. The bank had $119.88 million in mortgage warehouse loans on its balance sheet at the end of the first quarter of 2016, down 17.2 percent from the previous quarter and down 33.0 percent from the first quarter of 2015.... Flagstar Boosts Originations and Income in 1Q16, Is Comfortable with TRID. Flagstar Bancorp reported an increase in originations and net income for the first quarter of 2016 with company executives noting that the bank is comfortable with the TRID mortgage disclosure requirements...
Fannie, Freddie and Ginnie continue to dominate in multifamily mortgage securitization, capturing a combined 93.6 percent of the market in the first quarter.
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