One option that some affiliated business arrangements can use as a mechanism to cope with the CFPB’s ability to repay rule is to change their ownership structure, according to a top industry compliance attorney. Loretta Salzano, a founding partner of Franzén and Salzano, warned attendees at the recent Real Estate Settlement Providers Council’s 2014 annual conference that, “Lenders with affiliated providers must consider the ATR’s impact on their business based on the number and type of affiliates, the break point based on fees of all affiliates, the average loan amount, and the markets served.” Part of that process means lenders have to look and see where their break point is, the point at which they will breach the 3 percent...
As part of the CFPB’s public forum last week during which the agency announced its forthcoming eClosing pilot project, the bureau also issued guidelines that articulate the minimum functionalities required of potential participants and spell out the features the CFPB wants to test in the pilot. To join the bureau’s pilot on electronic closings, each participant must currently have a system that meets minimal technical capabilities and requirements, as demonstrated by specific features and functionalities. “The CFPB created these minimum requirements to ensure that the pilot program is focused on the specific features and consumer outcomes that the bureau is seeking to evaluate,” the agency said.First, a pilot participant must have an eClosing solution with the ability to store...
If you thought the CFPB was finished with the mortgage closing process when it issued its integrated disclosure rulemaking under the Real Estate Settlement Procedures Act and the Truth in Lending Act, think again. The bureau also sought public input on the “pain points” associated with getting a new mortgage, and based on the comments received to date, the agency has identified 1,480 such spots, according to Brian Webster, the originations program manager for mortgage markets at the CFPB.So last week, in a high profile public forum attended by officials of other housing-related federal agencies as well as industry representatives and consumer advocates, the bureau announced it would roll out later this year a voluntary, three-month e-Closing pilot project...
“The examiner-in-charge apparently thought that the owner was lying, and the CFPB now wants to question him under oath,” principal Joe Garrett writes in a note to his clients.
Fannie Mae Announces Changes in Desktop Underwriter for VA Loans. On April 15, Fannie Mae issued a release note announcing several changes to Desktop Underwriter for VA loans that will take effect during the weekend of May 17, 2014. The DU determination of when a bankruptcy occurred on VA loan case files will be updated. With the May change, bankruptcy information found in publicly accessible segments of the credit report will be used in determining when the bankruptcy occurred. A waiting period requirement will then be applied. The bankruptcy information in the tradeline segment will only be used to determine when the bankruptcy happened if the public records show no such info. However, if the records do reflect a bankruptcy but the date is either blank or invalid, DU will issue a “refer” recommendation. The lender must review the credit report and bankruptcy documentation to ...
HUD Secretary Shaun Donovan said this week that housing finance reform can no longer be put off, but no more so than for the FHA which continues to play an “outsized role” in the mortgage market as private capital remains on the sidelines. Speaking in New York at an event co-hosted by the Bipartisan Policy Center, Donovan said the Obama administration is squarely behind the legislative proposal by Senate Banking, Housing, and Urban Affairs Committee Chairman Tim Johnson, D-SD, and Ranking Member Mike Crapo, R-ID. “Despite its imperfections, does this bill represent progress? Absolutely,” said Donovan, seeking to win over housing advocacy groups disenchanted with the bill. “When looking for ways to improve [the bill], let’s not lose sight of its potential. Let’s not forget its importance to the housing market and its future.” The Johnson-Crapo legislative proposal calls for a wind-down of Fannie Mae and Freddie Mac and creation of a ...
The Consumer Financial Protection Bureau will launch a new, voluntary pilot project later this year to promote e-closings as a way to reduce or eliminate many of the “pain points” associated with the mortgage closing process. But officials at FHA and Ginnie Mae were eager to jump on board and reinvigorate similar efforts of their own in this regard, as many government and industry representatives tried to capitalize on a renewed sense that e-mortgages and a greater use of technology can transform the entire origination process – for all stakeholders, not just consumers. “We’re very excited to see the continued advancement of not only the use of technology, but hopefully more effective means of working together as an industry to improve the overall mortgage process,” said FHA’s Patricia McClung, acting director of single family program development, at a public forum ...
Wells Fargo has expanded its acceptance of electronic signatures on FHA mortgage-related documents to correspondent lenders – a move that could spur other lenders to consider a similar shift as purchase originations rise. Details of the expansion are available in Wells Fargo current Seller Guide. However, access is restricted to correspondent lenders because the guide contains proprietary information, according to a company spokesman. DocuSign, whose Digitized Transaction Management (DTM) platform is being used by Wells Fargo and other financial services clients, said the expansion follows FHA’s announcement earlier this year of acceptance of e-signatures on all single-family origination and servicing/loss mitigation documents, FHA claims and real estate-owned sales contracts, with the exception of notes. The FHA announcement builds on an ...
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