The CFPB is apparently under such time constraints to promulgate its various rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act, it can no longer wait to publish them in the Federal Register. A recent final rule from the bureau says its final rules will now be considered “issued” on the earlier of the rules’ posting on the agency’s website or publication in the Federal Register. The CFPB says the definition of when a rule is issued has legal consequences, and the bureau generally intends to issue rules by...
The CFPB convinced a federal district court in Miami to require a nationwide debt-relief services company to refund up to $100,000 to consumers who were allegedly unlawfully charged advance fees for debt settlement services. State Attorneys General of New Mexico, North Carolina, North Dakota and Wisconsin and the Hawaii Office of Consumer Protection joined the bureau’s lawsuit, making this the CFPB’s first joint-enforcement action with the states. The bureau asserted that the defendant, Payday Loan Debt Solution...
Is the Mortgage Servicing Rule Next? The CFPB has a field hearing scheduled for January 17 in Atlanta, and the industry scuttlebutt is that the bureau might release its mortgage servicing rulemaking sometime the day before. Last week, the CFPB released to the press, on whatfs known as an gembargoedh basis, many of the details of its gqualified mortgageh/ability-to-repay final rule on the afternoon before the bureaufs Jan. 10 mortgage policy field hearing in Baltimore, MD. The actual final rule, however, was not...
The Consumer Financial Protection Bureau this week issued a long-awaited final rule that establishes ability-to-repay and qualified mortgage (QM) standards, as well as a second, temporary category of QMs for government-backed mortgages to avoid market disruption. At the same time, the CFPB sought comment on a proposed rule that would exclude new and existing FHA, VA and Rural Housing Service (U.S. Department of Agriculture) programs that facilitate refinancings for borrowers at risk of delinquency or default. The temporary QM category was spurred by CFPB’s concern about the ...
The Consumer Financial Protection Bureau has issued its long-awaited “qualified mortgage” ability-to-repay final rule that, as expected, includes an exception for Fannie Mae and Freddie Mac mortgages and does little to facilitate a rebound in the non-agency sector. Mortgage lenders will be presumed to have complied with the ability-to-repay rule if they originate “qualified mortgages” that prohibit or limit the risky features believed to have harmed consumers in the recent mortgage crisis. That means...
It is 2013 and courtrooms across the country continue to hum with investor disputes over issuer liability for MBS investments that went bad. In its third lawsuit against JPMorgan Chase since mid-2011, the National Credit Union Administration is seeking millions of dollars in damages in connection with the packaging and sale of $2.2 billion in MBS issued by the now-defunct Washington Mutual to three corporate credit unions long before it was acquired by JPMorgan in 2008. Filed in Kansas federal court, the NCUA lawsuit alleged...
Proponents of creating a covered bond market in the U.S. say the prospects of such a move have never looked better in the wake of legislative momentum in Congress, the off-year election year and the adoption of a covered bond framework in Canada. Last month, Canada’s national housing agency announced details of the legal framework for the issuance of Canadian covered bonds. Under the framework, registered covered bonds will be issued through a program that will be run by the Canada Mortgage and Housing Corp. The Canadian framework will operate...
The final rule issued by the Consumer Financial Protection Bureau this week to define ability-to-repay requirements and “qualified mortgages” puts non-agency and subprime mortgages at a significant disadvantage to prime and agency mortgages. The slant against non-agency loans goes beyond what was required by the Dodd-Frank Act, according to industry analysts. The rule is set to take effect Jan. 10, 2014. Under the final rule, qualified mortgages must meet...
The Consumer Financial Protection Bureau this week issued a final rule setting new restrictions and requirements for high-cost mortgages. The rule implements requirements set by the Dodd-Frank Act and will take effect in January 2014. For first-lien mortgages, high-cost loans have annual percentage rates 6.5 percentage points or more above the average prime offer rate. The APR threshold for second liens is 8.5 percent above the APOR. The DFA expanded the definition of high-cost mortgages to include purchase mortgages and home-equity lines of credit in addition to refinances. The CFPB noted...
An $8.5 billion settlement this week between federal regulators and 10 servicers included a large portion of non-agency mortgages. Servicers with significant non-agency holdings were also left out of the settlement, though federal regulators said they are still working toward a deal with those companies. The settlement applies to foreclosures initiated in 2009 and 2010. Non-agency mortgages had much higher foreclosure rates than other mortgage types during that time. Aurora, Bank of America, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank and Wells Fargo agreed...
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