The CFPB more than doubled the amount of money it collected in civil penalties in fiscal year 2015 compared with FY 2014, $183.1 million versus $77.5 million, according to the bureau’s recently released FY 2015 financial report. Total cash collections in the fund from its inception, as of Sept. 30, 2015, amount to $342.14 million. Of that total, $190.12 million has been allocated to victim compensation. An additional $13.38 million has been allocated to consumer education and financial literacy programs, the default destinations of a certain amount of the penalties when victims can’t be found or identified, or when payment isn’t “practicable,” according to the bureau. Meanwhile, approximately $2.07 million has been used by the CFPB as an “administrative set-aside.” ...

State Mortgage Regulators Bring $10.2 Million Enforcement Action Against Prospect Mortgage. The Multi-State Mortgage Committee recently announced a $10.2 million settlement agreement and consent order between 50 state mortgage regulators and Prospect Mortgage over allegedly inappropriately assessed third-party settlement fees charged by an affiliate. According to the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators, a multi-state examination performed by eight states revealed a pattern of charging improperly disclosed and unsupported fees paid to the company’s affiliate, C2C Appraisal Services. Under the terms of the agreement, Prospect is to pay restitution to every borrower in all participating states that was assessed a C2C Settlement Service Fee in the amount of $40 with interest of 10 ...

Despite FHA’s denial of further mortgage insurance premium reductions any time soon, stakeholders are holding out hope for another cut in the near future. Those supporting the idea of another pricing adjustment say it could open the door wider for more borrowers to use the FHA single-family program and generate the volume needed to offset any potential revenue loss that may result from the reduction. But Housing and Urban Development Secretary Julian Castro and his top officials have denied any plans of reducing MIPs. Castro has called such talk “premature,” despite a positive FY 2015 actuarial evaluation of the FHA’s Mutual Mortgage Insurance Fund, which some claim could be used to justify another premium reduction. Principal Deputy Assistant Secretary for Housing and Interim FHA Chief Ed Golding, in a press briefing, said the focus is elsewhere and not on ...

Though the Department of Housing and Urban Development strongly highlighted the positive aspects of the FY 2015 actuarial report on the state of Mutual Mortgage Insurance Fund, it also downplayed the impact of the Home Equity Conversion Mortgage portfolio on the latest projections. FHA’s volatile HECM portfolio has had an unpredictable impact on the MMI Fund – a drag in some years and a boost in others. According to the report, the actuarial value of HECM capital has swung dramatically over the last four years and stood at $6.8 billion in FY 2015, up from negative $1.2 billion in fiscal 2014. The 6.44 percent spike in HECM gains helped boost the MMI Fund’s capital reserve ratio to 2.07 percent, in excess of the minimum 2.0 percent capital requirement. Excluding HECMs, the FHA fund – and the forward portfolio – would be at 1.6 percent, below the 2.0 percent threshold. The ...

New York financial regulators have barred VA lender New Day Financial from doing any more business in the state for allegedly cheating on state-required continuing-education courses and examinations. The New York Department of Financial Services slapped the Fulton, MD-based lender (also doing business as New Day USA) with a $1 million fine and ordered it to surrender its mortgage banker’s license. The department accused top New Day executives as well as current and former employees of perpetrating an elaborate cheating scheme whereby compliance staffers took the required education courses and exams on behalf of senior managers and loan officers. According to state regulators, the cheating happened on numerous occasions and involved at least 20 New Day loan originators. The MLOs shared screen-shots of questions included in the National Multistate Licensing System and Registry (NMLSR) exams and ...

The Department of Veterans Affairs has issued new guidance for submitting title documents to the VA when conveying a property in Florida. The servicing guidance addresses potential lien problems in relation to past due and unpaid homeowners association obligations. As part of conveying a property in the Sunshine State, documentation must be complete and in order so that VA can validate a clean title that will be acceptable to lenders, buyers, title companies and attorneys in the community where the property is located. Thus, property conveyance usually involves providing an owner’s title-insurance policy with no exclusions, other than for taxes that have not yet been billed but may be accrued against the property. Under Florida law, if an HOA is properly named in the foreclosure, a borrower or its assignees or successor-in-interest is only required to pay the lesser of either the ...

It may take Ginnie Mae a bit longer than expected to make all the accounting corrections necessary before the Department of Housing and Urban Development’s inspector general to render a clean opinion on the guarantor’s fiscal 2015 financial statement and its restated financials for FY 2014. In fact, Ginnie might have to make some significant long-term investments to address the IG’s accounting concerns, said Thomas Weakland, acting chief financial officer at Ginnie Mae. The agency may have to spend on new technology and infrastructure, and beef up its staff “spanning multiple years” to remediate all of the IG’s concerns, said Weakland. However, Weakland did not state a timeline for making all the necessary corrections and adjustments. Until the IG is fully satisfied with the restatement, it will continue to withhold an audit opinion. “We recognized some of the efforts made and the constraints that ...

Menendez Introduces HAWK Amendment in T-HUD Appropriations Bill. The National Association of Realtors recently sent a thank-you note to Sen. Robert Menendez, D-NJ, for introducing an amendment to H.R. 2577, the Transportation, Housing and Urban Development, and Related Agencies Appropriations Act of 2016, to restore HUD’s authority to offer the Homeowners Armed with Knowledge (HAWK) program. Lawmakers who were concerned about the financial condition of the FHA Mutual Mortgage Insurance Fund denied funding for the HAWK program last year in a continuing spending bill, effectively stalling the program for a year. The HAWK program is a key component of the FHA’s Blueprint for Access, which was designed to open up the credit box for underserved borrowers. Specifically, program participants will benefit from reductions in FHA premiums once they complete ...

With the mortgage lending industry’s use of marketing services agreements under the Real Estate Settlement Procedures Act likely hanging in the balance, the CFPB detailed its anti-kickback legal arguments against PHH Corp. and its mortgage units in its “reply” brief with the U.S. Court of Appeals for the District of Columbia, filed earlier this month. In PHH Corp., et al., v. CFPB, the first main argument the bureau made is that PHH violated RESPA Section 8(a) because it entered into agreements with mortgage insurers so that whenever an insurer received a referral from PHH, the insurer paid PHH a kickback in the form of premiums for mortgage reinsurance. “PHH thus committed a separate violation every time it accepted a kickback ...

The Office of the Comptroller of the Currency informed lenders recently it will soon start examining banks for their compliance with the Truth in Lending Act and Real Estate Settlement Procedures Act Integrated Disclosure rule, and issued some updated guidance to help institutions get ready. In OCC Bulletin 2015-42, the agency said during initial examinations for compliance with the rule, OCC examiners will be evaluating a bank’s compliance management system and overall efforts to come into compliance, “recognizing the scope and scale of changes necessary for each bank to achieve effective compliance.”Further, the OCC said, “Examiners expect banks to make good faith efforts to comply with the rule’s requirements in a timely manner. Specifically, examiners are considering the bank’s ...