Another CFPB Official Heads for the Private Sector. CFPB Enforcement Attorney Manuel Alvarez has been hired away by Affirm, a young financial services company based in San Francisco, to be its first chief compliance officer and general counsel. In his new role at Affirm, Alvarez will oversee and manage the company’s regulatory compliance program and related actives to prevent illegal, unfair or deceptive conduct. He will also take charge of the firm’s working relationships with regulators and Affirm’s service providers. “Consumers often don’t understand the fees or interest they pay on a revolving account. That has to change,” said Alvarez. “Affirm’s commitment to delivering honest and transparent financial products totally aligns with my long-standing commitment to consumer protection.” Alvarez was ...

FHA violations were related to lender approval, loan origination and mortgage servicing practices.

A trade group representing non-agency MBS investors continues to raise concerns about settlements that give servicers credit for completing loan modifications on mortgages in non-agency MBS. Regulators and others counter that the settlements include protections for the investors, who ultimately benefit from loan mods completed under the settlements. The latest flare-up involves $4.0 billion in loss mitigation actions required of JPMorgan Chase under a recent settlement with federal and state regulators. Last week, the settlement’s monitor credited Chase with $6.31 million in consumer relief under the settlement, with 56 percent of the relief completed on Chase’s own holdings and the remainder completed on loans serviced for others, likely mortgages in non-agency MBS. The settlement prompted...

A Manhattan federal judge on Wednesday ordered Bank of America to pay a $1.27 billion penalty over mortgage fraud related to Countrywide Financial’s “Hustle” program, a little more than half of what the government had said the bank should pay, while the bank and Department of Justice discuss a potential MBS fraud settlement. Last October, the DOJ and the Securities and Exchange Commission successfully proved in court that Fannie Mae and Freddie Mac lost some $850 million from thousands of loans acquired through Countrywide’s “high-speed swim lane” program – known as HSSL or “Hustle.” The loan program ran...

Close compliance with the mortgage servicing rules promulgated by the Consumer Financial Protection Bureau will continue to be a critical concern for servicers this year. Analysts at DBRS anticipate intensified scrutiny from the CFPB and a higher likelihood of fines and lawsuits from noncompliance and even technical errors. “DBRS believes that the issuance of the mortgage servicing rules has brought much-needed reform to the servicing industry,” the analysts said in a new report. It was...

Has the Federal Housing Finance Agency finally caved on the issue of principal reductions for GSE loans? Not really, but...

Standard & Poor’s said it is working with the Securities and Exchange Commission to address issues raised by the enforcement staff in connection with botched ratings of several commercial MBS transactions in 2011. A spokesperson for S&P said the rating agency and its parent company, McGraw Hill Financial Inc., are cooperating with the SEC after receipt of a “Wells Notice” last week indicating both companies may soon be the target of a regulatory enforcement action. The SEC notice is...

Next week, Nationstar Mortgage reports its second quarter results. If the company misses the targets set by investment bankers, it could be a blood bath…

The Consumer Financial Protection Bureau recently proposed a significant expansion of the loan features lenders would need to report under the Home Mortgage Disclosure Act. The CFPB said the new data will help gauge whether regulations meant to limit originations of “risky mortgage products” have been effective. The federal regulator is seeking new disclosures regarding credit scores, debt-to-income ratios, qualified mortgage status and loan type, among many ...

The risk-retention standard federal regulators are leaning toward establishing isn’t what was intended under the Dodd-Frank Act, according to one of the main authors of the DFA. Barney Frank, a former Democrat congressman from Massachusetts, said aligning the definition for qualified mortgages with the definition for qualified residential mortgages would be a “grave error.” The DFA required federal regulators to establish standards for QRMs ...