Earlier this month, the CFPB finally issued its long-awaited proposed rule to drastically scale back the ability of consumer financial companies to use pre-dispute arbitration clauses in their contracts for consumer financial products and services. The proposed rule would impose two sets of limitations on the use of pre-dispute arbitration agreements by covered providers of consumer financial products and services. First, it would prohibit providers from using such an agreement to block consumer class actions in court and would require providers to insert language into their arbitration agreements reflecting this limitation. “This proposal is based on the bureau’s preliminary findings – which are consistent with [its earlier] study – that pre-dispute arbitration agreements are being widely used to prevent consumers from seeking ...

MBA Calls for New QM Rules, Warns About ‘Regime Change’ Risk. The Mortgage Bankers Association is calling on the CFPB to develop a new qualified mortgage rule because the current one only works because of the so-called “GSE patch.” At the trade group’s annual secondary market conference in New York, MBA President and CEO Dave Stevens noted that Fannie Mae and Freddie Mac currently are approving “a lot” of loans that exceed the benchmark debt-to-income cap of 43 percent that is codified in the current QM rule. That GSE patch disappears in 2021 or when Fannie and Freddie are taken out of conservatorship, whichever comes sooner...

Hensarling Slams CFPB, Vows Big Changes to Dodd-Frank, the Bureau. During a speech last week at the National Center for Policy Analysis, Rep. Jeb Hensarling, R-TX, chairman of the House Financial Services Committee, pledged to push a package of pro-growth, pro-consumer reforms as an alternative to the Dodd-Frank Act, including clipping the wings of the CFPB. “At almost every opportunity, the bureau abuses and exceeds its statutory authority, which is already immense,” said the congressman. “The bureau operates with such secrecy, unaccountability, and bureaucratic tyranny it would make a Soviet Commissar blush.”As the committee moves forward with its plans for financial reform, Hensarling promised the Republicans will have ...

Industry Vendors Roll Out TRID-Compliant LOS in 50 Days. Three industry vendors, Open Mortgage, LendingQB and International Document Services, partnered to successfully implement a TRID-compliant loan origination system in just 50 days, exceeding their own projections, the companies announced recently. “We knew that our implementation timeline was aggressive, wanting to both implement a new LOS and prepare for TRID within 60 days,” said James Howard, chief technology officer of Open Mortgage, a multi-channel mortgage lender. "Our success was due to having clear implementation plans with our vendors and a team at Open Mortgage that was dedicated to the project,” he added...

Accelerated growth through the acquisition of mortgage servicing rights is an undertaking that remains challenging to the industry, said the MMC…

Draft standards proposed by the Structured Finance Industry Group to address TRID mortgage disclosure issues adequately address the risks posed to non-agency MBS, according to Moody’s Investors Service. The rating service published a detailed analysis of SFIG’s draft proposal this week. On March 18, SFIG proposed a draft standardized approach to the scope of review for exceptions to the combined Truth in Lending Act and Real Estate Settlement Procedures Act ...

Over the past five years, the issuance market for securitization has fluctuated between feast and famine, noted one executive…

Today’s reduced liquidity is here to stay because of increased regulation and the unprecedented dominance of the Federal Reserve in the agency MBS market, said the Urban Institute. The top five dealers were responsible for about 55 percent of agency-MBS transactions in 2006, but today’s top five account for approximately 80 percent, Urban Institute analysts said. According to Inside MBS & ABS estimates, the Fed held 27.3 percent of outstanding agency single-family MBS ...

One observer noted: “Talk about a government takeover! This feels third-world to me…”

A preliminary analysis of 2015 Home Mortgage Disclosure Act reports suggests that loan denial rates declined slightly last year. ComplianceTech, a supplier of fair lending and HMDA technologies for lenders and others, recently released an “EarlyLook” at its online Lending Patterns database of HMDA reports. A group of 175 lenders had a combined $730.9 billion in mortgage originations last year, up 35.7 percent from its volume back in 2014. The 175 aren’t necessarily the ...