President Trump Friday morning signaled his intent to nominate former regulator Pamela Patenaude to be the next deputy secretary of the Department of Housing and Urban Development. According to a bio listed on the White House website, Patenaude is president of the J. Ronald Terwilliger Foundation for Housing America’s Families. She also served as HUD assistant secretary for community, planning and development during the George W. Bush administration. Patenaude’ s nomination had been expected for some time. She is expected to play a key role in shaping housing policy in the new administration and brings to the table a depth of knowledge about the industry. HUD Secretary Ben Carson was a career brain surgeon with little in the way of housing and mortgage experience. Meanwhile, industry lobbyists contend the White House continues to vet candidates for two other ...

The CFPB last week filed a massive civil damage case against top-ranked mortgage servicer Ocwen Financial, accusing the nonbank and its subsidiaries, Ocwen Loan Servicing, LLC, and Ocwen Mortgage Servicing, Inc., of “failing borrowers at every stage of the mortgage servicing process.” The agency alleges that Ocwen’s “years of widespread errors, shortcuts and runarounds cost some borrowers money and others their homes.” Ocwen allegedly botched basic functions like sending accurate monthly statements, properly crediting payments, and handling taxes and insurance. The agency added that Ocwen also illegally foreclosed on struggling borrowers, ignored customer complaints, and sold off the servicing rights to loans without fully disclosing the mistakes it made in borrowers’ records. Among the CFPB’s major allegations was that the ...

The CFPB was not alone in its crackdown last week on Ocwen Financial over its alleged mortgage servicing failures and violations. The same day the bureau announced its action, Florida Attorney General Pam Bondi and Office of Financial Regulation Commissioner Drew Breakspear filed a federal civil consumer protection lawsuit against Ocwen and subsidiaries, Ocwen Loan Servicing, LLC, and Ocwen Mortgage Servicing, Inc., for what they called “mortgage servicing misconduct.” According to the complaint, Ocwen harmed citizens of the Sunshine State by filing illegal foreclosures, mishandling loan modifications, misapplying mortgage payments, failing to pay insurance premiums from escrow and collecting excessive fees. Ocwen services roughly 125,000 home mortgages in the state. The complaint, filed in federal court in West Palm Beach, ...

Ocwen Financial, stung by legal actions brought simultaneously last week by the CFPB and scores of state regulators, responded by issuing a detailed statement disputing the allegations made by state regulators and defending its business practices. “As with the recent CFPB enforcement action, Ocwen strongly disputes the key allegations made in the state regulators’ cease-and-desist orders that Ocwen’s mortgage loan servicing practices have caused substantial consumer harm,” the company said. “Ocwen will not sign unfair and unjust consent orders that make impractical demands that no other market participant could rationally accept, and which would harm consumers,” it added. “Under these circumstances, Ocwen has a responsibility to its customers, shareholders and employees to vigorously defend the company against unfounded claims while ...

The CFPB has put out a proposed rule to help mortgage lenders comply with the updates it made to the Home Mortgage Disclosure Act regulation back in 2015, most of which haven’t even taken effect yet. “The Home Mortgage Disclosure Act shines a much-needed spotlight on the mortgage market, which is the largest consumer financial market in the world,” said CFPB Director Richard Cordray. “Today’s proposal reflects the bureau’s ongoing and substantive engagement with stakeholders in the marketplace, and will help industry meet its new reporting obligations.” Among the suggested alterations in the agency’s proposed rule is the clarification of certain key terms, such as “temporary financing.” The CFPB wants to amend the commentary to the current final rule to ...

Industry representatives thanked the CFPB for making an effort to facilitate compliance with the pending Home Mortgage Disclosure Act final rule, most of which takes effect Jan. 1, 2018. However, the fact that revisions are being offered at all is a sign that the bureau just cannot get it right, according to some officials. Anne Canfield, executive director of the Consumer Mortgage Coalition, said her membership always appreciates any effort any of the regulators make to improve a regulation. “However, the CFPB’s proposed amendments to its HMDA regulation falls far short of what is needed,” she said. One of the CMC’s concerns is that since the bureau has not identified what it intends to do with the data, how does ...

The Trump administration’s Department of Justice has convinced the U.S. Court of Appeals for the District of Columbia Circuit to grant it 10 minutes to present its unusual case when oral arguments are heard in the upcoming en banc proceedings in PHH Corp. v. CFPB. “Upon consideration of the unopposed motion of the United States for leave to participate in oral argument, it is ordered that the motion be granted,” the appeals court said in its one-page order. PHH Corp. et al., as petitioners will have 30 minutes to make their case, as will the CFPB as respondent. “The United States agrees with petitioner PHH Corp. that the for-cause removal provision is unconstitutional, but agrees with the CFPB that the ...

House Financial Services Committee Chairman Jeb Hensarling, R-TX, last week released a detailed discussion draft of his pending revised Financial CHOICE Act that would extensively revise the mortgage regulatory landscape. Issues of interest to the mortgage industry include manufactured housing, the definition of points and fees, a qualified-mortgage safe harbor for loans held in portfolio, regulatory relief for community banks, transitional licensing for loan originators, Home Mortgage Disclosure Act records maintenance and disclosure requirements, and HMDA data privacy. There would be some drastic changes made to the CFPB, too, most notably the elimination of its rulemaking, supervisory and enforcement authority and its market monitoring functions and turning it into a law enforcement agency. Other CFPB-related changes include: Changing the name ...

The Conference of State Bank Supervisors urged the leadership of the Senate Banking, Housing and Urban Affairs Committee to enact legislation that would grant qualified-mortgage status under the CFPB’s ability-to-repay rule for loans held in portfolio, as part of a broader set of proposals to stimulate economic growth. The CSBS was one of a number of groups that responded to an invitation by the banking committee to provide ideas for stimulating economic activity. “State regulators have long supported a flexible approach to underwriting for institutions that retain mortgages in portfolio because interests are inherently aligned between consumers and lenders that retain 100 percent of the risk of default,” said the CSBS. “One solution that would tailor the requirement to the ...

The CFPB’s latest fair lending report to Congress, quietly distributed earlier this month, indicates that two mortgage issues will stay on the agency’s front burner: redlining and servicing. On the redlining front, the CFPB said it will “work to evaluate whether lenders have intentionally discouraged prospective applicants in minority neighborhoods.” When it comes to servicing, the bureau indicated it will “determine whether some borrowers who are behind on their mortgage … payments have more difficulty working out a new solution with the servicer because of their race, ethnicity, age, or gender.” The agency continued: “We are committed to ensuring fair, equitable and nondiscriminatory access to credit by finding and eliminating discriminatory lending practices, and also by encouraging lenders to maintain ...