The CFPB recently brought enforcement actions against two large debt buyers and collectors, Encore Capital Group, in San Diego, and Portfolio Recovery Associates, in Norfolk, VA, accusing the companies of using deceptive tactics to collect bad debts. The bureau said the companies bought debts that were potentially inaccurate, lacking documentation or unenforceable. “Without verifying the debt, the companies collected payments by pressuring consumers with false statements and churning out lawsuits using robo-signed court documents,” said the CFPB. In terms of the companies’ allegedly illegal litigation practices, the CFPB accused the pair of misrepresenting their intention to prove debts they sued consumers over. They also allegedly sued or threatened to sue consumers past the statute of limitations. Further, the companies allegedly ...

he CFPB and the Department of Justice said in an amicus brief with the Supreme Court of the United States that a plaintiff does not necessarily have to prove actual harm from a violation of the Fair Credit Reporting Act in order to have standing under Article III of the U.S. Constitution. The specific question in Spokeo, Inc. v. Robins is whether the respondent (Robins) identified an Article III injury-in-fact by alleging that the petitioner (Spokeo) had willfully violated the FCRA by publishing inaccurate personal information in consumer reports – in this case, on a consumer-reporting type website – without following reasonable procedures to assure the information’s accuracy. In their brief, the CFPB and DOJ argue that the invasion of the respondent’s ...

Multiple Issues With TRID Remain, Official Says. Mortgage Bankers Association Vice Chairman Rodrigo Lopez told attendees at the group’s Risk Management, Quality Assurance and Fraud Prevention Forum in Dallas recently that the MBA supports additional disclosures, but that “many issues remain to be resolved” when it comes to the TILA/RESPA Integrated Disclosure (TRID) rule. “So far, the CFPB has provided only limited guidance on the new rules,” he noted. “MBA is urging the CFPB to resolve a number of issues, including differences between state and federal laws, that threaten to add layers of complexity to the mortgage loan process.” Lopez went on to say that legislation in Congress that would provide mortgage lenders with a safe harbor for their good-faith ...

Last week, Angel Oak Mortgage Solutions was slated to issue a roughly $150 million security backed by nonprime mortgages, an event that promised great things for both the company and the non-agency market. But then nothing happened, or so it appears. Two weeks after confirming to Inside MBS & ABS and another news organization that a new nonprime security was definitely ready to price, the company – and its underwriter, Nomura Securities – has suddenly stopped talking about the deal, both publicly and privately. One source who has held meetings with executives at both firms said...

The Federal Reserve’s Open Market Committee this week fulfilled the expectations of roughly half the Wall Street participants and economists surveyed by financial news organizations and opted to hold the line on interest rates, and to maintain the status quo when it comes to the Fed’s massive balance sheet holdings of agency residential MBS and debt. “We recognize that there has been a great deal of focus on today’s policy decision,” Fed Chair Janet Yellen said in her press conference after the FOMC’s two-day meeting concluded Thursday afternoon. “The recovery from the Great Recession has advanced sufficiently far, and domestic spending appears sufficiently robust, that an argument can be made for a rise in interest rates at this time. We discussed this possibility at our meeting. “However, in light of the heightened uncertainties abroad, and a slightly softer expected path for inflation, the committee judged...

Nearly a year has passed since the Structured Finance Industry Group released documents relating to the RMBS 3.0 project and the leader of the Treasury Department’s non-agency reform efforts left the Treasury in May. However, at the ABS East conference sponsored by Information Management Network this week in Miami, industry participants noted that progress is being made on both initiatives. Panel sessions on reforming the non-agency mortgage-backed securities markets have been a staple at industry conferences since 2008, and some observers question whether much progress has been made. “I think...

Originations of interest-only mortgages increased at a number of lenders in the first half of 2015, according to a new ranking and analysis by Inside Nonconforming Markets. The federal qualified mortgage standard does not allow interest-only terms, and IO production declined after the Consumer Financial Protection Bureau QM rule went into effect. Lately, however, many lenders seem to be getting more comfortable with the product. A group of 15 lenders had...[Includes one data table]

The Senate this week approved by unanimous consent a narrow bill to reverse hefty pay hikes for the chief executive officers of Fannie Mae and Freddie Mac. A similar bill cleared the House Financial Services Committee this summer with heavy bipartisan support, and the White House has signaled it has no objections to the measure. But the Senate steered clear of more controversial proposals regarding the two government-sponsored enterprises, including language sought by Sen. Bob Corker, R-TN, barring the Department of Treasury from selling its senior preferred stock in the GSEs without approval from Capitol Hill. According to reports, Sen. Sherrod Brown, D-OH, put...

The real estate finance industry is not opposed to more simplified mortgage disclosures for consumers. But the Consumer Financial Protection Bureau’s integrated disclosure rule as it’s now written will cost the industry billions of dollars every year, one industry official warned. The rule, intended to harmonize and integrate the disclosures required under the Truth in Lending Act and the Real Estate Settlement Procedures Act, is slated to become effective on Oct. 3, 2015, a scant two weeks away. “If left and implemented as is, TRID will require...

Lender compensation of loan originators has become a whole new world now that the Consumer Financial Protection Bureau has taken over enforcement for many lenders. During an Inside Mortgage Finance webinar this week, three top legal experts spelled out multiple lessons lenders should learn if they wish to avoid the fate that has befallen some of their peers at the hands of the CFPB. Kristie Kully, a partner with the K&L Gates law firm, drew a number of key take-aways from the first such enforcement action brought by the bureau, which occurred in November 2013, when the CFPB accused Castle & Cook and two of its executives of paying illegal bonuses for steering consumers into costlier mortgages. More specifically, the bureau alleged...