Recent supervisory efforts by the Consumer Financial Protection Bureau have focused on “sloppy” servicing transfers and other loss mitigation issues. In a “supervisory highlights” review published this week, the CFPB said that between November 2012 and June 2013, it discovered several issues with servicing transfers that can cause borrowers to miss payments, delay important processes or affect the good standing of a borrower’s mortgage. The CFPB said its examiners found noncompliance with ...

Servicers last week rejected offers from Richmond, CA to purchase 624 mortgages located in the city. Richmond now plans to seize the mortgages via eminent domain but has yet to make the move and faces significant opposition from mortgage industry participants. The five servicers participating in the $25 billion national servicing settlement have provided borrowers with $51.33 billion in gross relief through the end of the second quarter of 2013, according to the settlement’s monitor ... [Includes five briefs]

President Barack Obama met privately with CFPB Director Richard Cordray and other top financial regulatory officials last week in an effort to stimulate more progress in implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was enacted three years ago last month. According to various press accounts, the president’s biggest concern was reining in “too big to fail,” one area outside of the bureau’s bailiwick. Other officials in attendance included Treasury Secretary Jacob Lew and Federal Reserve Chairman...

The Department of Housing and Urban Development, as expected, recently asked a federal district court in Washington, DC, to stay further proceedings in American Insurance Association vs. HUD, a disparate impact case, while the Supreme Court of the United States considers Township of Mount Holly v. Mt. Holly Gardens Citizens in Action. “In substance, Mount Holly presents the same issue of statutory interpretation that plaintiffs seek to litigate in the above-captioned action: namely, whether a disparate impact theory...

The Consumer Financial Protection Bureau, just weeks after being sued by two targets of its crackdown on the debt relief industry, fired back at one of them, the Morgan Drexen firm, and its CEO, Walter Ledda, for allegedly charging more than 22,000 customers millions of dollars in illegal upfront fees to help resolve outstanding debts. According to the bureau, when consumers sign up for Morgan Drexen’s services, the company presents them with two contracts, one for debt-settlement services, and the other for bankruptcy-related...

Additional mortgage servicing rulemaking and perhaps even enforcement actions from the CFPB might be inevitable, now that the bureau has issued a report detailing a number of mortgage servicing problems at banks and nonbanks. “Our examinations of banks and nonbanks allow us to correct problems before more consumers are affected,” said CFPB Director Richard Cordray. The bureau’s new report, issued last week, “highlights both the mortgage servicing problems throughout the industry and the challenges of making sure that nonbanks are...

With implementation of the CFPB’s ability-to-repay/qualified mortgage rule just a few months away, federal regulators are scheduled to meet in Washington, DC, later this week to discuss – and possibly vote on – a new version of a qualified residential mortgage/ risk retention proposal. The Federal Deposit Insurance Corp.’s board of directors is scheduled to meet in open session at 10 a.m. on Wednesday, Aug. 28, for renewed formal consideration of a QRM/credit risk retention proposal as mandated by the Dodd-Frank Wall Street Reform and...

The CFPB recently released a second update to its exam procedures associated with the new mortgage regulations issued in January 2013, with the intent of providing guidance to financial institutions and mortgage companies on what the bureau will be eyeballing as the rules become effective. The updates cover the ability-to-repay rule and qualified mortgages, high-cost mortgages, and appraisals for higher-priced mortgage loans, as well as new amendments related to the escrow rule. With this latest iteration, the exam procedures now...

Earlier this month, the CFPB put out an updated small entity compliance guide for the ability-to-repay/qualified mortgage rule, incorporating clarifications and amendments to the rules issued on May 29, 2013, and July 10, 2013. The updated guide includes a handful of new sections, one of which goes into some detail about the exemptions that were added by the June 2013 concurrent final rule for certain creditors and loan programs, such as designated community development organizations, certain nonprofit organizations, and...

The CFPB’s ability-to-repay rule and its qualified mortgage standard are getting closer every day, and best practices may provide the surest path to compliance. First off, if you haven’t started, start now. “There’s a lot to do, there’s a lot to know, and there’s a lot to sort out. So, go ahead and get started. It’s already August, and January will be here before we know it,” Ginger Moore, the compliance officer at PrimeLending, a top-25 mortgage originator based in Dallas, TX, told participants during a recent Inside Mortgage...