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...
The FHA will allow lenders to suspend foreclosures on properties backed by Home Equity Conversion Mortgage loans for up to 60 days to help non-borrowing spouses of deceased HECM borrowers temporarily avoid eviction and, possibly, foreclosure. The announcement of the policy came as a federal district court judge for the District of Columbia considered whether to certify a class-action case filed by four surviving spouses of HECM borrowers last month. The lawsuit alleges that HUD had failed to protect them from being displaced from their homes – the same protection HECM regulations extend to reverse mortgage borrowers. The suit accuses the department of violating the federal Administrative Procedures Act by promulgating contradictory regulations without public comment. Last September, a DC judge found HUD in violation of federal law in a similar case and ordered that the case ...
Wells Fargo has expanded its acceptance of electronic signatures on FHA mortgage-related documents to correspondent lenders – a move that could spur other lenders to consider a similar shift as purchase originations rise. Details of the expansion are available in Wells Fargo current Seller Guide. However, access is restricted to correspondent lenders because the guide contains proprietary information, according to a company spokesman. DocuSign, whose Digitized Transaction Management (DTM) platform is being used by Wells Fargo and other financial services clients, said the expansion follows FHA’s announcement earlier this year of acceptance of e-signatures on all single-family origination and servicing/loss mitigation documents, FHA claims and real estate-owned sales contracts, with the exception of notes. The FHA announcement builds on an ...
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