Remember the Dec. 29, 2015, “clarifying letter” that CFPB Director Richard Cordray sent to the Mortgage Bankers Association? Initially, the letter relieved industry anxiety regarding TRID errors, at least to some degree. But over the past few weeks, certain lenders have once again grown nervous and are reporting resistance by secondary market investors that are turning down their mortgages because of TRID errors. For loan buyers, the issue is assignee liability. The MBA is believed to be a key player trying to persuade the bureau to publish the letter in the Federal Register. An industry lobbyist noted that one week after the clarifying letter came to light, MBA “applied immediate pressure to get the letter into Register form. The CFPB ...

The Republican-controlled House Financial Services Committee last week used the consideration of fiscal year 2017 budget views and estimates (BVE) as an opportunity to take another shot at the CFPB. The minority Democrats tried to amend the GOP package but were shut down on a party-line basis. According to the Republicans’ “print” of the FY17 BVE, the majority’s view is that although the Dodd-Frank Act established the CFPB within the Federal Reserve System, it assigns no role to Congress or the Federal Reserve in overseeing its budget or use of funds. “The effect of the CFPB’s unorthodox budgetary treatment is that every dollar it draws directly reduces the Federal Reserve System’s annual remittances to the Treasury, thus lowering the amount ...

The Mortgage Bankers Association last week wrote the CFPB and other government regulators and agencies to warn that a rule adopted by the Federal Communications Commission last year could harm mortgage servicers when they try to provide early intervention with homeowners who are delinquent on their mortgages. The FCC’s order aims to bolster consumer protections against unwanted telephone calls and texts by, in part, restricting the ability of mortgage servicers, debt collectors and others to make autodialed or prerecorded phone calls without prior express consent of the person called. Violators can be subject to fines of $500 per phone call. But according to the MBA, the rule “threatens to expose mortgage servicers to significant and possibly unavoidable liability when they ...

Wells Fargo Settles with FHA for a Record $1.2 Billion. Wells Fargo, the largest player in the Ginnie Mae market, last week agreed to pay the Department of Justice and Department of Housing and Urban Development $1.2 billion to settle FHA underwriting claims. In a filing with the Securities and Exchange Commission, Wells noted that the agreement “resolves certain civil claims that the federal government had pending” against the lender tied to FHA lending from 2001 to 2010. But it also covers “other potential civil claims relating” to the megabank’s government production in other time periods as well. The megabank, which also is the nation’s largest overall home lender and servicer, saw the settlement coming and booked an additional “legal ...

The FHA has given lenders and servicers an additional extension through April 17, 2016, to submit due-and-payable notices when Home Equity Conversion Mortgage borrowers fall behind on their property tax or insurance payments. The extended deadline also provides FHA lenders and servicers an opportunity to pursue loss mitigation before initiating foreclosureThe latest deadline extension was the second such extension. In April 2015, the FHA announced a policy change providing HECM lenders and servicers an additional 60 days in which to initiate foreclosure proceedings against any troubled HECM borrower with a case number issued prior to Aug. 4, 2014, with a non-borrowing spouse. Lenders and servicers are required to comply with reasonable-diligence timeframes for such HECMs. Debenture interest will not be curtailed during this period. The April policy allows mortgagees full discretion as to when to use the extension.

Trade groups concerned about privacy violations in the proposed collection of data in the National Survey of Existing Mortgage Borrowers voiced their concerns to the Federal Housing Finance Agency last week. The FHFA has been seeking comments on the proposed voluntary survey of borrowers who have a first mortgage loan secured by a single-family home. Everything from the borrower’s name and address to financial records, mortgage and credit card information and race and household composition will be addressed in the approximately 80-question survey. While the 10 trade groups, including the American Bankers Association, Housing Policy Council, Independent Bankers of America and Mortgage Bankers Association, agree with...

The Federal Housing Finance Agency’s Office of the Inspector General determined that the agency failed to properly oversee the GSEs’ single-family mortgage underwriting standards and variances. As a result, the OIG has reopened its recommendation from a previous audit report until the FHFA proves it has fully implemented the proper oversight. …

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...

A surge in sales of mortgage servicing rights by banks to nonbanks is likely over, according to industry analysts. As regulatory oversight remains a concern, the use of subservicing is expected to increase, with troubled loans handled by specialists. “The frequency of MSR transfers will remain low, even though buyer interest in MSR transfers may rise from 2015 levels,” according to analysts at Moody’s Investors Service. Analysts at Bank of America Merrill Lynch added...

Joint civil fraud initiatives have resulted in $558.5 million in recoveries and receivables to the Department of Housing and Urban Development in FY 2015, according to the HUD inspector general’s semiannual report to Congress. The amount includes civil settlements of $212.5 million from First Tennessee Bank, $29.6 million from Reverse Mortgage Solutions, and $1.8 million from three other settlements. The settlements resolved enforcement actions brought by the Department of Justice on behalf of HUD in pursuit of civil remedies under a variety of statutes, including the False Claims Act, Program Fraud Civil Remedies Act, and the Financial Institutions Reform, Recovery and Enforcement Act. Recoveries and receivables for other entities during the reporting period – April 1 to Sept. 30, 2015 – totaled $86.9 million and $268.2 million for the entire fiscal year. Some of the payments were made to the ...