Bankers Keep up the Push for CFPB-Related Legislation. The American Bankers Association is making a member push to drum up on Capitol Hill for three pieces of legislation designed to ease the regulatory burden for bankers, H.R. 2673, H.R. 4521 and H.R. 4466. H.R. 2673, the Portfolio Lending and Mortgage Access Act, would treat as a qualified mortgage any residential mortgage loan made by a creditor so long as it is held in portfolio. H.R. 4521, the Community Institution Mortgage Relief Act of 2014, would expand the CFPB’s small servicers exception to include servicers of 20,000 mortgage loans or less, and would revise the small creditor exemption to include loans that are held by creditors with assets of $10 billion ...

The Treasury Department issued a wide-ranging request for comments last week as part of an effort to increase issuance of non-agency mortgage-backed securities. Treasury officials said they are working toward developing standards and practices for the non-agency MBS market. “The private-label securities market has been dormant since the financial crisis,” said Treasury Secretary Jacob Lew. “The fact is, we need to attract more private capital to the housing market ...

Officials with the Conference of State Bank Supervisors suggest that state regulators are likely to set capital requirements for nonbank servicers due to concerns about how a failure of a nonbank would impact borrowers. “People have to feel confident that their mortgage check is going where it’s supposed to go, when it’s supposed to get there,” Chuck Cross, a senior vice president for consumer protection at the CSBS, said last week during a webinar hosted by Inside Mortgage Finance Publications ...

Among the myriad of servicing concerns raised by the New York Department of Financial Services in recent months are the relationships between nonbank special servicers and their affiliates. Industry lawyers suggest that few laws specifically address the issue, though the area could see increased regulation and enforcement. In April, Ben Lawsky, superintendent of the NYDFS, expanded his probe of Ocwen Financial to include sales of real estate owned properties ...

Any respite the mortgage industry had from enforcement actions under the Real Estate Settlement Procedures Act is over. If there’s one overarching theme about the Consumer Financial Protection Bureau’s vigorous RESPA activity of late, it’s that the basics still count when it comes to compliance, even as the bureau pushes the theoretical envelope in some instances, top industry attorneys say. “RESPA Section 8 enforcement is back. It was in abeyance during the transition of RESPA enforcement from the Department of Housing and Urban Development to the CFPB over the last few years,” said attorney Angela Kleine, an associate in the San Francisco office of the Morrison & Foerster law firm. “But the CFPB is picking up where HUD left off, and then some.” Kleine said...

Loss mitigation activity continued to decline in the first quarter of 2014, driven by better loan performance. That didn’t stop the Treasury Department from extending the Home Affordable Modification Program and related loss mitigation programs for at least another year, through the end of 2016. A total of 132,783 loan modifications were completed in the first quarter, according to Hope Now, down 3.4 percent from the previous quarter and down 45.7 percent from the first quarter of 2013. On a monthly basis, loan mod activity continued to decline in April. Loan mod activity is...

U.S. Bank became the latest casualty in the government’s offensive against lax underwriting and improper origination of FHA mortgages after the bank to pay $200 million to settle all related charges. The Minneapolis-based bank became the seventh FHA lender since 2012 that has entered into settlement agreements with the Department of Justice and the Department of Housing and Urban Development to resolve alleged violation of the False Claims Act and the Financial Institution Reform, Recovery and Enforcement Act, according to Inside FHA Lending’s analysis of government data. The government lawsuits allege that the banks’ certification of loans as eligible for FHA insurance under the direct endorsement program violated the FCA. The banks’ misconduct allegedly contributed to the legacy losses that crippled the FHA Mutual Mortgage Insurance Fund and placed the ...

It has been barely a month since the FHA deployed its Lender Electronic Assessment Portal (LEAP 3.0), but lenders are already having difficulty executing some functions in the new system. Lenders are complaining about how hard it is to provide access to independent public accountants (IPA) for purposes of recertification functions, as well as difficulties in making changes to existing branches or adding new ones or changing cash flow accounts. Lenders are concerned they may be sanctioned or penalized if they make a mistake, but the FHA seems not inclined to do this because the system is new. “[We] are highly focused on correcting these issues, and hope to have these functions working properly very soon,” the agency promised in a recent note to FHA lenders. The FHA said it is also aware of the complications that some lenders have faced in submitting their annual recertification in LEAP. Many of these problems have been addressed and the deadline for submission of recertification packages has been extended as well, the agency noted.

The FHA has announced new principal limit factors (PLF) for Home Equity Conversion Mortgages along with instructions to lenders to ensure that borrowers and their non-borrowing spouses understand the benefits and disadvantages of a reverse mortgage. The new PLF tables have been wholly revised and now include PLFs for use where the borrower has a non-borrowing spouse younger than age 62. In recent guidance, the FHA urged lenders to ensure that borrowers are provided with an analysis of the cost of a HECM loan and its benefits so that they can decide whether a reverse mortgage would meet their financial needs. Lenders also must advise prospective borrowers and their non-borrowing spouses to consult with a housing counselor whether PLFs below 20 percent may or may not actually improve their financial situation or meet their special needs. “Significant consideration should be given to the ...

The FHA has extended indefinitely the timeframe during which servicers may begin to foreclose on properties with reverse mortgages while it considers possible steps to protect non-borrowing spouses of deceased reverse-mortgage borrowers from outright eviction from their homes. The latest action stemmed from a June 10 court order, which found that current statutory protection for reverse mortgage borrowers against forced eviction and foreclosure extended to their spouses even if the latter is not a co-signer on the note. Non-borrowing spouses of deceased Home Equity Conversion Mortgage borrowers sued in federal district court in Washington, DC, last year to stop foreclosure on their homes and to challenge the Department of Housing and Urban Development’s interpretation of the regulation. Since launching the HECM program, HUD has required that a HECM be ...