The Federal Housing Finance Agency Office of Inspector General said late last week that the FHFA is not doing a good job of monitoring the escalating costs associated with Fannie Mae’s new headquarters being constructed in downtown Washington, DC. This is the second time the agency watchdog has blasted the FHFA for not properly overseeing the build-out of the leased office space comprised of two office towers connected by multiple glass bridges. In a new audit, the IG questioned upgrades on the Class A office building that cost more than the typical $175 per rentable square foot.

On the heels of the Equifax data breach fiasco, the Federal Housing Finance Agency was deemed ineffective when it comes to supervising the GSEs on cybersecurity risks, according to a recent report from the agency’s Office of Inspector General.  In a previous report, the OIG asked the FHFA to examine policies about how Fannie Mae and Freddie Mac manage their cyber risks and address vulnerabilities. It noted that the GSEs store, process and transmit significant amounts…

A new report from the House Financial Services Committee staff accuses CFPB Director Richard Cordray of misleading Congress about the bureau’s probe of the unauthorized account creation scandal at Wells Fargo, rushing into a settlement without doing the requisite leg work, and agreeing to a paltry settlement when he could have slammed the company for at least $10 billion in fines. As a part of its investigation into the Wells Fargo fraudulent account scandal, the committee said it has obtained a crucial new document – the “Recommendation Memorandum” – that was presented to and approved by Cordray.“The Memorandum shows that the CFPB estimated that the bank was potentially liable for a statutory monetary penalty exceeding $10 billion,” said the committee. “This ...

Inspector General recently released a paper about the need for continued oversight of activity in the growing GSE multifamily market. Combined, Fannie Mae and Freddie Mac purchased $112 billion in multifamily mortgages last year. The paper noted that while much of the reform discussion has focused on single-family housing, the GSEs’ role in the multifamily market is a critical aspect of the housing finance system. Market-wide multifamily originations, along with Fannie and Freddie purchases of multifamily mortgages, have grown to record levels in recent years, said the OIG. But multifamily mortgages are more complex to underwrite than single-family loans. “Underwriters of multifamily loans must understand the business and...

CFPB Director Richard Cordray is still on the job, but did take a step toward throwing his hat into the ring for the race for the Ohio governor’s mansion, delivering remarks at the Labor Day Picnic of the Cincinnati AFL-CIO. Cordray, sounding like a political candidate, according to those in attendance, briefly extolled all the work the bureau has done on behalf of consumers, including the mortgage reforms that have forced so much change upon lenders. The director noted, “So far, our enforcement work has led to about $12 billion in relief to 30 million people who were cheated or mistreated, and who deserve to get things fixed and get their money back.” His remarks also harkened back to his ...

The CFPB’s final rule banning arbitration agreements, as well as pending rulemakings on payday and small-dollar lending and on debt collection practices, may live or die on the decision of Director Richard Cordray to exit his term before it expires in July. That prospect could be motivating him to linger in his current gig as opposed to resigning right now to enter the race for Ohio’s governorship, according to an analysis of the current lay of the land at the bureau from a former senior official at the agency. Former CFPB Assistant Director and Deputy General Counsel Quyen Truong, now a partner at Stroock & Stroock & Lavan in DC, noted that it is still unclear whether Republicans in the ...

An audit of the Federal Housing Finance Agency’s privacy program led the FHFA Office of Inspector General to make recommendations to address several weaknesses. The program was designed so the FHFA can implement privacy and data protection procedures governing its collection, use, sharing, disclosure, transfer, storage and security of information in an identifiable form related to employees and the public. Kearney & Company performed the audit and found that the FHFA had not effectively met three out of nine privacy requirements and controls.The report made several recommendations to make sure the agency adequately identifies, monitors, and protects the complete inventory of its personally identifying information (PII) holdings and appropriately approves and documents privileged user access.

The CFPB and the other members of the Federal Financial Institutions Examination Council last week issued new examiner transaction testing guidelines for all financial institutions that report under the Home Mortgage Disclosure Act. The rules will apply to the examination of HMDA data collected starting in 2018 and reported beginning in 2019. The guidelines eliminate the file-error resubmission threshold under which a financial institution would have to correct and resubmit its entire Loan Application Register (LAR) if the total number of sample files with at least one error reached or exceeded a certain threshold, the bureau said. They also establish allowable tolerances for certain data fields for the purpose of counting errors toward the field-error resubmission threshold.Additionally, they provide ...

There may be plenty of uncertainty about the direction of the CFPB these days, given that Republicans are calling the shots on Capitol Hill and at the White House, plus the fact that Richard Cordray’s days as director of the bureau are numbered, regardless of when he actually ends up departing. Still, mortgage servicers can continue to expect robust supervision and regulation – and enforcement –if not from the bureau, then from another federal regulator, as well the states, and maybe all of the above, according to Steven Frie and Mark Shannon, top servicer analysts at S&P Global Ratings. “It’s been pretty common knowledge that the CFPB has been very active in regards to regulating the mortgage servicing industry,” Frie said ...

Cordray Takes to the NYT to Defend CFPB Arbitration Rule. CFPB Director Richard Cordray took to the opinion page of The New York Times last week to make a public plea in support of the CFPB’s controversial arbitration rule. Cordray cited claims by opponents of the rule that plaintiffs make out better financially by acting individually instead of acting collectively in a group lawsuit. “This claim is not supported by facts or common sense. Our study contained revealing data on the results of group lawsuits and individual actions,” he said. “We found that group lawsuits get more money back to more people. In five years of group lawsuits, we tallied an average of $220 million paid to 6.8 million consumers ...