Based on plunging consumer gripes sent to the CFPB, the mortgage market looks like it’s in great shape – with one glaring exception: mortgage servicing. According to a new analysis by Inside the CFPB of second quarter data from the bureau’s consumer complaint database, mortgage servicing saw a 17.5 percent jump in borrower grousing during the second quarter, but a milder 1.4 percent uptick from the first half of 2016. That latter level would be barely perceptible were it not in such stark contrast to the double-digit drop-offs seen in all other mortgage-related areas tracked by this publication. For instance, kvetching about loan modifications plummeted 81.5 percent from the first quarter of this year to the second, and [With exclusive data charts]...
The American Bankers Association and banking associations from each of the 50 states and Puerto Rico last week called upon the CFPB to delay the new Home Mortgage Disclosure Act data collection and reporting requirements, which are scheduled to kick in Jan. 1, 2018. “We appreciate the bureau’s efforts to help lenders comply with the new reporting requirements,” the trade groups began. “Nonetheless, banks of all sizes are gravely concerned that they will not be able to assure proper compliance by the January timeframe.” For one thing, the new HMDA rules are inherently complex and very expensive to implement, according to the ABA and its affiliates. Also, they are incomplete. “Recently proposed adjustments to the rule are complicating compliance efforts...
Walter, the parent of Ditech Financial, said it expects to “acknowledge receipt” of the compliance violation and “notify the NYSE of its intention to seek to cure the deficiency…”
The CFPB has finally issued its long-awaited final rule banning mandatory arbitration in consumer financial contracts. For starters, the final rule prohibits “covered providers of certain consumer financial products and services from using an agreement with a consumer that provides for arbitration of any future dispute between the parties to bar the consumer from filing or participating in a class action concerning the covered consumer financial product or service.” Further, the final rule requires “covered providers that are involved in an arbitration [proceeding] pursuant to a pre-dispute arbitration agreement to submit specified arbitral records to the bureau and also to submit specified court records.” The new rule applies to the major markets for consumer financial products and services overseen by...
In the second largest settlement so far involving Federal Housing Finance Agency-initiated lawsuits from 2011, the FHFA and the Royal Bank of Scotland this week reached a settlement for $5.5 billion.This represents near closure for charges filed against 18 issuers and underwriters alleging securities law violations and fraud regarding non-agency mortgage-backed securities sold to the GSEs. Under the terms of the settlement in FHFA v. The Royal Bank of Scotland Group plc et al., Freddie Mac will get approximately $4.525 billion and Fannie Mae will get about $975 million. The court cases date back to 2011 and involve senior classes of subprime and Alt A MBS Fannie and Freddie purchased from RBS between 2005 and 2007.
GSE shareholders are continuing to argue that the structure of the Federal Housing Finance Agency is unconstitutional. The topic has come up ever since a 2016 ruling found that the similarly structured Consumer Financial Protection Bureau is not constitutional. Two new cases filed within the past month in Michigan and Minnesota are asking the courts to vacate the Treasury sweep of GSE profits altogether. In late June, three GSE shareholders filed a fresh lawsuit in the U.S. District Court for the District of Minnesota. The three plaintiffs, Atif Bhatti, Tyler Whitney and Michael Carmody, also want the court to strike the...
NV Supreme Court Favors GSEs in HOA Litigation. In Nationstar Mortgage, LLC v. SFR Investments Pool, the court found that mortgage servicers have standing to assert, on behalf of the GSE investor, that the Housing and Economic Recovery Act preempts state law and prevents extinguishment of the GSE loan at a Homeowners Association foreclosure sale. Freddie Prices $1.1 Billion Multifamily K-Deal. This week, Freddie Mac announced that it recently priced a new offering of Structured Pass-Through Certificates (K Certificates). The company expects to issue approximately $1.1 billion in K Certificates, which are expected to settle on or about July 24, 2017. Fannie Updates DU with New HomeReady Income Limits. As of July...
Wells Fargo’s recent maneuver to hold back funds on vintage non-agency MBS subject to clean-up calls could have broader implications for the market, according to industry analysts. Other trustees appear likely to follow the lead set by Wells, which could limit clean-up calls by servicers. In June, Wells withheld $94.3 million in funds from investors in 20 non-agency MBS that were subject to clean-up calls by New Residential Investment. The deals in question are the subject of a lawsuit involving MBS investors alleging that Wells failed to perform its duties as trustee. Wells disputed the charges and withheld the funds to cover potential litigation costs. Analysts at Bank of America Merrill Lynch said...
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