More than 68 percent of mortgage defects reported in 2016 involved TRID-related and/or loan package documentation issues, according to the latest mortgage quality control industry trends report from ACES Risk Management (ARMCO). “In 2016, the entire lending industry was impacted by the enhanced regulatory oversight of the CFPB as the long-awaited implementation of TRID was fully realized,” the report noted. “Many lenders spent the better part of the first quarter addressing the multitude of mistakes associated with TRID.” In some instances, this produced loans that could not be sold on the secondary market. “A wave of corrective action followed, and soon the sheer amount of resources directed at solving these issues became overwhelming for many lenders,” ARMCO added. The top...

Third-party oversight is becoming more of a focus of regulators these days, according to some top compliance professionals, and one of the most important emerging themes is an increasing regulatory emphasis on staff expertise. “This is something that [all the regulators] are thinking about,” Krista Shonk, vice president and senior regulatory counsel at the American Bankers Association, said during a presentation early last week at the ABA’s annual regulatory compliance conference in Orlando. Staff expertise includes things such as the ability to perform proper due diligence analysis and contract management and oversight.But personnel also need to avoid any attempts to transfer their institution’s inherent responsibility for compliance with laws and regulations. On the other hand, lenders should not put ...

There are three important trends in the consumer complaint space, each bearing important lessons for mortgage lenders, regardless of size or structure, according to top compliance experts. Speaking to an audience at the American Bankers Association’s annual regulatory compliance conference in Orlando earlier this week, Carol Hunley, deputy chief compliance officer at Ally Financial Services, detailed each of them and their significance for lender compliance. First, the lending environment is...

The most challenging aspect of complying with the pending amendments to the Consumer Financial Protection Bureau’s mortgage servicing rule will be implementing the successors-in-interest provisions, according to industry experts. Most of the revisions to the rule, issued last year by the CFPB, take effect Oct. 19, 2017. But the successor-in-interest requirements kick in April 19, 2018. Addressing an audience at the 2017 American Bankers Association regulatory compliance conference in Orlando this week, compliance professionals broke...

The Department of Veterans Affairs is seeking clearance for two information-collection forms that are crucial to a veteran’s ability to obtain or cure a VA-guaranteed mortgage loan. The Office of Management and Budget is currently reviewing the forms. The VA also has published notices in the June 1 Federal Register seeking public comment on the proposed revised forms. Comments for both notices are due July 3, 2017. The first form relates to information a veteran must provide to be exempted from paying a funding fee. Borrowers are required to pay a funding fee to obtain a loan with a VA guaranty, unless the borrower is a disabled veteran receiving VA compensation for his or her service-connected disability. Loans made to unmarried surviving spouses of veterans who have died in service or from a service-related disability also are exempted from payment of the funding fee (regardless of whether the ...

An industry trade group is requesting that the Consumer Financial Protection Bureau exclude reverse mortgages from the income-reporting requirement of the Home Mortgage Disclosure Act.The National Reverse Mortgage Lenders Association is seeking an exemption similar to the HMDA exemptions for rate spread; Home Ownership and Equity Protection Act status; origination charges; discount points; lender credits; total loan costs; points and fees; prepayment penalty term; and balloon payments. However, should the CFPB require income reporting on reverse mortgages, the NRMLA would want further guidance and clarification. Home Equity Conversion Mortgage loans make up over 99 percent of the reverse mortgage market today, and have not dropped below 85 percent since 1993, according to the group. NRMLA’s request is part of a broader comment on ...

Mortgage lenders say they need another year, at least, to prepare for all the new requirements they will confront under the Consumer Financial Protection Bureau’s revised Home Mortgage Disclosure Act rule. One of the biggest problems is that the industry is waiting for multiple actions to be completed by the bureau before it can fully implement the new changes and test compliance systems, the Mortgage Bankers Association said in a comment letter filed with the CFPB last week. Back in April, the bureau proposed...

The American Bankers Association’s letter to Secretary Treasury Steve Mnuchin also detailed a handful of key changes it said the CFPB should make to its controversial Truth-in-Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure (TRID) rule. First, the bureau ought to revise the TRID tolerances. Currently, the rule requires creditors to observe closing cost tolerances that prohibit fees from increasing beyond initial disclosures by specific amounts. “TRID’s cost tolerance system is extremely convoluted, operating under a three-prong tolerance system that contains uncertain exemptions and rules for corrections,” the trade group said. “ABA believes that the current tolerance system should be entirely eliminated and replaced with a single tolerance standard of 10 percent, with more focused applicability.”Under this proposal, a ...

The Mortgage Bankers Association called on the CFPB to delay the Jan. 1, 2018, effective date for its new and expanded data collection and reporting requirements under the Home Mortgage Disclosure Act.“Considering the fact that much remains to be done by the CFPB, including rules and deliverables, MBA respectfully urges the bureau to delay these amendments and the final rule for at least one year in order to provide the bureau and HMDA reporters with sufficient time to complete, implement and test their data collection and reporting processes,” the trade group said in a comment letter to the agency. The additional time “will allow several necessary actions and relevant materials to be delivered by the bureau in time for ...

Mortgage lenders in the U.S. seem to be in a better frame of mind when it comes to their ability to comply with new regulations and to operate in the post-election environment, according to a study from Lenders One, a cooperative of independent mortgage bankers, correspondent lenders and suppliers of mortgage products and services. “Lenders are ready for new regulatory requirements, such as updates to the Home Mortgage Disclosure Act, with two-thirds (65 percent) indicating they are very prepared for HMDA changes,” Lenders One said. However, the biggest HMDA compliance challenge for lenders involves the additional resources needed to report transactional data, such as home equity lines of credit and dwelling-secured loans for apartments, the survey found. “While lenders are ...