The CFPB has a handful of significant managerial hurdles to overcome that threaten to hamper the bureau’s accomplishment of its strategic objectives, according to a new report from the agency’s Office of Inspector General. The first major challenge is improving the operational efficiency of its supervisory program for depository and non-depository institutions. The OIG started by saying the bureau has made significant progress towards developing and implementing its program in this regard. Still, more can be done. The OIG said the bureau’s management will focus on this as the agency works to “clear a considerable number of draft examination reports that have yet to be issued, improve its reporting timeliness, ensure the timely recording of data in its tracking system, ...
Total mortgage-related complaints filed by borrowers with the CFPB dropped again in the third quarter of 2014, the fifth drop in the last six quarters, according to a new analysis by Inside the CFPB. Data contained in the CFPB’s consumer complaint database show that such consumer gripes fell 17.6 percent in the third quarter of the year, and were down 23.6 percent from the same period in 2013. Total mortgage complaints have been trending downward since they peaked at 15,239 in the first quarter of 2013. Third quarter 2014 grumblings came to 8,995. A closer inspection of the data reveals that consumer gripes about their home loans are down across the board [With two exclusive data charts] ...
Numerous mortgage banking trade groups from across the U.S. urged the Conference of State Bank Supervisors to hold off on making changes to the Nationwide Mortgage Licensing System mortgage call report (MCR) until after the CFPB’s Home Mortgage Disclosure Act rulemaking is final and the bureau’s integrated disclosures have been implemented. The MCR proposal, released Oct. 1, 2014, would expand the current data collected to create a new definition of “application,” and it would require reporting on the amount and count of closed loans classified as qualified mortgages under the CFPB’s ability-to-repay rule.Further, the proposal would require additional nationwide and state-specific servicing reporting, along with additional fields to capture changes in loan amount between the time of application and ...
There are a host of legal land mines that mortgage lenders must avoid if they want to keep from becoming the target of a CFPB enforcement action under its unfair, deceptive or abusive acts or practices (UDAAP) authority, according to top legal experts. Andrea Mitchell, a partner with the BuckleySandler law firm, told attendees at an Inside Mortgage Finance webinar last week that there are a number of representations lenders should stay away from in their marketing pitches. “Say what you mean and mean what you say,” Mitchell said. She then rattled off a list of potentially problematic terms to avoid, such as “free” or “no cost,” “best rates available,” “fastest” or “faster than…,” “improve/repair your credit” or “eliminate your ...
Last month, the long-running dispute between the CFPB and Morgan Drexen, a debt settlement firm, took another turn – this time with the bureau filing a motion for summary judgment in which it seeks an injunction permanently barring the firm and its owner and CEO, Walter Ledda, from providing debt relief services in the future. The bureau also is pushing for $90.7 million from the defendants in restitution, as well as a civil money penalty in an unspecified amount. The CFPB said it brought this action to stop a nationwide debt settlement “scheme that preys on financially distressed consumers who are in debt.”Defendants Morgan Drexen and Ledda and the attorneys with whom they are affiliated promise consumers that they will ...
Castle & Cooke Mortgage late last month filed a motion to dismiss a putative class-action brought by one of the aggrieved parties who had already been compensated under the terms of the settlement the lender reached late last year with the CFPB. In Luis Cabrales v. Castle & Cooke Mortgage LLC, plaintiff Luis Cabrales contends that the lender improperly compensated its loan officers by giving them bonuses for putting customers in more expensive loans than what they qualified for. The plaintiff sued for violation of the Truth in Lending Act – a claim that Castle & Cooke is not challenging at this point. However, Cabrales also brought other causes of action: violation of Section 8 of the Real Estate Settlement Practices ...
Disparate Impact Theory of Legal Liability Struck Down. Last week, the U.S. District Court for the District of Columbia dealt a heavy blow to the position of the Department of Housing and Urban Development – as well as the CFPB – that disparate impact claims are cognizable under the Fair Housing Act. In American Insurance Association v. U.S. Department of Housing and Urban Development, the judge struck down HUD’s disparate impact rule, determining that the Fair Housing Act prohibits “disparate treatment only.” In promulgating its disparate impact rule, the court said HUD exceeded its authority under the Administrative Procedures Act. “The ruling is in line with what we have long believed the law to be and consistent with what we argued in ...
Jaron Van Maanen of the FDIC said the lender should determine if the factor determining the LO’s comp consistently varies with terms over a significant number of transactions...
Bank of New York Mellon is looking to increase its master servicing activity on residential mortgages, according to officials at the firm that acquired the master servicing unit from JPMorgan Chase in October 2006. However, BNYM is up against stiff competition, including Wells Fargo, a dominant presence in master servicing for non-agency MBS. BNYM is focusing on growth opportunities from managing new funds in traditional residential mortgages as well as new loan types, according to a recent report by Fitch Ratings. In September, Fitch downgraded BNYM’s master servicer rating due to compliance issues, organizational changes and low activity in recent years. The firm has...
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