An unusual coalition of dozens of lender, realtor, consumer and civil rights groups late last week urged the Consumer Financial Protection Bureau to write a broadly defined “qualified mortgage” as part of the ability-to-repay final rule it’s putting together as per the Dodd-Frank Wall Street Reform and Consumer Protection Act. The CFPB is expected to issue a proposed rule defining a QM shortly. As per the ability-to-repay standards of Dodd-Frank Section 1412, a qualified mortgage cannot have points and fees in excess of 3 percent of the loan amount. The groups are worried...
The Securities and Exchange Commission has charged two officials of Houston-based bank holding company Franklin Bank Corp., with setting up increasingly aggressive loan modification programs during the last six months of 2007 to hide from investors the true amount of the bank’s nonperforming assets and to artificially inflate Franklin’s net income and earnings. According to the SEC, CEO Anthony Nocella and CFO Russell McCann instituted three loan modification schemes that caused Franklin to account for its significantly increasing portfolio of delinquent...
The U.S. Attorney General’s recently released 2011 annual report to Congress on the Equal Credit Opportunity Act Amendments of 1976 provides some useful insight as to what prompts it to litigate referrals from other agencies, as opposed to bumping them back for administrative resolution. Referrals that are most likely to be returned generally share a few characteristics, such as whether the practice at issue had ceased and there is little chance that it will be repeated. Another characteristic is whether the violation may have been accidental or stemmed from ignorance of the...
The Federal Reserve Board recently brought a consent order against Morgan Stanley to deal with what it characterized as a pattern of misconduct and negligence in residential mortgage servicing and foreclosure processing at the Wall Street firm’s Saxon Mortgage Services subsidiary, once the 34th largest mortgage servicer in the United States. “As noted in the announcements relating to the 2011 enforcement actions, the Federal Reserve believes monetary sanctions are appropriate and plans to announce monetary penalties in these cases,” the Fed said. The monetary penalties...
With all the concern thatfs been raised about loan originator compensation since the mortgage marketfs collapse in 2008, and given a certain amount of gget-toughh rhetoric from leadership at the Consumer Financial Protection Bureau, the agency seemed to take a quick-and-dirty approach when issuing its first pronouncement in topic earlier this month. Back in September 2010, the Federal Reserve put out loan originator compensation rules under the Truth in Lending Act and Regulation Z, effective as of April 6, 2011. Then with enactment of the Dodd-Frank Act of 2010...
The mortgage lending industry is apprehensive about the multitude of mortgage servicing rules coming its way, and that anxiety is probably well justified, leading industry representatives suggests. Beyond last year’s consent orders and last month’s $25 billion mortgage servicing settlement and all the ramifications they have for industry servicing practices going forward, the most immediate concern has to do with a proposed rule on mortgage servicing due out this summer from the Consumer Financial Protection Bureau. Last week, the CFPB made a public “pre-announcement” of the...
The Department of Housing and Urban Development has announced discrimination settlements with two mortgage lenders accused of denying FHA mortgage loans to expectant mothers. Two women filed separate complaints against Magna Bank in Nashville, TN, and Home Loan Center in Irvine, CA, alleging a violation of the Fair Housing Act. According to the complaints, the women’s loan applications were rejected because they were pregnant and temporarily on leave. The settlement agreement with Magna Bank requires the bank to pay the complainant $14,085 for allegedly ...
A Department of Housing and Urban Development proposal to reduce the amount of seller contributions on FHA loans on behalf of homebuyers would lock out lower-income purchasers, limit home sales and stall economic recovery, warned FHA lenders. As the proposal’s comment period ended on March 24, emailed comments opposing the proposed rule continued to pour in at HUD. “We are finally seeing an increase in buyers in our market in the entry-level purchase price,” said one loan officer. “I shudder to think of what will happen if this proposal goes through.” The verdict appears to be ...
The $25 billion servicing settlement involving five major bank servicers was approved by the US District Court for the District of Columbia on April 4 without a formal challenge from the Association of Mortgage Investors or anyone else. The servicers and settlement monitor Joseph Smith will agree on deadlines to implement the settlement’s various provisions, with the deadlines to be set between 60 days after approval of the settlement and up to 180 days after approval ... [Includes four briefs]
Mortgage industry participants have mixed views about the FHA’s revised policy on disputed debt despite a general concern over its impact on borrower eligibility and lenders’ bottom lines. This week, the FHA delayed implementation of the policy until July 1 to get more feedback from lenders and industry participants and to work on clarifying guidance. The policy’s initial effective date was April 1. Lenders felt the FHA had bypassed them when the agency decided to announce the policy revision in a Feb. 28 mortgagee letter, along with other FHA underwriting changes. Affected parties should have been able to ...
RSS