CFPB Updates Model Disclosures Under Fair Credit Reporting Act . The CFPB last week issued an interim final rule updating two model disclosures to reflect changes made to the FCRA by the recent Dodd-Frank reform act.The Economic Growth, Regulatory Relief, and Consumer Protection Act, which became law in May, requires nationwide consumer reporting agencies to provide “national security freezes” free of charge to consumers. The [Includes three briefs] ...

House Financial Services Committee Chairman Jeb Hensarling, R-TX, unveiled long-awaited legislation on government-sponsored enterprise reform that would enhance Ginnie Mae’s role in the secondary mortgage market. Hensarling referred to the bill – the Bipartisan Housing Reform Act of 2018 – as a “bipartisan compromise housing-reform plan” that preserves the government guarantee in the secondary mortgage market. The chairman collaborated with Rep. John Delaney, D-MD, in crafting the bill, which calls for the repeal of the federal charters of Fannie Mae and Freddie Mac. The bill would shift the secondary market to a system that allows pooling of qualified conventional mortgages backed by government-approved private guarantors with regulated capital. These loans could be pooled in mortgage-backed securities with explicit government guarantees provided by Ginnie. The new MBS program would be ...

The Rural Housing Service of the U.S. Department of Agriculture has proposed changes to its single-family housing guaranteed loan program to help certain lenders navigate the loss-claim process. Specifically, the RHS proposes to streamline the loss-claim process for lenders that have acquired title to property through voluntary liquidation or foreclosure. Under current rules, when a lender acquires title to a real estate-owned property, the RHS requires the lender to submit a plan to maintain and market the property. Any change to the plan must be approved by RHS. RHS also provides the lender two opportunities to file a loss claim on an REO property: When the property sells during the permissible marketing period, or after the period (typically from nine to 12 months) if the REO property does not sell. The agency proposes to make changes to the loss-claim payment process when a lender acquires ...

Big Four accounting firm Deloitte has paid $149.5 million to the federal government to settle allegations of misconduct in connection with its role as the independent outside auditor of defunct FHA lender Taylor, Bean & Whitaker. The settlement amount includes $115 million in restitution paid to the Department of Housing and Urban Development on Aug. 13, 2018, according to the HUD inspector general. The rest of the payment went to the Department of Justice, which brought the charges on behalf of the government. Deloitte admitted neither to any liability nor to wrongdoing. TBW was an FHA direct endorsement lender and a Ginnie Mae-approved mortgage-backed securities issuer and servicer. It originated, underwrote, acquired and sold mortgages to Freddie Mac and other investors, which used the loans to support MBS issuance or held them as investments. In its heyday, TBW was one of the ...

Problems with rating models that prompted corrections on more than 650 residential MBS in recent years helped lead to a settlement between Moody’s Investors Service and the Securities and Exchange Commission.

Industry participants and the Treasury Department want the Federal Communications Commission to change its rules to help servicers communicate with borrowers without the threat of costly fines.

Any changes to the Community Reinvestment Act should strengthen – not weaken – banks’ obligations to meet the needs of minority and low-income communities and expand access to mortgage credit in historically redlined areas, said civil rights and consumer advocacy groups.

The Urban Institute advocates dropping the debt-to-income cap for qualified mortgages to level the playing field between the government-sponsored enterprises and the private market.

The CFPB in the Trump era is likely to abandon or limit the use of the disparate-impact theory in enforcing fair lending laws, said attorneys. “Given the lack of ‘effects’ language in [the Equal Credit Opportunity Act] and the [CFPB’s] stated focus on enforcing statutes as they are written, we expect that they will determine that ECOA does not support a disparate-impact theory,” said Jeffrey Naimon, a partner at Buckley Sandler. Under the disparate-impact theory ...

The CFPB late last week issued a rule to clarify partial HMDA exemptions for small financial institutions ushered in under the Dodd-Frank reform act. The Economic Growth, Regulatory Relief, and Consumer Protection Act, signed into law in May, exempts depositories – including credit unions – that originated fewer than 500 closed-end mortgages or 500 open-end lines of credit in each of the two preceding calendar years from certain expanded reporting ...