Warehouse banks ended the third quarter with $46.0 billion of commitments on their books, a 4.2 percent sequential decline as residential originations in the primary market slowed and nonbank customers needed less credit. According to survey figures compiled by Inside Mortgage Finance, warehouse commitments at the end of September were up 27.8 percent from the same point in 2014. The quarterly decline was...

Wells Fargo is reportedly under investigation for a practice that banks across the industry have relied on for years: cross-selling financial products to their customers. Big banks have been particularly upfront about how they see jumbo mortgages originated for portfolio as a way to cross-sell other products. Cross-selling financial products occurred without much regulatory scrutiny until a lawsuit by the Los Angeles City Attorney in May. LA City Attorney Mike Feuer alleged that Wells’ cross-selling activities violated California’s unfair competition law. The Office of the Comptroller of the Currency and the Federal Reserve Bank of San Francisco are also reportedly investigating Wells’ cross-selling. Feuer alleged...

It may just be a matter of time before CFPB Director Richard Cordray accuses the mortgage industry of “crying wolf” again, this time over inflated warnings about the damage to the housing markets the industry said would result from the bureau’s much-ballyhooed integrated disclosure rule. The CFPB’s Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure rule kicked in Oct. 3, 2015. And even though some industry vendors were scrambling to deliver software updates into the evening the night before, it looks like the rule has had little immediate effect on the markets, according to the results of the latest HousingPulse survey sponsored by Inside Mortgage Finance, an affiliated publication, along with Campbell Surveys, which performed the survey. “While ...

The U.S. House of Representatives voted 255 to 174 recently to expand the CFPB’s qualified mortgage safe harbor to include all residential mortgages held in the originating lender’s portfolio. Similar legislative language exists in S. 1484, the Financial Regulatory Improvement Act of 2015, the regulatory relief bill pushed by Senate Banking, Housing and Urban Affairs Committee Chairman Richard Shelby, R-AL, which is going to be incorporated into appropriations legislation shortly. The big questions now are whether those QM provisions will remain attached to the next spending bill as it moves through the nation’s legislature, and if so, whether congressional Republicans can again succeed in using the appropriations process to bypass Democrat opposition. Now the bad news: The White House has ...

The new and modified data required under the CFPB’s recently released Home Mortgage Disclosure Act final rule will probably result in greater regulatory and legal scrutiny of mortgage lenders, so covered institutions should take a proactive approach to implementation, according to top legal experts. In a recent client alert, the attorneys in the mortgage banking and consumer financial services groups at the Ballard Spahr law firm noted that the new and modified data will include “much more detail about applicants, borrowers, credit, collateral, loan type, pricing, fees, charges, the originator, and the covered institution. The new and modified data will enable regulators and private parties to analyze a lender’s practices in much greater detail than is currently possible.” Analyses of ...

The CFPB indicated in its recently released 2015 rulemaking agenda that it is continuing to finalize a proposal it published in December 2014 to amend certain aspects of the bureau’s 2013 mortgage servicing rules. The proposal addressed, among other things, enhanced loss mitigation requirements and compliance with certain rules when the borrower is a potential or confirmed successor in interest or is in bankruptcy. “We have been conducting testing of periodic statements for consumers in bankruptcy and are working to develop the final rule for issuance in mid-2016,” the CFPB said. The bureau also will continue working to support implementation of the multiple mortgage rules required by the Dodd-Frank Act, such as the Home Mortgage Disclosure Act rule, the integrated ...

The CFPB recently petitioned the U.S. District Court for the District of Columbia to enforce a civil investigative demand (CID) it issued back in August to the Accrediting Council for Independent Colleges and Schools (ACICS), despite congressional objections and arm-twisting. The CID was issued during a bureau probe of possible violations of the Consumer Financial Protection Act of 2010 or other federal consumer financial protection laws. “The CID issued to ACICS relates to a bureau investigation to determine whether any entity or person has engaged or is engaging in unlawful acts and practices in connection with accrediting of for-profit colleges” in violation of CFPA provisions addressing unfair, deceptive or abusive acts or practices, the CFPB told the court. The demand ...

The U.S. House of Representatives recently passed bipartisan legislation, H.R.1737, the Reforming CFPB Indirect Auto Financing Guidance Act, which would declare “without force or effect” the bureau’s controversial guidance on indirect auto finance. At issue is CFPB Bulletin 2013-02 (Indirect Auto Lending and Compliance with the Equal Credit Opportunity Act), which the bureau published on March 21, 2013. The bill also would direct the CFPB, when proposing and issuing guidance primarily related to indirect auto financing, to provide for a public notice and comment period before issuing the guidance in final form; make publicly available all information relied on by the CFPB; and redact any information exempt from disclosure under the Freedom of Information Act. The bureau also would have ...

CFPB, Fed, OCC Announce Threshold for Smaller Loan Exemption from Appraisal Requirements for Higher-Priced Mortgage Loans. Last week, the CFPB, the Federal Reserve and the Office of the Comptroller of the Currency announced that the threshold for exempting loans from special appraisal requirements under the Dodd-Frank Act for higher-priced mortgage loans during 2016 will remain $25,500.The threshold amount will be effective January 1, 2016, and is the same threshold that applied in 2015 – based on the annual percentage decrease in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) as of June 1, 2015. ...

Some investors won’t return to the non-agency MBS market until the federal government establishes minimum standards for issuers, according to Chris Katopis, executive director of the Association of Mortgage Investors. Speaking at the RMBS 3.0 symposium produced by Information Management Network and the Structured Finance Industry Group this month in New York, Katopis said investors are frustrated with the lack of action from the government to help the non-agency MBS market. “We know there’s a lot of work going on, but at some point the government has to set minimum standards,” he said.Katopis said investors are happy that SFIG is working on a new representation-and-warranty framework for non-agency MBS. However, the AMI is skeptical of voluntary industry standards. “Having ...