The housing market has been fairly stable in 2016, but industry insiders say decreased affordability and credit access could impede the multiyear housing recovery. With interest rates lower than expected, the Mortgage Bankers Association raised its 2016 origination forecast to $1.60 trillion in May from its January projection of $1.38 trillion. It expects purchase originations to increase in 2017 and 2018, thanks to economic growth and a strong job market. But many first-time homebuyers may be...

The mortgage industry and secondary-market investors continue to struggle with uncertainty over the degree of liability for errors in complying with the Consumer Financial Protection Bureau’s integrated-disclosure rule, commonly known as TRID. Many hope the pending TRID 2.0 rulemaking expected from the CFPB this July will clarify and resolve the exasperating ambiguity and at least let industry participants and investors know exactly where they stand and what risks they are taking on. One of the most important areas for investors is contractual liability. “Under most mortgage loan purchase agreements, there is a representation and warranty for absolute compliance [or] a signed agreement saying that you’re only liable for material violations,” said Richard Horn, a Washington, DC, attorney. Speaking at this week’s American Bankers Association conference, the former CFPB official said, “But whatever the agreement, you still have contractual liability for the loans that you sell, so keep that in mind.” Civil liability is...

FHA lenders will face stiffer maximum monetary penalties later this year for various violations of agency rules and regulations. The higher monetary penalties are the result of legislation signed into law late last year requiring federal agencies to adjust the current maximum penalty amounts for inflation in order to maintain their deterrent effect. Specifically, the Federal Civil Penalties Inflation Adjustment Act of 2015 (2015 Act) requires federal agencies to adjust the level of civil monetary penalties with an initial “catch-up” adjustment through an interim final rule and subsequent annual adjustments for inflation. The interim final rules with the initial penalty adjustments must be published by July 1, 2016. The new penalty levels must take effect no later than Aug. 1, 2016. Additionally, agencies are required to make annual inflation adjustments, starting Jan. 15, 2017, and for each year going forward. The adjustments will ...

Mortgage lending industry representatives were told to keep their expectations in check when it comes to the forthcoming TRID integrated-disclosure rulemaking from the Consumer Financial Protection Bureau, which is expected sometime this summer, perhaps as early as late July. “Everybody in the industry cheered when the bureau announced this,” attorney Richard Horn, the former CFPB official who led the development of the TRID rule, said this week during a panel discussion at the American Bankers Association’s regulatory compliance conference in San Diego. “I think...

The Consumer Financial Protection Bureau plans to develop another rule to resolve some of the mortgage industry’s problems with the CFPB’s integrated disclosure rule may provide some psychological relief for lenders. But it’s certainly not solving any of the problems they are struggling with right now, problems that continue to emerge as the months since implementation roll on. Among the host of concerns that have sprung up related to the Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure Rule – TRID – is the raft of issues having to do with settlement agents. Delivering a presentation at the American Bankers Association’s regulatory compliance conference this week, Richard Horn, a former CFPB official, said...

In a letter sent to CFPB Director Richard Cordray, the National Association of Realtors asked the agency to clarify that mortgage originators can share the closing disclosure (CD) form with third parties “if the lender receives a consent form from the consumer.” The trade group noted that, before the TRID rule was implemented, real estate agents aided their clients by answering questions about the HUD-1 and by reviewing terms agreed to in the sales contract, such as concessions, escrows, commissions and shares of prorated taxes.

According to investors in scratch-and-dent TRID mortgages and traders who play in the space, auctions of mortgages with errors (of all sorts) have continued apace ever since the CFPB announcement on TRID 2.0 rulemaking in early May and show little sign of slowing down. At the same time, the TRID mortgage disclosure rule appears to be less of an obstacle for the jumbo mortgage-backed securities market these days as JPMorgan Chase prepares a deal that will include residential loans subject to the rule.

Fannie Mae recently provided sellers with a little more guidance on its expectations related to lender self-reporting of errors in complying with the CFPB’s new disclosure regime under the Truth in Lending Act and the Real Estate Settlement Procedures Act.

The 11th annual Xerox Path to Paperless Survey finds what appears to be an accelerated pace toward making the paperless mortgage a reality. And the CFPB’s integrated disclosure rule known as TRID is apparently helping.

The so-called TRID-lock seen in the jumbo MBS market since October appears to be easing as both Redwood Trust and JPMorgan Chase have come to market with deals that include some loans with compliance problems. Before this week, only one jumbo MBS included mortgages subject to TRID, a deal from Two Harbors Investment in March. Many industry participants blamed...