The supply of mortgage debt outstanding declined again during the first quarter of 2014, slipping to its lowest level in eight years, according to new Federal Reserve data. There was a total of $9.851 trillion of home mortgages outstanding as of the end of March, down 0.4 percent from the previous quarter. The mortgage servicing market has been in almost constant decline since midway through 2008, with a modest bump higher in the third quarter of last year after a relatively strong rally in housing activity. Even the agency mortgage servicing market lost...[Includes two data charts]

The Federal Housing Finance Agency will “assess the merits of litigation” against Fannie Mae’s and Freddie Mac’s servicers and lender-placed insurance providers to recover premium overpayments by the government-sponsored enterprises following a pointed suggestion to do so by the agency’s official watchdog. A new audit released by the FHFA’s Inspector General found that Fannie and Freddie could have overpaid about $158 million in 2012 alone for lender-placed or “force-placed” insurance policies. The IG said it calculated its $158 million figure as the difference between the amount the GSEs actually paid in premiums – $360 million – and a “reasonable” price for such coverage – $202 million. “Our retrospective analysis suggests...

There’s still more than a year left before the Consumer Financial Protection Bureau’s integrated mortgage disclosure final rule takes effect. But top industry representatives are urging lenders to begin preparations now, if they haven’t already done so, because of the depth and breadth of the new regulation – and the central role it will play in the origination process. During a general session of the American Bankers Association’s annual regulatory compliance conference, held in New Orleans earlier this month, Rod Alba, senior regulatory counsel for the trade group, said that the CFPB’s TILA/RESPA integrated disclosure – known as TRID – is a massive project. “We cannot take it lightly,” Alba said. He also emphasized...

Last week, the CFPB ordered GE Capital Retail Bank – a financial institution in New Jersey now known as Synchrony Bank – to provide approximately $225 million in relief to consumers harmed by alleged illegal and discriminatory credit card practices. Under the terms of a consent order brought by the bureau, GE Capital is required to refund $56 million to approximately 638,000 consumers who were subjected to allegedly deceptive marketing practices. As part of the joint enforcement action by the CFPB and Department of Justice, GE Capital must also provide an additional $169 million to about 108,000 borrowers excluded from debt relief offers because of their national origin. The consent order represents the federal government’s largest credit card discrimination settlement in history...

The CFPB recently ordered a New Jersey company, Stonebridge Title Services Inc., to pay a $30,000 civil penalty to the bureau for allegedly paying illegal kickbacks for referrals. According to the CFPB, Stonebridge paid commissions to more than 20 independent sales representatives who referred title insurance business to Stonebridge. Stonebridge solicited people to provide it with referrals of title insurance business, offering to pay commissions of up to 40 percent of the title insurance premiums Stonebridge itself received, the bureau alleged. “These practices violated Section 8 of the Real Estate Settlement Procedures Act, which prohibits kickbacks and payment of unearned fees in the context of residential real estate transactions,” the CFPB said. Paying commissions for referrals is allowed under RESPA ...

To minimize the risk that their newly minted mortgage loans will fail to comply with the CFPB’s ability-to-pay rules, originators, correspondent lenders and purchasers have begun using independent advisors to perform various quality control functions. Among those functions are ATR/qualified mortgage review, mortgage risk assessment and a mortgage defense package, according to Ron D’Vari, CEO of NewOak, an independent financial services advisory firm in New York City. The ATR/QM review consists of a three-step process (aimed at compliance with ATR/QM requirements) run in conjunction with a credit review or stand-alone, D’Vari said in an online blog post recently. “The first step is diagnostics involving standard due diligence review aimed at identifying deficiencies leading to potential liability for non-compliance with ATR ...

Later this summer, the CFPB plans to release a white paper on the proxy methodology it employs to identify alleged discrimination in indirect auto financing, CFPB Director Richard Cordray told the House Financial Services Committee last week. This is one of a few bipartisan hot potatoes the bureau has been contending with on Capitol Hill. Back in March 2013, the CFPB issued a bulletin asserting authority to hold indirect auto lenders accountable for illegal, discriminatory pricing markups, and provided guidance to such lenders within the bureau’s jurisdiction as to how to appropriately handle fair lending risk. Consumer advocates were quick to embrace the bulletin, but the auto lending industry and its supporters in Congress have been pressing the bureau ever ...

Rod Alba, senior regulatory counsel for the American Bankers Association, told attendees at this year’s ABA regulatory compliance conference it will take the mortgage industry roughly 10 years for all the new rulemakings issued and still pending at the CFPB and elsewhere to reach a point of finality, stability and certainty. “I’ve said that it would take us possibly a full decade to get through all the rulemaking we have with mortgages. We’ve started about two or three years ago with the first being proposed and now at the beginning of this year with some of the rules [taking effect],” he said. Why a decade? “Well, not all the rules are done yet. As you know, we still have the ...

Fannie Mae and the Federal Home Loan Bank of Chicago were among the public commenters supporting – with some key revisions – the CFPB’s proposed “right to cure” a mortgage made in good faith that inadvertently exceeds the 3 percent points-and-fees cap under the bureau’s qualified mortgage standard.Earlier this year, the CFPB proposed allowing a cure for a points-and-fee violation if three criteria are satisfied, the first of which is if the creditor in good faith intended to originate the loan as a QM and the loan otherwise meets the requirements of a QM. Additionally, the creditor or the assignee has to refund to the consumer the dollar amount by which the loan's points and fees exceed the applicable limit and ...