The CFPB, much to the lending industry’s consternation, last week “went live” with the online publishing of more than 7,700 consumer complaint narratives addressing mortgages, bank accounts, credit cards, debt collection and other issues. Under its new final policy statement, the bureau is extending its existing practice of disclosing data on consumer complaints “to include narratives for which opt-in consumer consent is obtained and a robust personal information scrubbing standard and methodology has been applied.” The purposes of the database include providing consumers with timely and understandable information about financial products and services, and improving the functioning, transparency and efficiency of markets for such products and services. The CFPB said that adding additional information to the database, and hearing narratives ...

The CFPB last week formally proposed amending its integrated mortgage disclosure rule under the Truth in Lending Act and the Real Estate Settlement Procedures Act – the so-called TRID – to move the rule’s effective date to October 3, 2015, which would give the industry a two-month delay. Although the TILA-RESPA final rule was published on December 31, 2013, and received widespread public and Congressional attention, the bureau said it “recently discovered that it inadvertently had not submitted the rule report to Congress as required.” The bureau’s oversight came despite having 18 months to anticipate and plan for the submission. “Immediately upon discovering its error, the bureau submitted the rule report to both Houses of Congress and the Government Accountability Office on ...

Here’s a fair lending regulatory compliance tip from the American Bankers Association’s 2015 regulatory compliance conference in Washington, DC: If you are advertising or marketing mortgage products in Spanish, you would be well advised to provide all requisite disclosures and servicing in Spanish. “As you think about how to reach people, advertising and marketing in Spanish is a good way to get to Spanish-speaking population,” said Andrew Sandler, chairman and executive partner at the BuckleySandler law firm, during a breakout session on fair lending. “But one thing regulators are intent on is, if you’re selling me in my language, then you need to be servicing me in my language too. So lenders should be careful to think about that,” the ...

The CFPB’s latest supervisory report finds illegal mortgage servicing practices are still continuing in at least corners of the marketplace. According to the report, the bureau’s examiners found at least one servicer that sent notices of intent to foreclose to borrowers already approved for trial modifications. “This dual-tracking could mislead consumers to believe the servicer had abandoned the trial modification,” the CFPB said. Bureau examiners also found at least one servicer that, because of a system error, sent notices to borrowers who were current on their loans, saying that foreclosure would be imminent. There are also still problems with illegal runarounds with loss mitigation applications, according to the report. For example, examiners found at least one servicer requesting additional documents ...

Regulators such as the CFPB are still paying attention to fair lending issues these days, but their focal point is shifting more towards greater emphasis on access to credit. “What we’re seeing is a pendulum swing from the focus of concerns being loan pricing, to the focus of concerns being loan access,” said Jeffrey Naimon, a partner in the Washington, DC, office of the BuckleySandler law firm, during a webinar last week sponsored by Inside Mortgage Finance, an affiliated publication. Many wonder why it appears that access to credit remains so tight, seven years after the last financial crisis. Naimon said the CFPB ability-to-repay rule’s qualified mortgage standard could be one of the reasons. “Basically, lenders only want to make ...

DocMagic Says It Will be Ready for TRID, Delay or No Delay. Industry vendor DocMagic, Inc., based in Torrance, CA, announced recently that the CFPB’s proposed delay in implementing the TILA-RESPA Integrated Disclosure (TRID) rule will have no bearing on its plans to be ready to meet the bureau’s originally planned Aug. 1 due date. “The CFPB only stated that they will be issuing a ‘proposed amendment’ to delay the rule to Oct. 1, which means it could possibly finalize a shorter time period,” said Rich Horn, TRID legal advisor to DocMagic and former senior counsel and special advisor at the CFPB. Horn led the production of the 1,888 page final TRID rule and the design and consumer testing of ...

A recent ruling by the New York Court of Appeals regarding the statute of limitations for representation-and-warranty claims on non-agency mortgage-backed securities has caused concerns for some participants in the new-issue jumbo MBS market. In ACE Securities v. DB Structured Products, the court ruled that the statute of limitations for claims of breaches of reps and warrants starts when a deal is closed, not when a potential breach is discovered. Lawyers involved in non-agency MBS were divided on how the ruling would impact issuance going forward ...

Clearer FHA guidance on loan defects may help lenders avoid problems but they do not provide legal protection against costly government false-claim lawsuits, according to mortgage industry stakeholders. Long-anticipated rules issued recently by the FHA explain how the agency intends to categorize loan defects identified during an individual loan-level review of endorsed single-family mortgages. The loan-defect assessment methodology or “defect taxonomy” was first unveiled in September 2014 as part of the FHA’s Blueprint for Access, which outlined steps the agency is taking to expand lending to underserved and first-time homebuyers. Combined with the updated loan-certification language used by lenders to warrant compliance with FHA rules and the new Single Family Policy Handbook, FHA plans to use the taxonomy to create a stronger quality assurance program. With better quality ...

The frequently-asked-questions guidance to using the FHA’s consolidated Single Family Policy Handbook is good to have though it shows just how complicated the FHA’s mortgage origination process is, according to lenders. In fact, the updated FHA handbook could still be confusing to borrowers simply because a lot more information is concentrated in one source, lenders said. According to the FHA, the more than 290 FAQs will enable lenders to make operation adjustments before the handbook goes into effect on Sept. 14, 2015. The FAQs are for information purposes only and do not apply to current FHA policies. They do not establish or modify policy contained in the handbook. The FAQs reiterate information in the handbook under headings such as Credit Underwriting, Closing and Insuring, FHA System Support and Consumer Information. Industry observers noted that the FAQs did not ...

Basel III capital requirements for mortgage servicing assets started to take effect in the first quarter of 2015, with full implementation slated for 2018. Smaller banks were impacted by new servicing capital rules much more so than larger banks in the first quarter, according to industry analysts. Previously, a bank’s servicing could contribute up to 50 percent of a bank’s total capital. Under the new Basel framework, mortgage servicing assets are limited to 10 percent of a bank’s common equity Tier 1 capital. MSA in excess of the 10 percent threshold must be deducted from common equity. “Despite the fact that changes to servicing capitalization have been telegraphed to the market as early as 2010, a disproportionate number of small banks appear...