The CFPB recently brought a $4 million enforcement action against Wells Fargo, alleging the bank engaged in illegal private student loan servicing practices that increased costs and unfairly penalized certain student loan borrowers. “Wells Fargo hit borrowers with illegal fees and deprived others of critical information needed to effectively manage their student loan accounts,” said CFPB Director Richard Cordray. The bureau said it identified breakdowns throughout Wells Fargo’s servicing process, such as failing to provide important payment information to consumers, charging consumers illegal fees, and failing to update inaccurate credit report information. One of the CFPB’s charges against the company was that it processed payments in a way that maximized fees for many consumers. “Specifically, if a borrower made a ...

Over the past week, two nonprime MBS deals came to light: a $138.89 million bond issued by Deephaven Residential Mortgage Trust and a $119.38 million security from Angel Oak Real Estate Investment Trust. Both deals were private placements backed by newly originated mortgages and underwritten by Wall Street veterans Credit Suisse and Nomura Securities. Although both were publicized this week, the transactions – which were not rated – closed...

Manufactured housing advocates are pushing for more government-sponsored enterprise support for manufactured lending, especially for chattel loans that are not considered mortgages because the loan is not secured by a dwelling and land. The issue has gathered steam as the Federal Housing Finance Agency works to finalize a “duty-to-serve” regulation for Fannie Mae and Freddie Mac that focuses on mortgage financing for very low-, low- and moderate-income families in rural areas and manufactured housing. Back in May, the Manufactured Housing Institute and representatives from both GSEs had discussed...

The Federal Communications Commission has issued a baffling final rule restricting the way servicers can collect on or service student loans, mortgages and other debts owed to the federal government.Specifically, the rule implements a key provision in the Bipartisan Budget Act of 2015 amending the Telephone Consumer Protection Act to exclude robocalls from the TCPA consent requirement if they are made solely to collect a debt owed to or guaranteed by the federal government.The TCPA generally requires a caller to obtain “prior express consent” from the call recipient before making a telemarketing call or an auto-dial call to the recipient’s landline or cell phone.However, the mortgage industry raised concerns that TCPA’s consent requirement could create potential liability for important servicing calls that could help homeowners save their homes, which prompted Congress to pass the Budget Act amendment. Last month, the FCC specifically excluded the federal government from the TCPA’s consumer protections by ruling that the government is not a “person” subject to the TCPA. Here is where the FCC rule gets confusing. commission is authorized to adopt rules to “restrict or limit the number and duration” of any wireless calls to collect debt owed to the federal government.”

The Federal Communications Commission has refused an industry request to exempt mortgage servicing calls from prohibitions against the use of “robocalls,” or automated dialing and calling systems, to contact delinquent borrowers on their cell phones. In a long-awaited final rule limiting the way servicers can collect on student loans, mortgages and other debts owed to the federal government, the FCC said it would not make a decision on whether the statutory exemption from the Telephone Consumer Protection Act’s “prior express consent” requirements applies to Fannie Mae and Freddie Mac loans or their servicers. The TCPA and FCC regulations require...

The CFPB’s TILA/RESPA Integrated Disclosure Rule continues to have mixed results, at least from the perspective of the nation’s mortgage originator community. According to the recently released results of a survey by the National Association of Realtors of mortgage originators during the second quarter of 2016, delays attributed to TRID eased between the first and second quarters of the year, as did lenders’ reluctance to offer pre-approval letters, while cancellations ticked up. Originators were asked, since April 1, what share of their company’s mortgage transactions had been delayed or cancelled due to a TRID-related issue versus non-TRID issues. Mortgages delayed due to TRID ticked barely down, from 1.8 percent in 1Q16 to 1.7 percent in 2Q16. In the fourth quarter ...

A National Association of Realtors survey of mortgage originators during the second quarter of the year found that lending outside the parameters of the qualified mortgage standard remains in the doldrums, even though there appeared to be a slight improvement in demand from investors for such loans. Survey participants were asked to provide the percentage share of their production for safe-harbor QM loans, rebuttal-presumption QM loans, and non-QM loans. Respondents indicated that a whopping 93.2 percent of production was in the safe-harbor QM space during 2Q16, up from 89.9 percent in 1Q16. That gain came at the expense of the other two categories. Production of rebuttable-presumption QMs fell from 9.9 percent in the first quarter of the year to 6.7 percent ...

Most of the small-entity participants in the review processes run by the CFPB before it came out with four major mortgage rules felt they were hurried by the process and unsatisfied with the final results, the Government Accountability Office said in a recent report. The GAO took a look at the experience of the 69 Small Business Regulatory Enforcement Fairness Act (SBREFA) panel participants involved in evaluating the likely effects of the CFPB’s TILA/RESPA Integrated Disclosure rule (TRID), the mortgage servicing regulation, its loan originator compensation rule, and the Home Mortgage Disclosure Act regulation. Of the 57 small-entity representatives GAO interviewed, “two-thirds stated not enough time was allotted to discuss at least one of the topics on the panel agenda ...

One mortgage lender recently inquired of Michael Goldhirsh, director of legal and regulatory compliance for the Lenders Compliance Group, as to whether the definition of “application” in the CFPB’s TILA/RESPA Integrated Disclosure rule (TRID) triggers or otherwise affects reporting under the Home Mortgage Disclosure Act. In a recent blog posting, he replied: “The short answer is that receipt of some or all of the six pieces of TRID application information does not necessarily trigger an application for purposes of HMDA reporting.” Goldhirsh went on to explain that Regulation C defines an application for HMDA reporting purposes as an oral or written request for a home purchase loan, a home improvement loan, or a refinancing that is made in accordance with ...

Student loan borrowers are encountering difficulties when they try to file an application for income-driven repayment (IDR) plans, according to the CFPB’s midyear update on student loan complaints, which was released late last week. Since 2009, the vast majority of borrowers with federal student loans have a right under federal law to set their monthly student loan payments based on their income. For borrowers who are unemployed or earn low wages, these IDR plans provide for a “payment” as low as $0 per month.“Many borrowers depend on student loan servicers to inform them about the availability of IDR options and for processing borrowers’ enrollment in these plans,” said the bureau. “This report observes that borrowers encounter obstacles when submitting ...