U.S. Sens. Roy Blunt, R-MO, Jerry Moran, R-KS and Mark Begich, D-AK, wrote Consumer Financial Protection Bureau Director Richard Cordray late last week, urging the regulator to include a broad definition of “qualified mortgage” – and a true legal safe harbor for conforming loans – in the bureau’s forthcoming ability-to-repay rules. “These rules will have a dramatic impact on the mortgage market, and if drafted too narrowly could severely restrict access to mortgage credit,” the trio wrote. “To prevent these unintended consequences...

American International Group, MGIC Investment, Genworth Financial and Radian Group have been served with subpoenas by the Consumer Financial Protection Bureau, the firms said in public filings last week, as the bureau is apparently probing to determine if the mortgage insurance companies transferred billions in M.I. premiums to the banks that made the mortgages. PHH Corp. made a similar disclosure back in January. The CFPB’s subpoenas, known as Civil Investigative Demands, indicate that the bureau’s enforcement...

Last week, the Office of the Comptroller of the Currency and the Department of Justice announced a $12 million settlement that resolves legal and regulatory actions brought against Capital One for alleged violations of the Servicemembers Civil Relief Act, including foreclosing without a court order. The agreement requires Capital One to pay approximately $7 million in damages to service members for SCRA violations, including at least $125,000 in compensation plus compensation for any lost equity (with interest) to each service...

Hawaii. Last month, the state Department of Commerce and Consumer Affairs announced a transition period for certain mortgage loan originator companies (MLOCs) to comply with recently enacted mortgage loan originator (MLO) licensing requirements. Retroactively effective as of July 1, 2012, all exempt registered MLOs and MLOCs of a subsidiary of an insured depository institution regulated by a federal banking agency must be licensed under the state’s SAFE Act. Affected MLOs may continue to originate mortgage loans…

Consumer Financial Protection Bureau. Privileged Information Rule Now Effective. The Consumer Financial Protection Bureau’s final rule on the confidential treatment of privileged information becomes effective Monday, Aug. 6, 2012. The rule makes clear that an institution that provides privileged information to the CFPB does not waive any privilege it may have related to third parties, and that bureau sharing of privileged information to another federal or state government agency does not waive any privilege that might apply...

Inside Mortgage Finance Publications’ latest website poll doesn’t show a lot of optimism about the Consumer Financial Protection Bureau and its potential effectiveness. The poll began by noting that the CFPB recently passed its one-year anniversary as an up-and-running federal regulator. Respondents then were asked: Do you think the CFPB has done a good job so far? A whopping 52 percent choose the option that read: “I don’t think the CFPB will ever do a good job given its mandate to protect consumers even if it means crippling the...

The top priority in any effort to revamp, reform or otherwise reduce risk in the $1.8 trillion tri-party repurchase or repo market should be to clearly determine “who’s in charge from a federal perspective,” according to a top Senate Democrat. In holding this week’s hearing of the Senate Banking Subcommittee on Securities, Insurance and Investment, Chairman Jack Reed, D-RI, said the government needs to defuse potential risk to the tri-party repo credit market for funding as an act of emergency preparedness rather than allow another financial crisis, such as what crippled the market in 2008. “One of the lessons we learned...

The withdrawal of one of the biggest opponents to Bank of America’s pending $8.5 billion settlement with non-agency mortgage-backed security investors will not necessarily speed approval of the deal, according to industry analysts. Last month, the hedge fund Baupost (known as Walnut Place in the lawsuit) dropped its objections to the settlement and moved to sell some its holdings on Countrywide Financial non-agency MBS. A number of other entities continue to oppose the settlement, including AIG and ...

In response to criticism that the Home Affordable Modification Program is susceptible to fraud, the Treasury Department recently established a fraud detection program with unprecedented penalties for the non-agency portion of HAMP. In certain circumstances, the Treasury will recapture any servicer, borrower or investor incentive payments, even for loan modifications completed before the new fraud detection program was announced. The process was detailed in HAMP Supplemental Directive 12-04. The Treasury said it hired ...