The Consumer Financial Protection Bureau this week detailed servicing rules it will soon propose regarding disclosures to borrowers and servicing procedures. “The mortgage servicing rules we are considering reflect two basic, common sense standards – no surprises and no runarounds,” CFPB Director Richard Cordray said. “They would apply to all mortgage servicers regardless of how they are organized, including banks, thrifts, credit unions and nonbank servicers.” The rule, which will amend the Truth in Lending Act and Real Estate Settlement Procedures Act, is required by the Dodd-Frank Act. The CFPB said it will publish a proposal ...

Ocwen Financial last week completed its acquisition of mortgage servicing rights from Morgan Stanley’s Saxon Mortgage Services. Ocwen won some concessions from the seller since the sale was announced in October, though the servicer also faces criticism regarding its expanding portfolio. Ocwen acquired MSRs with an unpaid principal balance of $22.2 billion, largely comprised of non-agency mortgages. Ocwen had been subservicing $9.9 billion of the MSRs. Ocwen also acquired $2.7 billion in subservicing agreements from Saxon. The base purchase price for the Saxon transaction was ...

The Department of Housing and Urban Development has hired a new contractor to service Home Equity Conversion Mortgages and other secretary-held mortgage assets. Irving, TX-based Deval, LLC, officially took over from C&L Service Corp. as HUD’s new loan servicing contractor effective March 1. Servicers may assign loans through Deval once they reach 98 percent of the maximum claim amount. As part of its servicer duties, Deval will handle borrower inquiries, payoff requests for Hope for Homeowners mortgages, HECM servicer inquiries and certain HECM-related requests. In addition to assigned HECM loans, Deval will be ...

The mortgage banking industry got some advance notice this week on the direction the Consumer Financial Protection Bureau plans on taking when it issues a mortgage servicing proposed rule later this summer. The CFPB said it wants to design mortgage servicing rules to keep mortgage borrowers from getting stuck with costly surprises because of a lack of transparency or getting the runaround from their mortgage servicer because of a lack of accountability. “In recent years, many borrowers have complained that they did not receive the information they needed to help avoid foreclosure,” CFPB Director Richard...

Federally regulated banking institutions may now hang the “for rent” sign on houses in their portfolio of residential “other real estate owned” properties as an alternative to selling difficult to move OREOs, according to new guidance released by the Federal Reserve. Last week, the Fed issued a policy statement reiterating that federal statutes and its own regulations permit the rental of residential properties acquired in foreclosure as part of an orderly disposition strategy. “The general policy of the Federal Reserve is that banking organizations should make good faith efforts to dispose of...

A federal district court judge in Washington DC this week signed off on the proposed $25 billion settlement agreement between the federal government, state attorneys general and the top five mortgage servicers, putting in place a potential template for national standards for the mortgage servicing industry. On April 6, Judge Rosemary Collyer of the U.S. District Court for the District of Columbia entered the proposed consent judgments against Bank of America, Citigroup, Wells Fargo, JPMorgan Chase and Ally Financial, including a settlement term sheet and additional exhibits specific...

As the broadening of the government’s Home Affordable Modification Program is in the midst of implementation, servicers need to focus on executing new guidelines. To that end, PricewaterhouseCoopers released analysis on the way the administration’s modification program will impact servicers. Of the many programs and regulations in the works, including full-year forbearance, a homeowners’ bill of rights, real estate-owned rental programs and the joint investigation into mortgage-backed securities issues, the expanding HAMP eligibility is the only one considered “high impact” and in progress, making it...

Banks maintain real estate-owned properties unequally, with properties in minority communities showing clear signs of vacancy while those in white communities receive necessary attention, according to a new investigation by the National Fair Housing Alliance. The investigation, outlined in the report “The Banks are Back – Our Neighborhoods are Not: Discrimination in the Maintenance and Marketing of REO Properties,” looked at 1,036 REO properties in nine different metro areas, comparing those in predominantly Latino and African-American neighborhoods to those in predominately white communities...

The Consumer Financial Protection Bureau has intervened in an ongoing case involving a foreclosure by American Home Mortgage Servicing, the only mortgage-related probe out of three “non-public” investigations of debt collection practices to determine whether they violate the Fair Debt Collection Practices Act or the Dodd-Frank Wall Street Reform and Consumer Protection Act. The CFPB filed an amicus brief in Paul and Angela Birster vs. American Home Mortgage Servicing Inc. (11th Circuit), the agency revealed in its first FDCPA annual report to Congress, which it ...

In Rosenfield v. HSBC Bank USA, the Consumer Financial Protection Bureau has submitted a friend-of-the-court brief arguing that some mortgage borrowers who did not receive important disclosures mandated by the Truth in Lending Act are permitted to cancel their loans as long as they notify the lender of their intent to cancel within three years. Filed before the U.S. Court of Appeals for the Tenth Circuit in Denver late last week, the CFPB argued that Section 125 of TILA (U.S.C. Section 1635) provides consumers a statutory right to rescind qualifying mortgage loans ...