As part of the CFPB’s public forum last week during which the agency announced its forthcoming eClosing pilot project, the bureau also issued guidelines that articulate the minimum functionalities required of potential participants and spell out the features the CFPB wants to test in the pilot. To join the bureau’s pilot on electronic closings, each participant must currently have a system that meets minimal technical capabilities and requirements, as demonstrated by specific features and functionalities. “The CFPB created these minimum requirements to ensure that the pilot program is focused on the specific features and consumer outcomes that the bureau is seeking to evaluate,” the agency said.First, a pilot participant must have an eClosing solution with the ability to store...
More regulation of the private student loan sector seems likely after the CFPB issued a report last week critical of “auto-defaults” in private student lending. According to the bureau, borrowers have complained that some lenders demand immediate full repayment upon the death or bankruptcy of their loan co-signer, even when the loan is current and being paid on time. Borrowers also told the CFPB they face bureaucratic barriers to releasing co-signers from their loans, a commonly advertised benefit that could help avoid auto-defaults. “Students often rely on parents or grandparents to co-sign their private student loans to achieve the dream of higher education. When tragedy triggers an automatic default, responsible borrowers are thrown into financial distress with demands of immediate...
One option that some affiliated business arrangements can use as a mechanism to cope with the CFPB’s ability to repay rule is to change their ownership structure, according to a top industry compliance attorney. Loretta Salzano, a founding partner of Franzén and Salzano, warned attendees at the recent Real Estate Settlement Providers Council’s 2014 annual conference that, “Lenders with affiliated providers must consider the ATR’s impact on their business based on the number and type of affiliates, the break point based on fees of all affiliates, the average loan amount, and the markets served.” Part of that process means lenders have to look and see where their break point is, the point at which they will breach the 3 percent...
The CFPB and the Federal Housing Finance Agency apparently are mailing $5 bills as “a small token of appreciation” to new homeowners to encourage them to participate in a survey associated with the agencies’ joint project to develop a national mortgage database, Inside the CFPB has learned. “I am writing to ask for your help with an important national survey of consumers about their mortgage loan experiences,” says a joint sample letter prepared with CFPB letterhead, with room for a signature for a representative from both agencies. “I understand that in the last 12 months you obtained a mortgage for your home (or a residence that is rented or otherwise occupied by others). Your recent experience is very important to...
A steep 46.8 percent plunge in consumer complaints about loan modifications in the first quarter from year-ago levels fueled a 29.3 percent drop in overall gripes to the Consumer Financial Protection Bureau from the same time last year, according to a new analysis by Inside the CFPB. Grievances about the loan application/mortgage origination process fell almost as much, down 26.7 percent, year over year. While mortgage-related complaints were down on a yearly basis, gripes regarding mortgages increased by 20.0 percent in the first quarter of 2014 compared with the previous quarter. Another key quarterly performance metric, grievances about servicing, trended up as well, increasing by 29.1 percent versus the period ending Dec. 31, 2013. [Includes two exclusive charts]...
Ginnie Mae has asked Bank of America to provide missing documents on government insured loan pools after being informed by the MBS custodian that key paperwork is missing from the files. According to industry advisors familiar with the matter, the missing documents are tied to an $8 billion mortgage-servicing sale from BofA to PennyMac. So far, both parties have declined to discuss the matter publicly. One observer noted...
In a development with potentially negative implications for lenders, servicers and investors in student loan ABS, the Consumer Financial Protection Bureau released a report this week critical of the “auto-default” practice seen in private student lending. According to the CFPB’s Mid-Year Update on Student Loan Complaints, borrowers say that some lenders demand immediate full repayment upon the death or bankruptcy of their loan co-signer, even in cases when the loan is current. Borrowers also said they confronted bureaucratic barriers to releasing co-signers from their loans, something that could help avoid auto-defaults. “Students often rely...
At one shop based in the Midwest there’s unconfirmed talk of loan officers who haven’t been paid for months, unpaid leases and top executives who were on vacation as volumes collapsed.
UBS AG and Union Central Life Insurance Co. this week announced they have settled their legal dispute regarding the sale of residential MBS that UBS sold to the insurer in the years leading up to the financial crisis. The settlement reached in early March but jointly announced just this week, ends the legal action begun in a New York federal court in 2011. Union Central and affiliates Ameritas Life Insurance Corp. and Acacia Life Insurance Co. sued UBS and other financial service companies and executives in 2011, alleging that the defendants misrepresented the quality of the loans underlying the residential MBS that they sold to the insurers. In a 2012 amended complaint, Union Central alleged...
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