Former Fannie CFO Howard said this leaves the government-controlled mortgage giant to pay about $7 billion over the next 10 years in premiums and hedging costs.
CFPB Director Richard Cordray last week defended the approach his agency has taken in its public enforcement actions, which many in the industry have criticized as “regulation by enforcement.” “I think that criticism is badly misplaced,” Cordray said Wednesday in a speech at a meeting of the Consumer Bankers Association in Phoenix. Certainly, he said, any responsible official charged with enforcing the law has to recognize that he should be thoughtful in how he deploys his agency’s limited resources most efficiently to protect the public. “That means working toward a pattern of actions that conveys an intelligible direction to the marketplace, so as to create deterrence that can be readily understood and implemented,” said the CFPB chief. The alternative, as ...
The U.S. District Court for the Central District of California last week granted the CFPB’s request for a final judgement against debt relief company Morgan Drexen, Inc., bringing to an end a lawsuit filed by the bureau back in August 2013. The agency alleged that the company and its leadership charged illegal upfront fees for debt relief services and misrepresented their services to consumers. According to the CFPB, when consumers signed up for Morgan Drexen’s services, the company presented them with two contracts, one for debt settlement services and one for bankruptcy-related services. Based on its investigation, the bureau brought suit alleging that consumers who signed up sought services for debt relief and not bankruptcy, that little to no bankruptcy ...
Last week, the CFPB asked the U.S. District Court for the Central District of California Southern Division to enter a final judgment and order that would shut down Student Loan Processing.US, and crack down on its sole owner, James Krause, for allegedly charging borrowers millions of dollars in illegal upfront fees for federal student loan services. The order would also require the company to pay refunds to thousands of consumers the bureau says were harmed, as well as a civil money penalty. In December 2014, the CFPB sued the company and Krause, alleging they illegally marketed and sold services promising to advise and assist borrowers applying for Department of Education student loan repayment programs. According to the bureau’s complaint, the ...
CFPB Now Accepting Complaints About Online ‘Marketplace’ Lenders. The bureau is now taking complaints from the public about online marketplace lenders, including companies that play in the mortgage space. “When consumers shop for a loan online we want them to be informed and to understand what they are signing up for,” said CFPB Director Richard Cordray. “All lenders, from online startups to large banks, must follow consumer financial protection laws. By accepting these consumer complaints, we are giving people a greater voice in these markets and a place to turn to when they encounter problems.” The bureau also released a consumer bulletin that outlines tips for consumers who are considering taking [with exclusive data chart] ...
Full Senate to cosponsor a bipartisan bill that aims to make sure guaranty fees from Fannie Mae and Freddie Mac will not be used for other purposes. Legislation, S.752, was introduced by Sens. Bob Crapo, R-ID and Mark Warner, D-VA, in March 2015, to establish a scorekeeping rule so g-fee increases aren’t going toward offsetting spending that increases the deficit. Tom Salomone, president of the NAR, said any time g-fees are extended, increased and diverted for unrelated spending, homeowners are charged more for their mortgage and taxpayers are exposed to additional long-term risk. He emphasized that the purpose of g-fee revenue is to guard against GSE credit losses and should only be used to protect taxpayers from mortgage losses.
The former CFO of Fannie Mae is not a fan of the GSE’s popular Connecticut Avenue Securities risk-sharing transactions, noting that the terms and pricing on recent CAS deals have worsened since the program began in 2013. Tim Howard, who left Fannie in 2004 and was involved in litigation regarding his tenure there, said the costs incurred don’t match the potential benefit, especially in the company’s latest transactions. Over the past three years, Fannie has issued $13.4 billion in CAS notes covering $467 billion in newly originated single-family mortgages. Howard said this leaves the company to pay about $7 billion over the next 10 years in premiums and hedging costs.
The Federal Housing Finance Agency this week filed a request to transfer lawsuits brought by Fannie Mae and Freddie Mac shareholders in four district courts to the U.S. District Court in Washington. The government-sponsored enterprise regulator hopes to ward off future “copycat” cases and those where plaintiffs may be encouraged to “shop” for the best forum, based on the ruling. FHFA said it is certain that the number of pending complaints challenging the quarterly U.S. Treasury sweep of Fannie and Freddie net income will continue to grow. As a result, the agency said the transfer would be more efficient and benefit the parties and courts. “The claims and relief sought in each of the four related cases are...
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