While legal attempts by city governments to force large banks to pay for the high cost of foreclosure have failed, efforts to resolve the problem in state legislatures appear to be making headway. The City of Miami suffered consecutive defeats in three of the four lawsuits it filed against major banks after a federal district court judge dismissed all three because of the city’s lack of standing to bring suit under the federal Fair Housing Act. U.S. District Court Judge William Dimitrouleas dismissed...
Representatives of the various segments of the mortgage banking world are mostly receptive to a hypothetical “right to cure” an otherwise qualified mortgage loan that inadvertently breeches the QM 43 percent debt-to-income threshold – despite the complexity associated with putting it into play. Most supporters of such a corrective mechanism agreed with the Consumer Financial Protection Bureau that utilizing it could be complicated. “We agree that creditors’ use of any DTI cure provision would be limited. Nevertheless, we do not believe the idea should be dismissed simply because it may be complicated,” the Consumer Mortgage Coalition said in its public comment letter to the agency. The Housing Policy Council of the Financial Services Roundtable also acknowledged...
The Consumer Financial Protection Bureau late last week said it will take a close look at mortgage brokers acting as mini-correspondents, particularly if they are just trying to get around disclosure requirements and limits on broker compensation. The CFPB is concerned that some mortgage brokers are claiming to be mini-correspondent lenders by establishing warehouse funding lines when they are still essentially just facilitating a transaction between a borrower and a lender. “While some brokers may be setting up such arrangements because they intend to grow into full correspondent lenders, the bureau is concerned...
According to an Inside Mortgage Finance analysis of loan-level data on mortgage-backed securities from the GSEs, underwriting standards on mortgages have loosened only slightly over the past year.
“In essence, defendant asserts that the court should merely take its word that the documents – some of which defendant itself has not reviewed – are privileged,” wrote Sweeney. “This suggestion runs contrary to law.”
The American Bankers Association said its members were not able to clearly identify instances where a DTI cure mechanism would be useful in the normal course of bank operations.
Ocwen's consumer council will consider issues such as principal reduction loan modifications, reducing urban blight, helping minorities and improving language access to borrowers with limited English proficiency.
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