The presidential campaign of Democrat Hillary Clinton issued a fact sheet indicating that the candidate supports allowing small institutions to enjoy the qualified mortgage safe harbor for portfolio loans. “Before the crisis, Wall Street promoted dangerous mortgage products, even when they knew borrowers might get into trouble, harming countless communities in the process,” said the fact sheet. “But when community banks and credit unions offer mortgages, they’re looking to invest in their neighborhoods and communities to help them grow and prosper. “Clinton supports a proposal put forward by Senate Democrats to expand the safe harbor for QM liability protection to include all mortgages made by community banks and credit unions with under $10 billion in assets – so long as the ...

Laurie Maggiano, servicing and secondary markets program manager at the CFPB, appeared at a recent forum on housing finance sponsored by the Urban Institute and CoreLogic and highlighted the most significant changes the bureau has made to its 2013 mortgage servicing rules. She began with requests for clarification that servicers themselves made of the CFPB. “There are clarifications that servicers can indeed enter into short-term repayment plans without collecting a complete application document for consumers,” Maggiano said. Also, there is now more flexibility for servicers to stop collecting documents for a particular loss mitigation option when it is evident the borrower is not a candidate for the option.Additionally, the bureau provides clarification on how servicers select a reasonable deadline ...

The CFPB’s final amendments to its 2013 mortgage servicing regulations will enhance the industry’s practices and benefit the non-agency residential mortgage-backed securities market, according to analysts with Moody’s Investors Service. On the other hand, costs are going to go up, and the brunt of that burden will be borne by smaller servicers. “The new CFPB rules set forth multiple timeline requirements, compliance to which will require servicers to implement several system changes,” the analysts said in a new report. “Such changes will likely result in increased automation of servicing processes that will improve overall efficiencies.” However, implementation costs are going to go up because servicers will have to update their technology and adjust staffing levels to meet the new requirements...

The CFPB recently brought a $32.25 million enforcement action against First National Bank of Omaha, alleging deceptive marketing and illegal billing of add-on credit card products that it claimed harmed hundreds of thousands of borrowers. According to the CFPB, from 2002 until at least 2012, First National Bank of Omaha offered add-on debt cancellation products with its credit card, including products dubbed “Secure Credit” and “Payment Protection.” The bureau said the bank promoted these products as providing a monthly payment to the cardholder’s account in the event of certain hardships, such as involuntary unemployment, hospitalization or disability. Cardholders were charged a monthly fee for the products. First National Bank of Omaha also offered credit monitoring products, including “Privacy Guard” and ...

The CFPB recently brought a $4 million enforcement action against Wells Fargo, alleging the bank engaged in illegal private student loan servicing practices that increased costs and unfairly penalized certain student loan borrowers. “Wells Fargo hit borrowers with illegal fees and deprived others of critical information needed to effectively manage their student loan accounts,” said CFPB Director Richard Cordray. The bureau said it identified breakdowns throughout Wells Fargo’s servicing process, such as failing to provide important payment information to consumers, charging consumers illegal fees, and failing to update inaccurate credit report information. One of the CFPB’s charges against the company was that it processed payments in a way that maximized fees for many consumers. “Specifically, if a borrower made a ...

The American Bankers Association, the Consumer Bankers Association and The Financial Services Roundtable told the CFPB its controversial arbitration proposed rule “is not in the public interest, is not for the protection of consumers, and is not consistent with the CFPB’s March 2015 empirical study of arbitration,” as their attorneys at Ballard Spahr succinctly summarized their joint comment letter. Further, the groups urged the bureau to withdraw its proposal and to refrain from re-issuing another unless it is consistent with the statutory requirements of Section 1028 of the Dodd-Frank Act. “First, the proposed rule is not ‘in the public interest,’ nor does it meet the requirement to provide for consumer protection, because it would inflict serious financial harm on consumers ...

CFPB Proposes Changes to FOIA Procedures, Treatment of Information; Would Expand Disclosure of Confidential Supervisory Information to State AGs. The CFPB has proposed amendments to the procedures used by the public to obtain information from the bureau under the Freedom of Information Act, the Privacy Act of 1974, and in legal proceedings.... Bank of America Close to Fulfilling Settlement Obligations. Bank of America has conditionally fulfilled more than 91 percent of its obligation to provide $7 billion worth of consumer relief under the terms of its historic mortgage settlement agreement with the U.S. Department of Justice and six states, according to Eric Green, the independent monitor of the agreement...

Although the new requirements could prompt an increase in costs, analysts said a new requirement aimed at increasing the number of times troubled borrowers are evaluated for loss mitigation will be particularly helpful in certain states…

HUD has been criticized by consumer advocates who feel the agency's NPL auctions have unfairly benefitted private equity firms and hedge funds at the expense of troubled borrowers.

A proposed rule published by the Federal Deposit Insurance Corp. earlier in the year regarding recordkeeping requirements would “unnecessarily increase costs for banks and servicers,” according to George Green, an associate vice president at the Mortgage Bankers Association. The proposed rule would apply to depositories with more than two million deposit accounts. Under the regulation, banks would generally be required to maintain complete and ...