Most of the participants in the housing finance industry think they are being hobbled by over-regulation, and the chief culprit is the CFPB, according to a new survey from The Collingwood Group, a consultancy in Washington, DC. Among the mortgage industry professionals surveyed, 72 percent named regulation as the top issue that is negatively affecting their origination volume. “CFPB regulation, in particular, was the most common cited source of negative influence,” Collingwood said. “Survey respondents complained that while the CFPB is generating new regulations that are designed to protect the consumer, the costs to comply with new rules result in higher rates and fees for borrowers,” according to the survey. “In many cases, well-intended regulations end up being more harmful ...

The CFPB last week brought a $13 million enforcement action against two employment background screening report providers, General Information Services and its affiliate, e-Background-checks.com, Inc. It accused the firms of violating the Fair Credit Reporting Act by failing to take basic steps to ensure the information reported about job applicants was accurate. The CFPB said it found that the companies unlawfully included certain information in consumer reports they provided to prospective employers. “Specifically, the CFPB found that GIS and BCG failed to take measures to prevent non-reportable civil suit and civil judgment information older than seven years from being illegally included in its reports,” the bureau said. The bureau ordered the companies to alter the practices at issue, provide $10.5 million ...

Last week, the CFPB filed suit in U.S. District Court for the Southern District of California against Global Financial Support, Inc., and Armond Aria, owner and CEO, to stop what the bureau characterized as a nationwide student financial aid scam. The company, which has operated as Student Financial Resource Center and College Financial Advisory, allegedly ripped off tens of thousands of students and families by illegally charging millions of dollars in fees for sham financial services. The CFPB alleges that Aria and his businesses operate under the guise of a government- or university-affiliated operation, exploiting consumer uncertainty about how to use free federal financial aid resources provided by the Department of Education. The defendants allegedly “sent millions of deceptive letters ...

The CFPB filed a $3.3 million administrative order last week against Security National Automotive Acceptance Company, a Mason, OH-based auto lender that specializes in making loans to U.S. military personnel, accusing it of engaging in illegal debt collection practices. The order requires the company to refund or credit approximately $2.28 million to service members and other consumers who were allegedly harmed, and to pay a $1 million penalty. When the CFPB sued SNAAC in June, it alleged the company used aggressive collection tactics that took advantage of U.S. service members’ special obligations to remain current on debts. “Once service members defaulted, they became subject to repeated threats to contact their chain of command,” said the CFPB. “In many other instances, ...

Five months after Corinthian Colleges went belly up, the CFPB succeeded in convincing a federal court to enter a final default judgement against the company, bringing to an end the litigation the bureau filed back in September 2014. The bureau accused Corinthian of luring tens of thousands of students into taking out private loans to cover expensive tuition costs by advertising bogus job prospects and career services. “Corinthian then used illegal debt collection tactics to strong-arm students into paying back those loans while still in school,” the CFPB stated. In its final judgment, the court ordered that Corinthian was liable for more than $530 million and prohibited the company from engaging in future misconduct. However, since the company’s assets are ...

CFPB Retracts Cordray’s Claim About Most Jumbo Mortgages Being Non-QMs. Questions from Inside Nonconforming Markets, an affiliated newsletter, compelled the CFPB to concede that Director Richard Cordray misspoke during a speech at the Mortgage Bankers Association’s recent annual convention in San Diego. In asserting that the CFPB’s ability-to-repay rule hasn’t caused a significant reduction in mortgage originations, Cordray referenced jumbo loans, “most of which are non-QM loans,” he said. “While comprehensive data on the non-QM share of jumbo mortgages are not available, a number of data sources suggest that most jumbos are in fact QMs, not non-QMs,” Inside Nonconforming Markets went on to note. Three of the five largest jumbo lenders told the newsletter most of their jumbos are QMs, ...

There is one GSE issue that Democrats and Republicans see eye-to-eye on: capping the pay of CEOs working for Fannie Mae and Freddie Mac.

The Highway Trust Fund reauthorization includes language that would raise GSE guaranty fees in five years.

In late December, issuers of new non-agency MBS will become subject to new risk-retention requirements. It’s not clear whether anyone will notice. The vast majority of loans securitized in jumbo MBS over the past few years meet the qualified-mortgage standard. And because federal regulators opted to synchronize the QM standard with the separate qualified residential-mortgage standard, jumbo MBS backed entirely by QMs will be exempt from the 5 percent risk-retention requirement. When the final rule came out, Redwood Trust backed...

Banks and nonbanks, in general, are doing a better job of servicing “challenged” mortgages and MBS these days, according to a new report from Fitch Ratings. However, concerns remain. Fitch noted that residential servicing costs “continue to rise in concert with increased compliance focus and enhanced regulatory scrutiny.” Moreover, “Higher regulatory capital requirements may become a factor too, especially for smaller servicers.” Over the past two years, Fannie Mae, Freddie Mac and Ginnie Mae have all ushered...