The CFPB’s ability-to-repay rule will likely be revised if Congress fails to enact legislation to reform the government-sponsored enterprises by the time the rule’s Fannie Mae/Freddie Mac “patch” expires in six years. Appearing before the House Financial Services Committee last week, CFPB Director Richard Cordray and committee chairman Jeb Hensarling, R-TX, went back and forth over the accuracy of a study the Federal Reserve did a few years ago about the potential impact the ATR rule could have on the market, specifically in terms of limiting borrower access to credit. Cordray said he disagreed with the findings of the report, asserting that the Fed’s study was based on provisions that were substantially different than what were ultimately adopted. Hensarling then ...

Many people in the mortgage industry remain bent out of shape over the CFPB’s controversial online rate-checker tool, and some of the pent up frustration was on display during a hearing last week of the House Financial Services Committee. Rep. Stephen Fincher, R-TN, asked CFPB Director Richard Cordray, “This mortgage rate checker is something that is really muddying the waters. Why did the bureau post an incomplete and imprecise rate checker to help consumers when it’s not accurate? Where are you getting that information, and why did you do it prematurely?” Cordray replied, “It actually is quite accurate and it’s up-to-date, daily information.” He then cited the bureau’s concern that prompted the development of the rate-checker. “What we found is ...

One of the common elements in the CFPB’s growing regulatory interest over prepaid cards and payday lending is the challenge the bureau faces in balancing strong consumer protections from excessive fees or high interest rates, on the one hand, and maintaining consumer access to such products, on the other.During a hearing last week before the House Financial Services Committee, CFPB Director Richard Cordray felt political pressure to strike the perfect balance in both lending sectors. Ranking Member Maxine Waters, D-CA, came out strongly in favor of cracking down on lenders that service the payday market, otherwise referred to as small-dollar lending. “Do you think there is any way we can bring payday lending under control anytime soon?” she asked ...

This is the first in a series on industry efforts to prepare for compliance with the CFPB’s integrated disclosure rule under the Truth in Lending Act and the Real Estate Settlement Procedures Act.According to Scott Stucky, chief strategy officer at DocuTech, mortgage lenders need to engage TRID preparation on multiple levels. “They’ve obviously got to be ready from a technology perspective, so working with their origination system and document solution provider, they should be in the testing phase at this point in time,” he told Inside the CFPB recently. “Even if it’s rudimentary testing, even if it’s just very basic and they can’t get everything completely together, they should be doing some basic evaluation,” he added. “That’s because, in ...

More than two years after the CFPB first released its loan originator compensation rule, plenty of unanswered questions and ambiguity remain for lenders struggling to maximize their compliance. Meanwhile, the implementation date of CFPB’s integrated disclosure rule looms at the beginning of August, threatening to compound the complexity of the situation. During a recent webinar sponsored by Inside Mortgage Finance, an affiliated newsletter, lender representatives were anxious to resolve a host of concerns and uncertainties. One webinar participant had some questions about borrower-paid compensation to the loan broker. “To what extent can the applicant and the broker negotiate the compensation, and at what point is that compensation set, such that the broker can no longer concede any of it back ...

Three out of the top four targets of consumer complaints to the CFPB about their debt collection practices saw their numbers go down both quarter over quarter and year over year, according to a new analysis by Inside the CFPB. Encore Capital Group, the largest of the top four, in terms of number of consumer gripes, saw its tallies drop 31.1 percent from the third quarter of 2014 to the fourth, and 28.0 percent from year-ago levels, the latest numbers from the CFPB’s consumer complaint database show. Second-ranked Portfolio Recovery Associates was the only one of the four largest firms hit by criticisms to bounce down in one period (9.4 percent QoQ) yet rise in another (30.7 percent YoY)... [with exclusive data chart]...

Issuers of open-end credit cards would get a one-year break from the Truth in Lending Act/Regulation Z requirement to forward their credit card agreements to the CFPB on a quarterly basis for posting in a public database on the agency’s website, under a proposed rule the bureau issued recently. The proposal would temporarily suspend card issuers’ obligations to submit agreements to the bureau for a period of one year (i.e., four quarterly submissions), in order to reduce burden while the bureau works to develop a more streamlined and automated electronic submission system. Other requirements, including card issuers’ obligations to post currently offered agreements on their own websites, would be unchanged under the proposal. “The bureau recognizes that its proposed temporary ...

The CFPB can do a better job when it comes to diversity and inclusion, according to a new report issued by the bureau’s Office of Inspector General. The CFPB has taken steps to foster a diverse and inclusive workforce since it began operations in July 2011, the OIG began. But it identified four areas of the bureau’s diversity and inclusion efforts that can be enhanced. “First, diversity and inclusion training is not mandatory for CFPB employees, supervisors and senior managers,” the office said. Second, data quality issues exist in the CFPB’s tracking spreadsheets for Equal Employment Opportunity complaints and negotiated grievances, the report said, and certain data related to performance management are not analyzed for trends that could indicate potential ...

Walter Reports a $44 Million Loss, Cites a Pending Settlement with the CFPB. Walter Investment Management Corp., which owns the nation’s eighth-largest residential servicer, reported a $44 million loss for the fourth quarter, citing – among other things – a pending settlement with the CFPB and the Federal Trade Commission. “We have agreed to a proposed stipulated order with the FTC and CFPB, which is subject to approval by the FTC, CFPB and the court, and expect the settlement approval process may take a month or two,” the company noted in its fourth quarter 2014 earnings release. “We believe the proposed settlement is in the best interest of our business and all stakeholders.” This past October, Walter disclosed in a regulatory filing ...

FHA launched into the new year with a slight dip in forward mortgage loan originations in January from December with nonbanks leading the charge, according to Inside FHA Lending’s analysis of agency data. Lenders originated $11.8 billion in FHA-insured loans in January, a 0.7 percent decrease from December and down 3.5 percent from the prior year. FHA was charging a higher annual mortgage insurance premium of 1.35 percent for most of the month until a 50 basis point reduction, effective Jan. 26, lowered the MIP to 0.85 percent for a 30-year, fixed-rate mortgage with a five percent downpayment, and down to 0.80 percent for a similar FHA loan with more than five percent downpayment. The impact of the reduced MIP on February originations is still unclear, but most FHA lenders are expecting a boost in volume because many consumers ... [1 chart]