The Consumer Financial Protection Bureau is pushing full-speed ahead with its probe of the mortgage industry’s use of captive reinsurance by directing PHH Corp. to comply with an earlier civil investigative demand – the functional equivalent of a subpoena – within three weeks, brushing aside the company’s numerous objections. “PHH’s petition to modify or set aside the CID in this matter is denied,” CFPB Director Richard Cordray ruled last week. “Within 21 days of this decision and order, PHH is directed to produce all responsive documents, items and information within its possession, custody or control that are covered by the CID.” Cordray added that PHH is...

Fannie Mae and Freddie Mac support the Consumer Financial Protection Bureau’s proposal to institute a higher “all in” annual percentage rate calculation that would incorporate additional fees and charges – one aspect of the larger proposed rule to combine and simplify the consumer mortgage disclosure under the Truth in Lending Act and the Real Estate Settlement Procedures Act. “Fannie Mae and Freddie Mac support the bureau’s proposal to expand the finance charge for several reasons,” the two government-sponsored enterprises said. “First, it will make comparison shopping easier for consumers by eliminating the lack of clarity that now leads creditors to treat identical fees differently.” Second, a more inclusive finance charge will eliminate...

The Small Business Administration is urging the Consumer Financial Protection Bureau to delay making any changes until it has fully analyzed the impact of a proposed rule establishing new disclosure requirements and forms under integrated federal consumer protection regulations. Speaking on behalf of small banks and settlement service providers, the SBA’s Office of Advocacy in a comment letter warned that proposed changes to the finance charge and to the high-cost mortgage coverage test could potentially lead some small businesses to leave the marketplace or stop making mortgage loans. In addition, the agency reiterated its concerns about the inadequate notice for small entities about the proposal. On Aug. 23, the CFPB published...

Secondary mortgage market participants have expressed support for the Consumer Financial Protection Bureau’s efforts to establish clear standards for mortgage servicing that would balance investor and borrower interests. Issued last week, the proposed rules focus primarily on borrower protection and are described as measures that would benefit borrowers by eliminating surprises and run-arounds. However, they do not address servicers’ conflicts of interest that result in servicer breaches, which mortgage-backed securities investors have raised in the past, and other investor complaints. Specifically, the proposed rules implement...

The Consumer Financial Protection Bureau late last week issued its long-awaited proposal to establish national mortgage servicing standards for banks and nonbanks alike, extending a number of key aspects of the big national servicing settlement to the entire industry in the process. The proposed rule covers nine major topics and would implement changes made by the Dodd-Frank Act to the Truth in Lending Act and the Real Estate Settlement Procedures Act. The proposed rule generally requires servicers of closed-end residential mortgage loans (other than reverse mortgages) to send a periodic statement for each billing cycle, and the CFPB’s proposal spells out the timing, form and content requirements of such statements, and includes sample forms that servicers can use. Special rules will apply...

The Consumer Financial Protection Bureau has been feeling the heat over the size of its proposed rule to streamline and integrate the disclosures consumers get when taking out a home loan, so agency officials engaged in a little bit of push-back last week in an effort to fend off the criticism. The push-back started early in the week during a hearing of the House Small Business Committee, during which Rep. Scott Tipton, R-CO, took issue with the rulemaking’s size that exceeded 1,000 pages in draft form, a fraction of which is new...

American International Group, MGIC Investment, Genworth Financial and Radian Group have been served with subpoenas by the Consumer Financial Protection Bureau, the firms said in public filings last week, as the bureau is apparently probing to determine if the mortgage insurance companies transferred billions in M.I. premiums to the banks that made the mortgages. PHH Corp. made a similar disclosure back in January. The CFPB’s subpoenas, known as Civil Investigative Demands, indicate that the bureau’s enforcement...

One of the many concerns mortgage lenders have with the powerful and still largely untested Consumer Financial Protection Bureau is the expanded standard of “unfair, deceptive and abusive acts and practices” created by the Dodd-Frank Act – and how the CFPB is going to enforce it. Unfortunately, they’re more likely to learn about it on the fly during the examination process than they are in advance through careful, formal rulemaking or supervisory guidance, according to one of the presenters during an Inside Mortgage Finance webinar last week on the CFPB’s regulatory and supervisory landscape. “What I think you’re seeing develop here is examination beyond regulation, and the CFPB’s examination authority and supervision authority goes beyond...

Consumer Financial Protection Bureau Director Richard Cordray this week sought to allay the concerns of some members of Congress that small businesses in the mortgage industry and other sectors are about to be overwhelmed by regulatory overload. One of the main issues in this regard being considered by the House Small Business Committee is the CFPB’s recent proposal to integrate and simplify the consumer disclosures mandated by the Truth in Lending Act and the Real Estate Settlement Procedures Act. “Our committee is interested in how the regulations will affect...

The semiannual regulatory agenda released last week by the Consumer Financial Protection Bureau indicates the regulators have a very full plate and a tight January 2013 deadline. That means mortgage lenders will be just as busy trying to figure out what the new rules mean and how to comply with them. The most recent high-profile mortgage-related projects at the bureau include a detailed proposed rule to harmonize and streamline the mortgage disclosures that homebuyers must be given under the Real Estate Settlement Procedures Act and the Truth in Lending Act. In draft form, this one proposal ran more than 1,000 pages in length and has already raised industry hackles. Comments on the rule are due Nov. 6, 2012. The bureau also released...