Six federal financial regulatory agencies have put out a proposal to establish new appraisal requirements for mortgage loans deemed to be higher risk. The Dodd-Frank Act generally defines a “higher-risk mortgage” as a closed-end consumer credit transaction secured by a principal dwelling with an annual percentage rate exceeding certain statutory thresholds (1.5 percent for first-lien loans, 2.5 percent for first-lien jumbo loans, and 3.5 percent for subordinate-lien loans). “Qualified mortgages” will be exempt from this...

It looks like the Consumer Financial Protection Bureau is going into stealth mode to try to find lender violations of various consumer protection laws. A job opening at the CFPB that was posted on a Treasury Department jobs listing suggests the bureau plans on using a mystery shopper or perhaps something a little more ominous, all in the name of consumer protection. According to the ad, the CFPB is looking for an investigator who “will work under the direction of enforcement attorneys to plan, organize, and conduct a wide...

The new amicus brief filing policy publicly articulated by the Consumer Financial Protection Bureau in recent weeks has some industry legal representatives concerned. The CFPB’s proactive approach in this regard is dramatically different to the approach taken by the Federal Reserve Board when it was charged with implementing federal consumer financial protection statutes such as the Truth in Lending Act, according to Barbara Mishkin, of counsel in the consumer financial services practice group at the Ballard...

The Consumer Financial Protection Bureau initiated a pair of potentially significant enforcement actions in recent weeks, but the agency has yet to really reveal any noteworthy part of its strategic playbook under its “unfair, deceptive and abusive acts and practices” authority as per the Dodd-Frank Act. One of the take-aways from these cases is that “the CFPB did not rely on its UDAAP authority to provide any look into what they may consider abusive,” said Donald Lampe, partner and head of the financial services regulatory...

Last week, the Consumer Financial Protection Bureau issued a proposed rule in the Federal Register that would amend Regulation Z and Regulation X to implement the Dodd-Frank Act’s amendments to the Truth in Lending Act and the Real Estate Settlement Procedures Act, respectively. Specifically, the bureau is proposing to amend Reg Z to implement the Dodd-Frank amendments that would expand the Home Ownership and Equity Protection Act to apply to more types of mortgage transactions. Under the proposed rule...

All nonbank residential mortgage lenders and originators now must be in compliance with the Financial Crime Enforcement Network’s final rule requiring the establishment of anti-money laundering programs and the filing of suspicious activity reports. On Feb. 14, 2012, FinCEN published in the Federal Register its final rule on anti- money laundering program and suspicious activity report filing requirements for residential mortgage lenders and originators. The effective date of this rule was April 16, 2012, and the...

The Conference of State Bank Supervisors has begun making available public state regulatory actions on the Nationwide Mortgage Licensing System Consumer Access online portal. In addition, NMLS Consumer Access now directly connects the public to state agencies for the purpose of submitting a consumer complaint on a state-licensed company or individual loan officer. This latest upgrade consolidates enforcement actions taken by state regulatory agencies against state-licensed companies and individuals in a single repository...

Consumer Financial Protection Bureau. Agency Creating Interactive Regulatory Forum. The Consumer Financial Protection Bureau is working with the Cornell University e-Rulemaking Initiative (CeRI) to make it easier for the public to comment on mortgage servicing proposed rules through a pilot project called Regulation Room (www.regulationroom.org). “Regulation Room provides an online environment for people and groups to learn about, discuss and react to selected rules proposed by federal agencies,”...

Lenders Compliance Group Inc., a mortgage risk management firm for mortgage lenders, has formally launched the Brokers Compliance Group, a full-service, mortgage risk management firm in the U.S., specializing in outsourced mortgage compliance and offering a full suite of services to residential mortgage brokers. “Together, Lenders Compliance Group and Brokers Compliance Group will build on existing tools, processes, experts, risk assessments, and resources to provide a ‘best practices’ approach to residential mortgage compliance,”...

The Federal Housing Finance Agency became the biggest opponent of proposals for local governments to use eminent domain to seize underwater loans from non-agency mortgage-backed securities. “FHFA has determined that action may be necessary on its part to avoid a risk to safe and sound operations at its regulated entities and to avoid taxpayer expense,” the conservator of the government-sponsored enterprises said in response to the proposed use of eminent domain to forgive principal on mortgages ...