As the CFPB prepares to do the Dodd-Frank Act required assessment of its 2013 mortgage servicing rule under the Real Estate Settlement Procedures Act, one industry trade group has urged the bureau to provide servicers with more regulatory guidance and clarifications of the current rule. The Consumer Mortgage Coalition said in a letter to the regulator that it has appreciated the opportunity to work with the bureau as it developed the final servicing requirements. “However, as the CFPB is aware, the final regulatory requirements are very prescriptive, yet unclear, and sometimes conflict with other statutory or regulatory requirements,” said the CMC. “In some areas of the regulation, the CFPB misunderstood the reason for the problems it was trying to solve ...

If Republicans in Congress are as successful in overturning the CFPB’s arbitration rule as they have been in canning the Affordable Care Act, various sectors of the financial services market could face a great deal of legal risk, according to one top attorney. “The irony here is that CFPB enforcement is frequently a factor in preventing private class-action litigation,” said Joseph Cioffi, chair of the insolvency, creditors’ rights and financial products practice group at the Davis & Gilbert law firm in New York City. “But this rule eliminating arbitration and the void left from President Trump’s moves toward deregulation can act like a supercollider for litigation against lenders, accelerating class actions and ricocheting through the credit markets.” He went on ...

If lawmakers and regulators are interested in bringing capital back to the private mortgage market and facilitating borrower access to credit in a responsible manner, they must make much-needed reforms to a handful of key mortgage rules promulgated by the CFPB, according to bond giant Pacific Investment Management Co. One recommended revision is eliminating the expansion of assignee liability for investors under the CFPB’s ability-to-repay rule. “Currently under the Dodd-Frank Act, mortgage investors are liable for mistakes made by lenders in the mortgage origination process for certain mortgage loans that are not deemed qualified mortgages,” said PIMCO. “Since investors have no role or discretion in the mortgage origination process, we believe this is not only nonsensical, but also has the ...

A handful of top industry trade groups again wrote to CFPB Director Richard Cordray urging him to delay implementation of the bureau’s new Home Mortgage Disclosure Act rules. “Although we greatly appreciate the CFPB’s work to facilitate implementation of this major data collection and reporting rule, the CFPB’s regulatory process and technological framework for this rule are still incomplete,” said the organizations. For one thing, proposed amendments to the rule are not yet finalized. “Moreover, the HMDA data reporting portals, geocoding tools, data validation, and rule edits are not yet issued,” the groups added. “All of these items are needed to ensure compliant business process and systems changes by the effective date.” Additionally, the CFPB has not yet initiated a ...

Rep. Maxine Waters, D-CA, and other Democrat members of the House Financial Services Committee recently released a detailed report in defense of the CFPB and its accomplishments in protecting consumers in the wake of the mortgage market collapse and the financial crisis that led to the Great Recession. “The consumer bureau has worked tirelessly to comply with its statutory mandate to ensure consumers are treated fairly, and that financial institutions are held accountable for predatory and other unscrupulous conduct,” the report said. According to the minority report, the CFPB has produced strong results, such as returning almost $12 billion to 29 million harmed consumers; implementing rules ensuring consumers have access to a fair and competitive marketplace; and requiring clear disclosures ...

As previously reported, the only area of mortgage-related consumer complaints that saw an increase in the second quarter was servicing, which saw a jump of 17.5 percent. But a deeper dive into the data shows a more complex and nuanced performance by the industry during that period of time, one perhaps dominated by extremes. As the chart on the following page illustrates, a handful of companies saw triple digit increases from the first quarter to the second, with Bayview Loan Servicing leading the way with a 152.6 percent surge. There was also a second tier of big increases in the upper double digits, led by TD Bank, which registered a leap of 90.9 percent...

Best Odds of Success in Making Consumer Complaint Data Confidential Rest With a New Director at the CFPB. Industry observers and lobbyists are increasingly of the view that the most likely way the industry will see the kind of substantive regulatory reform and relief it needs is not through federal legislation, but rather from a new director at the CFPB... ICYMI: The Financial CHOICE Act Would Exclude AMCs from Points and Fees Calculations. One overlooked provision in H.R. 10, the Financial CHOICE Act, which was passed by the House of Representatives on June 13, deals with residential mortgage appraisals...

Earlier this month, the U.S. District Court for the Western District of Kentucky ruled against the CFPB and in favor of a Kentucky law firm over allegations it paid kickbacks in violation of the Real Estate Settlement Procedures Act. The bureau accused the Borders & Borders law firm of Louisville, KY, and its principals, Harry Borders, John Borders Jr. and J. David Borders, of illegally paying kickbacks for real estate settlement referrals through a network of shell companies. The case began back in February 2011 when the Department of Housing and Urban Development notified the law firm it was being investigated for potential violations of RESPA’s anti-kickback provision. In April 2012, the CFPB advised Borders & Borders that it, rather ...

An internal watchdog audit alleges that the Department of Housing and Urban Development has been auctioning distressed notes to investors with no formal guidance or procedures in place. In a recent audit report, the HUD Office of the Inspector General said the department did not conduct rulemaking or develop standards for its single-family note sales program. The IG said it performed the audit due to the large amount of FHA claims paid on note sales as well as public concerns over the creation and administration of the program. In addition, the IG has never audited the program. In 2002, HUD referred to the initial note sales program as the Accelerated Claims Disposition Demonstration Program. The department later renamed it the Loan Sales Program, and subsequently to its current name: Distressed Asset Stabilization Program. DASP accepts assignment of eligible, defaulted single-family mortgage loans in ...

The Department of Housing and Urban Development’s lender disciplinary arm, the Mortgagee Review Board, has suspended a Pennsylvania FHA lender from originating or underwriting any new agency-insured loans. In addition, HUD’s enforcement center suspended owner John Seckel from doing business with the federal government. According to HUD, Seckle Capital of Newton, PA, and its owner submitted statements and certifications purporting to show the firm was properly audited by independent certified public accountants, when, in fact, it was not. The MRB said Seckel and his firm engaged in a “years-long pattern” of deceit and falsehoods. The action is the result of HUD’s ongoing effort to hold the mortgage industry accountable for the loans it originates, underwrites or services. According to HUD’s Neighborhood Watch website, Seckel Capital has a compare ratio of 164 percent. Of the 557 loans the ...