Angela Klein, an attorney with the law firm Morrison & Foerster, said her firm has been talking to mortgage lenders that use big data about the risk and how little guidance there is about it.
FHA lenders are uneasy over whether issues raised by the Consumer Financial Protection Bureau’s new integrated disclosure rules could affect FHA lending. Although the issues cited by lenders are not FHA issues per se, these lenders are concerned that such uncertainties may cause problems for their FHA business, according to mortgage industry consultant Brian Chappelle, a principal at Potomac Partners. For example if a lender cures a mistake and the cure results in a reimbursement of, say, $100 to the borrower at closing, would that be considered a violation of the Department of Housing and Urban Development’s minimum 3.5 percent cash-investment requirement for FHA loans. “I don’t think it is a violation, but lenders are worried about how HUD might interpret it,” said Chappelle. “It is well after closing and it is obviously not a gift given to the borrower. It is ...
While mortgage lenders have been using traditional forms of data, like credit reports, to make their lending decisions, the Federal Trade Commission is concerned that “big data” will make it easier for banks to unfairly discriminate against certain segments of the population. Anytime big data is used to categorize consumers in ways that can result in certain populations being put at a disadvantage for things like a mortgage, it becomes a tool for exclusion, the FTC warned ...
RealtyTrac recently launched a beta version of a new tool that it hopes will become the “Carfax” of the residential home market by telling the homebuyer as well as the lender all the foibles of a residential property. The product’s official name is Home Disclosure and it promises consumers a comprehensive view of a property that they plan to buy or rent in the future. Current property owners, as well as lenders, can access the information as well. The report is broken down into ...
Mortgage industry representatives are meeting this week with Consumer Financial Protection Bureau Director Richard Cordray in another attempt to squeeze out additional clarification to help lenders comply with the bureau’s integrated disclosure rule, which took effect Oct. 3, 2015. The ambiguity and confusion engendered by the rule continues to contribute to mortgage closing delays throughout the country, according to many top industry officials. Executives of the Independent Community Bankers of America were scheduled...
PHH Corp. and Nationstar Mortgage – both top 10 ranked residential servicers – recently filed to sell debt securities, an odd situation for two companies struggling with low share valuations amid a lack of confidence among both investors and stock analysts. The lender/servicers also have unveiled stock buyback programs, though such announcements usually represent a desire to do so, and not a contractual obligation. PHH’s Form S-3 filing with the Securities and Exchange Commission offers...
It’s too soon to tell whether marketplace lending will disrupt traditional mortgage lending, but analysts such as Freddie Mac economist Sean Becketti predict that the alternative, Internet-based lending structure will have an impact. “Will marketplace lenders become an Uber-like disruptive force in consumer lending, or are they simply old-fashioned consumer lending dressed up for the Internet?” asked Becketti. “It's too soon to tell.” But the swift growth of the industry, coupled with its emphasis on Internet outreach and novel underwriting practices, has led...
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