Participants in the non-agency market are concerned that the Consumer Financial Protection Bureau hasn’t done enough to provide lenders and investors with certainty regarding the liability associated with the TILA-RESPA Integrated Disclosure rule. The CFPB issued a proposed rule in August that would clarify a number of concerns regarding TRID. But the bureau’s proposed rule didn’t include guidance CFPB Director Richard Cordray had detailed in a Dec. 29 letter to the Mortgage ...

The Consumer Financial Protection Bureau recently forced “one or more lenders” to take corrective actions regarding income-verification practices for non-qualified mortgages. The CFPB said the lenders weren’t verifying borrowers’ income properly under the ability-to-repay rule. The CFPB found that some lenders offered non-QMs that allowed for “alternative income documentation” for salaried borrowers. The CFPB said the products offered by the lenders relied primarily on the assets of ...

The Department of Veterans Affairs is proposing to establish fees for originating and servicing vendee loans. Vendee loans are not veterans’ benefits and are distinct from VA-guaranteed loans, the agency clarified in a proposed rule published in the Oct. 26 Federal Register. Vendee financing is...

Bank of America – the nation’s third largest residential originator – this week gave its mortgage loan officers an edict: start taking applications for auto loans as well. Going forward, mortgage loan officers will be known simply as “loan officers.” A BofA spokesman confirmed the changes to Inside Mortgage Finance, but cautioned that LOs will not be taking applications for checking accounts and credit cards, though referrals can be made to other divisions of the bank. BofA watchers, as well as the bank’s competitors, were scratching...

After hearing lenders’ concerns about the increased reporting burden they would face from some of the changes that Fannie Mae and Freddie Mac want to make to their Uniform Closing Dataset requirements, the two government-sponsored enterprises agreed to postpone the requirement to provide the seller closing data for one year. “The GSEs understand the difficulties that acquiring the seller data presents, particularly as many lenders are still working through their processes to obtain the seller closing disclosure and data from settlement companies,” the pair said late last month in letters to the Mortgage Bankers Association. “In recognition of these challenges, the GSEs have agreed...

Collecting disaggregated race and ethnicity data a full year before the revised Home Mortgage Disclosure Act regulations become effective will benefit covered creditors as they become used to the new requirements and make the necessary system adjustments to accommodate a new wave of granular HMDA data, according to industry attorneys. A policy statement issued by the Consumer Financial Protection Bureau in late September creates a temporary safe harbor for lenders that take advantage of the one-year window – Jan. 1, 2017, through Dec. 31, 2017 – to collect disaggregated ethnic and racial information in their home-loan application if borrowers agree to provide it. Previous amendments to HMDA will require...

The $185.0 million settlement Wells Fargo agreed to in early September regarding retail banking sales practices has impacted the lender’s mortgage operations, according to bank officials. Timothy Sloan, Wells’ president and CEO, said mortgage referral activity declined significantly after the settlement was announced. “Mortgage referrals from retail banking, which account for 10.0 percent of our year-to-date mortgage originations, were down 24.0 percent from August to September,” he said during Wells’ recent earnings call. Sloan noted...

Top mortgage industry representatives urged the CFPB to do more to facilitate the curing of loans with errors under the agency’s controversial Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure rule, otherwise known as TRID. One such organization was the Housing Policy Council of the Financial Services Roundtable. In its comment letter to the CFPB, the HPC said providing more formal guidance on when and how lenders may correct or cure errors is not just a question of potential liability for lenders; it’s also important in reducing the uncertainty of customers if they experience varying interpretations by different lenders. “We recognize that it is difficult to anticipate all types of potential errors in advance,” said the HPC. “There ...

In the weeks leading up to the effective date of the CFPB’s integrated disclosure rule, the agency’s director, Richard Cordray, made clear that, from a supervisory perspective, the bureau would view enforcement of the rule as more diagnostic than punitive – an approach many industry officials believe should continue. In commenting on the CFPB’s proposed rule to clarify a number of aspects of TRID, the Mortgage Bankers Association strongly urged the current diagnostic examination approach be formally extended until the changes necessitated by a final rule have been fully implemented and it is clear that the compliance difficulties with such a complex rule have been largely resolved. “With this policy and the bureau’s and industry’s active engagement as compliance moves forward ...

Many elements of the mortgage finance industry took up the primary concern that real estate agents have had with the CFPB’s integrated disclosure rule since it first took effect: the sharing of the closing disclosure with third parties. In their recent comments to the bureau on its TRID clarifying proposal, multiple industry players said they were glad to see the agency addressed this issue somewhat; however, more must be done. The National Association of Realtors, for instance, told the bureau that one of the unintended consequences of the integrated disclosure rule has been lenders’ reluctance to share the new required CD with real estate professionals out of fear of liability for disclosing clients’ nonpublic personal information.“Regulation P, which governs ...