Some lenders have vowed to close loans without IRS verifications, filling the void by asking for additional and in-depth documentation – but only on retail-sources mortgages.
As the partial shutdown of the U.S. government enters its second week on Oct. 7, the CFPB remains fully staffed, funded and operational, so any financial services providers that assumed they might get a bit of a regulatory, compliance or enforcement reprieve would be well advised to press on full-steam ahead. All of the key federal financial regulators – the bureau, the Federal Reserve, the Federal Housing Finance Agency, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency – remain open as usual...
The CFPB recently revised its final servicing and mortgage origination regulations, and while its changes were welcome, a significant number of issues remain unresolved, an industry group told the bureau late last week. Further, without additional clarification and definition, the group said the mortgage industry will probably impose additional safeguards that will cause even more credit tightening beyond the already tight standards limiting many prospective borrowers. “The final regulations still do not provide...
The assignee liability inherent in the Dodd-Frank Act and the CFPB’s ability-to-repay rule will keep institutional investors away from the non-agency mortgage-backed securities market, resulting in less credit availability for mortgages that fall outside the ATR’s qualified mortgage standard, John Gidman, president of the Association of Institutional Investors, told the Senate Banking, Housing and Urban Affairs Committee last week. The Dodd-Frank Act and the CFPB’s subsequent regulations create a path for a defaulting...
Last week, the Department of Housing and Urban Development came out with its own version of a “qualified mortgage” rule for FHA-backed mortgages based largely on the QM standard incorporated in the CFPB’s ability-to-repay rule early this year. Following the CFPB’s QM definition, HUD’s proposed rule defines both a safe-harbor QM and a rebuttable-presumption QM. HUD’s QM definition also incorporates the points-and-fees limitation scale from the CFPB’s final rule. “The significant departure from the CFPB’s definition is the way in...
Banks are required to provide consumers with certain information about their financial products. But under a new trial disclosure policy the CFPB finalized recently, banks may apply for a waiver to test potential disclosure improvements on a trial basis. Under the terms of the finalized policy, if the CFPB approves a specific trial, then, for the duration of an agreed testing period, the bureau will deem a testing company’s disclosure, to the extent that it is used in accordance with the terms and conditions approved by the agency, to...
Late last month, the CFPB put out an interim final rule with a request for public comment on its new rules of practice for issuing temporary cease‐and‐desist orders. The bureau’s rule generally tracks along the trajectory of the Federal Deposit Insurance Corp.’s approach. That’s likely because Section 1053(c) of the Dodd‐Frank legislation, which authorizes the bureau to issue temporary C&D orders, resembles the comparable provision in the Federal Deposit Insurance Act. Those authorities authorize a temporary C&D as an...
Last week, the CFPB brought an enforcement action against Meracord LLC, a leading debt-settlement payment processor, and CEO/owner Linda Remsberg for allegedly helping others to collect millions of dollars in illegal upfront fees from consumers. The CFPB accused Meracord and Remsberg of violating the Telemarketing Sales Rule by helping debt-settlement companies charge consumers upfront fees. The rule prohibits debt-settlement companies from charging consumers such fees before settling any of their debts. It also protects consumers from...
Loan originators these days not only are looking over their shoulders, they’re also getting skittish about what lies ahead of them. Some of their backward-facing anxiety has to do with this summer’s CFPB suit against the nonbank lender, Castle & Cooke of Utah, and two of its top executives for allegedly paying bonuses to loan officers who steered consumers into mortgages with higher rates.During a recent special webinar sponsored by Inside Mortgage Finance, an affiliated newsletter, Jay Laifman, counsel with the Buckley...
RSS