In the first half of 2014, CFPB examiners conducted targeted reviews for compliance with the bureau’s new mortgage servicing rules and found mixed results, according to the agency’s latest supervisory highlight report. For example, the new rules require servicers to maintain policies and procedures to achieve specific objectives in areas such as loss mitigation, servicing transfers and service provider oversight. “In reviewing this area, examiners found that the policies and procedures at several servicers appeared to be reasonably designed to meet the specific objectives laid out in the rule,” said the new report. For instance, some servicers’ policies and procedures clearly outlined the ways in which they access and provide timely and accurate information. “These policies and procedures included specific ...
There are a host of legal land mines that mortgage lenders must avoid if they want to keep from becoming the target of a CFPB enforcement action under its unfair, deceptive or abusive acts or practices (UDAAP) authority, according to top legal experts. Andrea Mitchell, a partner with the BuckleySandler law firm, told attendees at an Inside Mortgage Finance webinar last week that there are a number of representations lenders should stay away from in their marketing pitches. “Say what you mean and mean what you say,” Mitchell said. She then rattled off a list of potentially problematic terms to avoid, such as “free” or “no cost,” “best rates available,” “fastest” or “faster than…,” “improve/repair your credit” or “eliminate your ...
Castle & Cooke Mortgage late last month filed a motion to dismiss a putative class-action brought by one of the aggrieved parties who had already been compensated under the terms of the settlement the lender reached late last year with the CFPB. In Luis Cabrales v. Castle & Cooke Mortgage LLC, plaintiff Luis Cabrales contends that the lender improperly compensated its loan officers by giving them bonuses for putting customers in more expensive loans than what they qualified for. The plaintiff sued for violation of the Truth in Lending Act – a claim that Castle & Cooke is not challenging at this point. However, Cabrales also brought other causes of action: violation of Section 8 of the Real Estate Settlement Practices ...
Rating agencies and Wall Street firms are paying close attention to the mounting regulatory problems at Ocwen Financial, fearful that more bad news could lead to servicing downgrades, which in turn could hamper its ability as a master servicer of MBS. One servicing advisor who has worked with Ocwen over the past two years noted that Fannie Mae and Freddie Mac pay close attention to the master servicing ratings of their counterparties. “You have to maintain minimum ratings and if you don’t – there’s going to be trouble,” he said. Downgrades, he added, can lead...
Bank of New York Mellon is looking to increase its master servicing activity on residential mortgages, according to officials at the firm that acquired the master servicing unit from JPMorgan Chase in October 2006. However, BNYM is up against stiff competition, including Wells Fargo, a dominant presence in master servicing for non-agency MBS. BNYM is focusing on growth opportunities from managing new funds in traditional residential mortgages as well as new loan types, according to a recent report by Fitch Ratings. In September, Fitch downgraded BNYM’s master servicer rating due to compliance issues, organizational changes and low activity in recent years. The firm has...
Servicers are increasingly executing their clean-up call options on vintage non-agency MBS, paying off investors at par and realizing profits by liquidating real estate owned properties. This year has been the most active year for clean-up calls on non-agency MBS since 2007, according to analysts at Bank of America Merrill Lynch. And that’s before the largest servicer of subprime MBS has taken any significant action on clean-up calls. In August, Ocwen Financial announced...
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