CFPB May Review Lender-Paid MI. Pricing on lender-paid mortgage insurance policies has come down over the past several months, apparently spurring the CFPB to take a look at what’s going on behind the curtain. Citing industry officials who claim to have knowledge of the situation, Inside Mortgage Finance, an affiliated publication, reported late last week that the powerful consumer regulator may focus on whether there is some kind of quid pro quo going on between lenders and mortgage insurers. In particular, the CFPB is interested in the discounting of LPMI in exchange for a lender sending more of its MI business to an insurer and whether such a practice violates the Real Estate Settlement Procedures Act, the newsletter reported. In ...

Mortgage servicer Ocwen Financial, the target of a state enforcement action for allegedly mishandling distressed borrowers, said it would delay its regulatory 10-Q filing because of an impairment charge on Ginnie Mae servicing rights. The impairment was caused by a 50 basis point cut in the FHA’s annual mortgage insurance premium, which took effect in January, the servicer said. Although it had expected a $34.4 million profit in the first quarter of 2015, Ocwen took a $17.8 million impairment charge, which included monitoring costs, “strategic advisor expenses,” and fair-value adjustments. FHA lowered the annual MIP to enable more borrowers to obtain an FHA-insured single-family mortgage loan with a 3.5 percent downpayment. Ocwen would likely lose money if it sold off its government-backed MSRs, according to one servicing advisor. Last fall, Ocwen tried to sell its ...

Making mortgage payments is the most common type of mortgage complaint active servicemembers, veterans or their dependents report to the Consumer Financial Protection Bureau. A recent CFPB report on the top complaints received from military members and their families show that 24 percent were mortgage-related, second to debt collection, which accounted for the highest percentage of complaints received, 39 percent. An estimated 53 percent of servicemember complaints involved mortgage servicing related to loan modifications, collections and foreclosures. The report did not identify any specific loan, although it covered both conventional and government-backed mortgages. Complaints against servicers were mostly about failure to remove or amend derogatory credit reports accrued by servicemembers during the trial period, even though the servicemembers have successfully ...

The Department of Agriculture’s Rural Housing Service has issued a final rule creating a certified loan-application packaging process for the agency single-family loan guaranteed housing program.Published in the April 29 Federal Register, the rule also establishes standards for packagers of loan applications, who are independent from RHS but play a key role in providing Section 502 rural home loan programs to potential homeowners. The final rule will take effect on July 28, 2015. Specifically, the rule addresses the weaknesses in RHS’ loan-application process and integrates the lessons learned from a loan-packaging pilot launched in 2010. The packager gathers and submits the information needed for RHS to determine whether a loan applicant is eligible for ...

State regulators are seeking comments regarding a number of potential changes to the Nationwide Multistate Licensing System and Registry licensing forms and the mortgage call report. Among other issues, state regulators are working to continue state adoption of the MCR as the sole activity reporting requirement for state-regulated lenders. About 14,500 companies fill out the MCR each quarter, detailing originations and other metrics. The State Regulatory Registry, which operates nationwide systems for state regulators, said compliance with the MCR remains a concern. “Compliance has steadily improved...

In another display of multijurisdictional cooperation, the CFPB and the Maryland Attorney General last week brought an enforcement action against a Maryland-based title company and its executives, alleging they participated in a mortgage kickback scheme, trading cash and marketing services in exchange for referrals. The complaint names Genuine Title, LLC, as well as Jay Zukerberg, Brandon Glickstein, Gary Klopp, Adam Mandelberg, William Peterson, and Angela Pobletts, along with a number of limited-liability companies controlled by certain defendants. The CFPB and Maryland allege that Zukerberg and Glickstein developed and operated schemes to give loan officers marketing services and cash payments in exchange for referrals of title work. The kickback schemes violated the Real Estate Settlement Procedures Act, which prohibits giving a ...

Last week, in the first such enforcement action of its kind – and as a warning shot across the bow of all financial institutions under its jurisdiction – the CFPB slapped Regions Bank with $7.5 million in fines for charging overdraft fees to consumers who had not opted-in for such coverage. “The 2010 opt-in rule made clear that consumer protection in this area is critical. That Regions Bank violated the law raises definite concerns worthy of note by all depository institutions,” said Cara Petersen, the CFPB’s deputy enforcement director. “Their customers should rest assured that the consumer bureau is here to protect them when it comes to the hard-earned money they keep in their checking accounts.” The depository institution, based in Birmingham ...

Green Tree Servicing entered into a $48 million legal settlement with the CFPB and Federal Trade Commission last week after being accused of botching loan modifications on servicing transfers and harassing and threatening overdue borrowers. In addition to coughing up the $48 million, the nonbank will pay an additional $15 million penalty for what the CFPB called its “illegal” actions. The settlement, ironically, came just a few days after Green Tree – a subsidiary of the publicly traded Walter Investment – was given top grades by Fannie Mae for customer service and foreclosure prevention activities. To make amends, not only must the company compensate borrowers, but it will face “rigorous servicing transfer” requirements from regulators. In a statement on the settlement, the ...

The mortgage industry has just under 100 days until the do-or-die deadline of August 1 kicks in for compliance with the CFPB’s integrated disclosure rule under the Truth in Lending Act and the Real Estate Settlement Procedures Act, otherwise known as the TRID. And as the new lending environment approaches, industry anxieties are getting stronger and more specific in nature. “The primary concerns that I am hearing are about the inability to reset the fee tolerances when the closing date is significantly delayed, which many fear will require lenders to start over and scuttle closings, and the lack of guidance for wholesale lenders who work with brokers,” said Benjamin Olson, counsel in the Washington, DC, office of the BuckleySandler law ...

The CFPB has compelled Fort Knox National Co. and its subsidiary, Military Assistance Co. (MAC), to pony up $3.1 million in relief to harmed service members to resolve allegations that the military allotment processor did not clearly disclose various recurring fees, which could total $100 or more. The military allotment system enables U.S. military personnel to deduct payments directly from their paychecks. The allotment system was created to help deployed members of the U.S. military send money home to their families and pay their creditors at a time when automatic bank payments and electronic transfers were not yet common bank services. Creditors, such as auto lenders, installment lenders and retail merchants, have in recent years been known to direct servicemembers ...