The Department of Veterans Affairs has issued guidance clarifying its requirements for completing the Interest Rate Reduction Refinance Loan Worksheet. The guidance is effective for all IRRRL applications originated on or after July 2, 2017. The VA said it has received many inquiries from lenders regarding the proper completion of IRRRL Worksheet (VA Form 26-8923) since the implementation of the TRID-LE and CD (Truth in Lending Act-Real Estate Settlement Procedures Act Integrated Loan Estimate and Closing Disclosure.) The guidance clarifies and establishes VA policy regarding the following: Amount of the existing allowable loan balance (Line 1); Principal reduction from veteran (Line 2); Maximum allowable discount points (Line 5); Maximum allowable closing costs (Line 8); Maximum allowable closing costs (Line 11); and Maximum loan amount (Line 18). VA said it understands the ...
Mortgage industry officials are gearing up to weigh in once again on the mortgage servicing rules the Consumer Financial Protection Bureau issued back in 2013. Last week, the CFPB released its proposed plan to assess the rules as required by the Dodd-Frank Act. The bureau plans to evaluate how adequately its rule has met four key purposes: responding to borrower requests and complaints in a timely manner; maintaining and providing accurate information; helping borrowers avoid unwarranted or unnecessary costs and fees; and facilitating review for foreclosure avoidance options. The bureau plans...
The CFPB last week released its plan to assess the effectiveness of its mortgage servicing rule under the Real Estate Settlement Procedures Act and is requesting public input. The bureau issued its mortgage servicing rules under RESPA and Regulation X back in January 2013, and amended the final rule on several occasions before it took effect Jan. 10, 2014. The final rule addressed six major topics: force-placed insurance; error resolution and information requests; general servicing policies, procedures and requirements; early intervention with delinquent borrowers; continuity of contact with delinquent borrowers; and loss mitigation procedures. With its assessment plan, the bureau intends to focus on how well its rule has met four key purposes: responding to borrower requests and complaints in ...
The CFPB was not alone in its crackdown last week on Ocwen Financial over its alleged mortgage servicing failures and violations. The same day the bureau announced its action, Florida Attorney General Pam Bondi and Office of Financial Regulation Commissioner Drew Breakspear filed a federal civil consumer protection lawsuit against Ocwen and subsidiaries, Ocwen Loan Servicing, LLC, and Ocwen Mortgage Servicing, Inc., for what they called “mortgage servicing misconduct.” According to the complaint, Ocwen harmed citizens of the Sunshine State by filing illegal foreclosures, mishandling loan modifications, misapplying mortgage payments, failing to pay insurance premiums from escrow and collecting excessive fees. Ocwen services roughly 125,000 home mortgages in the state. The complaint, filed in federal court in West Palm Beach, ...
The Trump administration’s Department of Justice has convinced the U.S. Court of Appeals for the District of Columbia Circuit to grant it 10 minutes to present its unusual case when oral arguments are heard in the upcoming en banc proceedings in PHH Corp. v. CFPB. “Upon consideration of the unopposed motion of the United States for leave to participate in oral argument, it is ordered that the motion be granted,” the appeals court said in its one-page order. PHH Corp. et al., as petitioners will have 30 minutes to make their case, as will the CFPB as respondent. “The United States agrees with petitioner PHH Corp. that the for-cause removal provision is unconstitutional, but agrees with the CFPB that the ...
Research by two economists in the CFPB’s Office of Research found that many homebuyers do not shop around for a mortgage, and that costs them a pretty penny. “Close to half of consumers did not shop before taking out a mortgage,” CFPB economists Alexei Alexandrov and Sergei Koulayev said in a new white paper. They cited the National Survey of Mortgage Originations, a representative survey conducted jointly by the bureau and the Federal Housing Finance Agency, which found that almost half of consumers “seriously considered” only one lender before making a choice. Also, “Barely any consumers considered more than three lenders,” the economists added. “Worse, many consumers do not seem to realize that there is price dispersion.” In other words, ...
Well, the good news for the mortgage industry is that someone finally got around to talking about the Real Estate Settlement Procedures Act when it came time to file another brief in PHH Corp. v. CFPB. But the bad news: It was the CFPB, and it doubled down on the main arguments it made the first time around, reaffirming its controversial interpretation. The CFPB insisted Director Richard Cordray correctly interpreted the act. First, the agency said PHH’s “kickback scheme” violated RESPA. The interpretation of RESPA by the three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit was incorrect, said the CFPB. “Its crucial error was holding that the meaning of section 8(c)(2) of RESPA – in ...
Three financial regulation scholars told the U.S. Court of Appeals for the District of Columbia Circuit that the CFPB is a highly accountable agency when looked at in its entirety. Making that argument in a friend of the court brief in PHH Corp. v. CFPB were two law professors, Michael Barr at the University of Michigan Law School and Adam Levitin at Georgetown University Law Center, along with Deepak Gupta, founding principal of the Gupta Wessler law firm in Washington, DC. Gupta was senior litigation counsel and senior counsel for enforcement strategy at the CFPB back in the days when Elizabeth Warren was setting up the fledgling agency. “Viewed holistically, the CFPB is a highly accountable agency,” the trio said....
In another unusual, unexpected development in the legal wrangling between the CFPB and PHH Corp. over alleged violations of the Real Estate Settlement Procedures Act, the U.S. Department of Justice, now under the direction of the Trump administration, has asked permission of the court for a few minutes of its time to present its case. Oral arguments in the case, before the U.S. Court of Appeals for the District of Columbia Circuit, are scheduled for May 24, 2017. The court has allocated 30 minutes per side for arguments. In an unopposed brief filed earlier this month with the USCA, the DOJ asked for 10 minutes of argument time. “The United States agrees with petitioner PHH Corp. that the for-cause removal ...
Community lending representatives met with Trump administration officials last week to push a package of pro-growth, regulatory relief proposals, including a number of changes to the mortgage rules promulgated by the CFPB. The meeting was held with Treasury Department officials under President Donald Trump’s executive order directing the Treasury to review existing laws, treaties, regulations, guidance, reporting and recordkeeping to determine if they promote or inhibit federal regulation of the U.S. financial system as per Trump’s core principles outlined in Executive Order 13772. Meeting with the Trump administration officials were a handful of CEOs of bank that are members of the Independent Community Bankers of America.Among the proposed changes the trade group advocated was a more expansive qualified mortgage ...