With the brouhaha over the CFPB’s interest in the industry use of marketing services agreements growing, it is the bureau itself that is the biggest threat under the Real Estate Settlement Procedures Act, a leading industry attorney charged last week. “The threat, in a few short words, is the CFPB,” said Donald Lampe, a partner with the Morrison & Foerster law firm, during a webinar last week sponsored by Inside Mortgage Finance, an affiliated publication. “The CFPB, before our eyes, is rewriting the law, rules and previous guidance on RESPA Section 8(c)(2), which is the exception to RESPA for bona fide payments for services actually rendered – not just for MSAs, but so far, MSAs have received the most attention,” he ...

The biggest challenge that banks, credit unions and other lenders anticipate with the CFPB’s new final rule under the Home Mortgage Disclosure Act is accurate data capture, according to a new survey from Wolters Kluwer Financial Services. “Overall, concerns about the new HMDA data-collection rules generated a 67 percent rating by respondents, reflecting a degree of impact ranking of a ‘7’ or higher on a 10-point scale,” WKFS said. “When asked to rank specific HMDA challenges, 64 percent of respondents cited the task of accurately capturing the new data fields as either their first or second biggest obstacle in complying with the new rules.” System upgrades, increased staffing and other costs also are driving industry anxiety, the survey found. Upgrading ...

Last week, the CFPB filed suit in U.S. District Court for the Southern District of California against Global Financial Support, Inc., and Armond Aria, owner and CEO, to stop what the bureau characterized as a nationwide student financial aid scam. The company, which has operated as Student Financial Resource Center and College Financial Advisory, allegedly ripped off tens of thousands of students and families by illegally charging millions of dollars in fees for sham financial services. The CFPB alleges that Aria and his businesses operate under the guise of a government- or university-affiliated operation, exploiting consumer uncertainty about how to use free federal financial aid resources provided by the Department of Education. The defendants allegedly “sent millions of deceptive letters ...

The CFPB filed a $3.3 million administrative order last week against Security National Automotive Acceptance Company, a Mason, OH-based auto lender that specializes in making loans to U.S. military personnel, accusing it of engaging in illegal debt collection practices. The order requires the company to refund or credit approximately $2.28 million to service members and other consumers who were allegedly harmed, and to pay a $1 million penalty. When the CFPB sued SNAAC in June, it alleged the company used aggressive collection tactics that took advantage of U.S. service members’ special obligations to remain current on debts. “Once service members defaulted, they became subject to repeated threats to contact their chain of command,” said the CFPB. “In many other instances, ...

Five months after Corinthian Colleges went belly up, the CFPB succeeded in convincing a federal court to enter a final default judgement against the company, bringing to an end the litigation the bureau filed back in September 2014. The bureau accused Corinthian of luring tens of thousands of students into taking out private loans to cover expensive tuition costs by advertising bogus job prospects and career services. “Corinthian then used illegal debt collection tactics to strong-arm students into paying back those loans while still in school,” the CFPB stated. In its final judgment, the court ordered that Corinthian was liable for more than $530 million and prohibited the company from engaging in future misconduct. However, since the company’s assets are ...

CFPB Retracts Cordray’s Claim About Most Jumbo Mortgages Being Non-QMs. Questions from Inside Nonconforming Markets, an affiliated newsletter, compelled the CFPB to concede that Director Richard Cordray misspoke during a speech at the Mortgage Bankers Association’s recent annual convention in San Diego. In asserting that the CFPB’s ability-to-repay rule hasn’t caused a significant reduction in mortgage originations, Cordray referenced jumbo loans, “most of which are non-QM loans,” he said. “While comprehensive data on the non-QM share of jumbo mortgages are not available, a number of data sources suggest that most jumbos are in fact QMs, not non-QMs,” Inside Nonconforming Markets went on to note. Three of the five largest jumbo lenders told the newsletter most of their jumbos are QMs, ...

In late December, issuers of new non-agency MBS will become subject to new risk-retention requirements. It’s not clear whether anyone will notice. The vast majority of loans securitized in jumbo MBS over the past few years meet the qualified-mortgage standard. And because federal regulators opted to synchronize the QM standard with the separate qualified residential-mortgage standard, jumbo MBS backed entirely by QMs will be exempt from the 5 percent risk-retention requirement. When the final rule came out, Redwood Trust backed...

A 10 basis point surcharge on Fannie Mae and Freddie Mac guaranty fees that went into effect in 2012 could end up being extended for another five years as lawmakers on Capitol Hill look for money to back the federal government’s Highway Trust Fund. The 10 percent increase in the government-sponsored enterprises’ g-fees was designed to pay for an extension of a federal payroll tax cut. It is currently scheduled to run to 2021, generating $35.7 billion in revenue, according to the Congressional Budget Office. With transportation funding set to expire Oct. 29, the House this week approved...

The Federal Reserve’s zero interest rate policy lives to die another day, as the Fed’s Open Market Committee opted this week to hold the line on a rate increase, as it has since December 2008, leaving investors and other market participants to try to read the tea leaves as best they can. “To support continued progress toward maximum employment and price stability, the committee today reaffirmed its view that the current 0 to 0.25 percent target range for the federal funds rate remains appropriate,” the FOMC said in its much-anticipated statement, issued mid-week. In making its decision about whether to raise the target range at its next meeting, scheduled for mid-December, the Fed said...

JPMorgan Chase was set to issue its latest jumbo mortgage-backed security as Inside Nonconforming Markets went to press. The bank’s sixth jumbo MBS of the year was slated to be a $344.87 million deal, according to presale reports. Chase continued to stock its jumbo MBS with loans that have seasoned a while longer than other issuers. Loans in JPMorgan Mortgage Trust 2015-6 had seasoned for an average of nine months, according to DBRS. Nearly 20 percent of the mortgages appear to have application dates from before Jan. 10, 2014. All of the loans subject to standards for qualified mortgages were deemed...