The mortgage servicing rule proposed earlier this year by the Consumer Financial Protection Bureau could easily be exploited to bring any foreclosure proceeding to a grinding halt, according to a leading mortgage industry attorney. If the rule is promulgated as currently written, that could cause mortgage lenders, who are already skittish about future losses, buyback demands and a host of other pending regulations, to pull back even further when it comes to providing mortgage credit. “The consequence of these regulations is to create...
Some mortgage lenders will be able to develop and test, on a limited basis, their own consumer disclosures, under a proposed policy issued last week by the Consumer Financial Protection Bureau. The disclosures would have to be approved by the bureau before being used. “The bureau believes that there may be significant opportunities to enhance consumer protection by facilitating innovation in financial products and services and enabling companies to research informative, cost-effective disclosures,” the CFPB said. “The bureau also recognizes that in-market testing, involving companies and consumers in real world situations, may offer particularly valuable information with which to improve disclosure rules and model forms.” The Dodd-Frank Act gave...
In a development that might catch the attention of officials at the CFPB who are working on improving consumer disclosures under the Real Estate Settlement and Procedures Act and the Truth In Lending Act, more evidence has emerged that consumers aren’t very big on using TILA forms to comparison shop for mortgages.A new study from Fannie Mae found that nearly half of lower‐income respondents and more than a third of higher‐income respondents get quotes from only one mortgage lender. The survey also confirms findings in other reports that “a substantial portion of all consumers do not understand key mortgage elements.”
In what may prove to be the first of many announcements dealing with the January 2013 mandate for changes under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB has decided to give the mortgage lending industry extra time to implement certain new required consumer disclosures. Per the CFPB’s announcement in a new final rule, mortgage lenders will not be required to provide those disclosures until after the bureau’s other previously proposed mortgage disclosure rules are finalized...
Mortgage lenders say they support the CFPB’s overall effort to integrate and simplify the consumer disclosures required under the Truth in Lending Act and the Real Estate Settlement Procedures Act, but they’re also urging the bureau to proceed at a more deliberate pace when it comes to implementing such integration. In a public comment letter to the bureau, the Mortgage Bankers Association made three overarching points, the first of which is that the agency should continue to focus its energy on the enormous job of...
Mortgage lenders of all sizes and stripes got some breathing room late last week when the Consumer Financial Protection Bureau announced it was delaying the effective date of some new requirements under its integrated mortgage disclosure project to provide a more seamless integration with other mortgage disclosures the agency has proposed. The delay applies to more than a dozen disclosures, including those on the cancellation of escrow accounts, consumersf liability for debt payment after foreclosure, and the creditor acceptance of partial payment. Under the Dodd-Frank Act, the new disclosures were scheduled to take effect Jan. 21, 2013. gTo avoid potential consumer confusion and reduce compliance burden for industry, the bureau plans...
Four associations representing state financial regulators told the CFPB they generally support most of what the bureau is proposing in integrating the disclosures consumers receive when they shop for a mortgage. However, they emphasized the importance of proceeding cautiously as the bureau moves ahead with the proposed rules that would amend the mortgage disclosures under Regulation Z, which implements the Truth in Lending Act, and Regulation X, which implements the Real Estate Settlement Procedures Act...
The Consumer Financial Protection Bureau has found “significant non-compliance” during its examinations of mortgage lenders, compelling them to take a variety of steps deemed necessary to be brought into compliance, according to the CFPB’s first report on its examination findings. Violations under the Real Estate Settlement Procedures Act included failures to make proper and complete disclosures to consumers of costs and other terms because of errors in the good faith estimate and HUD-1 settlement statement, the CFPB stated. Truth in Lending Act violations included...
The mortgage lending industry is universally opposed to a Consumer Financial Protection Bureau proposal to establish a new, more comprehensive “all in” annual percentage rate formula that would include various additional fees and charges. The APR provision is one part of the CFPB’s extensive proposed rule intended to simplify and integrate the mortgage disclosures consumers are entitled to under the Truth in Lending Act and Real Estate Settlement Procedures Act. The overhaul was mandated by the Dodd-Frank Act. In the proposed rule, which came out in July, the bureau would replace...
The “zero-zero” requirement in the loan originator compensation proposed rule pending at the Consumer Financial Protection Bureau could inadvertently steer borrowers into more expensive mortgage loans, according to a top industry official. “There is absolutely no doubt that forcing a zero-zero option is going to result in higher-priced loans,” said David Stevens, president and CEO of the Mortgage Bankers Association, during an Inside Mortgage Finance webinar this week. “Premium [loans] don’t get the same kind of multiple as a current coupon. So as the yield curve shifts and we see rates move, we’re going to see action that is going to make these numbers move around a lot.” To give a more extreme example, “if we have an interest-rate rally, you can drop...
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