Normally during this time of year, the mergers and acquisitions game is somewhat quiet in the mortgage industry, but concerns over compliance with the CFPB’s integrated disclosure rule known as TRID are sparking some lenders to consider selling and getting out. That’s the opinion of Chuck Klein, managing partner of Mortgage Banking Solutions, who said, “I’m as busy as I’ve ever been this time of year.” Speaking on the Internet radio program “Lykken on Lending” recently, the M&A advisor noted that mortgage company owners are “disturbed about the cost and risk of noncompliance.” He added that the TRID rule promulgated by the CFPB “has gotten everyone’s attention,” in particular, owners of nonbanks who have all their personal net worth tied ...

Remember the Dec. 29, 2015, “clarifying letter” that CFPB Director Richard Cordray sent to the Mortgage Bankers Association? Initially, the letter relieved industry anxiety regarding TRID errors, at least to some degree. But over the past few weeks, certain lenders have once again grown nervous and are reporting resistance by secondary market investors that are turning down their mortgages because of TRID errors. For loan buyers, the issue is assignee liability. The MBA is believed to be a key player trying to persuade the bureau to publish the letter in the Federal Register. An industry lobbyist noted that one week after the clarifying letter came to light, MBA “applied immediate pressure to get the letter into Register form. The CFPB ...

Last month’s issuance by the CFPB of a request for information (RFI) regarding its Home Mortgage Disclosure Act resubmission guidelines likely reflects the bureau’s recognition of the additional workload the pending new rule represents, as well as a willingness to hear what the industry has to say about it.In October 2015, the bureau finalized its rule updating the reporting requirements under its HMDA rule, which will significantly expand the amount of information lenders will submit to the agency. “Given these changes, the current resubmission guidelines may need to be updated, and the bureau is seeking feedback on what modifications may be appropriate,” the agency said in early January. But in a recent online blog post, Brooks Bossong, a member ...

A complaint has recently been filed in U.S. District Court for the Central District of California in an attempt to initiate a class-action case against PHH Corp. and Realogy Holdings Corp. and some of their subsidiaries and affiliates for allegedly deceptive and collusive practices in violation of the Real Estate Settlement Procedures Act. The case references and appears to be inspired, at least in part, by the enforcement action the CFPB brought against PHH in 2014 in which the bureau alleged the lender violated RESPA by illegally referring borrowers to mortgage insurance companies in exchange for kickbacks. In that case, PHH Corp. v. CFPB, the U.S. Court of Appeals for the District of Columbia is set to hear oral arguments on ...

The Republican-controlled House Financial Services Committee last week used the consideration of fiscal year 2017 budget views and estimates (BVE) as an opportunity to take another shot at the CFPB. The minority Democrats tried to amend the GOP package but were shut down on a party-line basis. According to the Republicans’ “print” of the FY17 BVE, the majority’s view is that although the Dodd-Frank Act established the CFPB within the Federal Reserve System, it assigns no role to Congress or the Federal Reserve in overseeing its budget or use of funds. “The effect of the CFPB’s unorthodox budgetary treatment is that every dollar it draws directly reduces the Federal Reserve System’s annual remittances to the Treasury, thus lowering the amount ...

The Mortgage Bankers Association last week wrote the CFPB and other government regulators and agencies to warn that a rule adopted by the Federal Communications Commission last year could harm mortgage servicers when they try to provide early intervention with homeowners who are delinquent on their mortgages. The FCC’s order aims to bolster consumer protections against unwanted telephone calls and texts by, in part, restricting the ability of mortgage servicers, debt collectors and others to make autodialed or prerecorded phone calls without prior express consent of the person called. Violators can be subject to fines of $500 per phone call. But according to the MBA, the rule “threatens to expose mortgage servicers to significant and possibly unavoidable liability when they ...

Last week, Toyota Motor Credit Corp. reached a $21.9 million deal with the CFPB and Department of Justice to settle allegations that the auto lender charged African-American, Asian and Pacific Islander borrowers higher interest rates than white borrowers for their auto loans, without regard to their creditworthiness. In addition to the pay-out to affected minority borrowers, TMCC agreed to change its pricing and compensation system to substantially reduce dealer discretion and accompanying financial incentives to mark up interest rates.As the bureau explained it, TMCC, as an indirect auto lender, sets interest rates, or “buy rates,” for consumers based on credit scores and other risk criteria. Those rates are then conveyed to auto dealers. Auto dealers are then allowed to charge a higher interest rate when they ...

A recently concluded audit by the CFPB Office of Inspector General found the bureau could better manage the use of its space in the future by collecting more information, according to a new report from the OIG. “We identified controls that the [CFPB’s] Office of Administrative Operations is using to plan for CFPB headquarters office space,” the OIG began. “Because the CFPB determined it does not have leasing authority, the OAO plans to continue to use the U.S. General Services Administration for its future space procurement needs.” Further, “To provide the CFPB with office space that meets its needs, GSA collects information to understand the CFPB’s space requirements,” it added. “Therefore, the CFPB could benefit from implementing a process for ...

The growing level of student loan debt notwithstanding, the number of complaints about student loans filed by consumers to the CFPB fell by double digits during the fourth quarter of 2015, according to an analysis by Inside the CFPB of information in the CFPB’s consumer complaint database. Overall gripes fell by 31.7 percent from the third quarter to the fourth, the analysis found. The biggest player in this regard, the Sallie Mae spinoff Navient, saw criticisms fall 29.3 percent during the period, as well as by 13.8 percent year over year. This is particularly significant, given the company’s size and market dominance.On a year-over-year basis, overall kvetching rose a modest 2.7 percent, the data show. However, as the chart [with exclusive data chart]...

Will TRID Errors Crimp Earnings? Market observers have been hearing reports that TRID errors and closing delays definitely will be affecting first quarter 2016 earnings, at least for certain nonbanks. The big test for nonbank mortgage stocks is expected to come later this month when PHH Corp., the parent of PHH Mortgage, the nation’s ninth largest servicer, reports 4Q15 results. PHH, which is battling the CFPB over RESPA issues, also has been smacked around by servicing write-downs. It likely got some relief on that score in 4Q15. Stay tuned... CFPB Tries to Clear the TRID Air on Construction Loans. Not only has the CFPB’s TRID rule delayed closings in the conventional market, but it’s being reported that the regulation has ...