The majority of higher-priced first-lien loans in 2014 were FHA-insured, according to the latest Home Mortgage Disclosure Act data. Approximately 45 percent of FHA-insured, first-lien purchase mortgages had annual percentage rates in excess of the reporting threshold, similar to the percentage in the latter half of 2013, the Federal Financial Institutions Examination Council noted. Higher-priced loans are those with APRs that exceed the average prime offer rate by at least 1.5 percentage points for first-lien loans and at least 3.5 percentage points for subordinate-lien loans. The data on the incidence of higher-priced lending show that about 8 percent of first-lien purchase loans originated in 2014 have APRs that exceed the loan-price reporting thresholds, up from about 5 percent in 2013, the FFIEC said. The higher APRs for FHA loans were due to a slight increase in ... [ 1 chart ]
VA loan servicers have until Nov. 1, 2015, to review and comment on the new VA Servicer Handbook and ensure compliance with the established policy and guidelines. The servicer handbook combines guidance issued via circulars and news flashes over the years. In addition, the agency has started hosting biweekly servicer calls to update VA servicers on policy changes and new developments, according to Andrew Trevayne, assistant director of loan management with the VA Home Loan Guaranty Program. VA-guaranteed loans are serviced through the VA Loan Electronic Reporting Interface (VALERI) system. The handbook also discusses roles and responsibilities for VA loan-administration staff and servicers. It does not change or supersede any regulation or law affecting the loan program. Servicers may submit comments on the updated handbook to ...
The FHA has a number of rulemakings in the regulatory pipeline and other policy topics related to mortgage origination and servicing, all lined for action in the fall. The program changes are geared towards FHA single-family priorities, such as expanding first-time homebuyers’ and underserved creditworthy borrowers’ access to credit, ensuring the long-term viability of FHA Mutual Mortgage Insurance Fund and making it easier to do business with the FHA. Agency data show that, as of July 31, 2015, first-time homebuyers accounted for 82 percent of FHA purchase loans compared to 72 percent in the prior year. FHA officials attributed the surge in purchase loans to the half percentage point reduction in the annual mortgage insurance premium, which they translated into a yearly savings of $900 for a household with an average mortgage-loan size of $180,000. On Sept. 15, the ...
Ginnie Mae has announced revised rules for issuers seeking approval of changes in their business status due to an adversarial relationship with agencies, mergers, asset transfers or a change in ownership or control. The agency has been receiving many issuer requests and they are getting complicated, according to Ted Tozer, Ginnie Mae president. Issuers must comply with the updated guidance in order to remain an eligible participant in the Ginnie Mae mortgage-backed securities program. The guidance took effect immediately. Previously, issuers were required to notify Ginnie Mae in writing within five days of any material adverse change in their business relationships with Fannie Mae, Freddie Mac, FHA, VA, Rural Development, the Department of Housing and Urban Development’s Office of Public and Indian Housing or any other regulatory agency. Under the revised guidance, the ...
It looks like the mortgage industry is on the verge of obtaining another concession from the Consumer Financial Protection Bureau regarding enforcement of its pending integrated disclosure rule. The rule will streamline the consumer disclosures required under the Truth in Lending Act and the Real Estate Settlement Procedures Act. This TILA/RESPA Integrated Disclosure rule is slated to take effect Oct. 3, 2015, and will create a new regulatory regime – and perhaps a good bit of havoc in the process, at least in the short term. The anxiety over the confusion and expected delays has prompted...
The Consumer Financial Protection Bureau has issued a final rule to allow more lenders to qualify as smaller creditors doing business in rural and underserved areas. The final rule, which takes effect Jan. 1, 2016, amends certain mortgage rules issued by the CFPB in 2013 under the Dodd-Frank Act. Specifically, the final rule lifts the current origination limit to qualify for “small creditor” status from 500 mortgage loans annually to 2,000 mortgage loans per year – a limit that also excludes loans retained in portfolio from the 2,000-loan cap. In addition, the rule now includes...
The nation’s subservicing specialists increased their contracts by a modest 4.4 percent on a sequential basis in the second quarter of 2015, a sign that many originators would rather outsource the nitty-gritty chore of loan processing to others instead of doing it in house. Compared to the same period a year earlier, subservicing grew a more impressive 20.5 percent to $1.410 trillion, according to exclusive survey figures compiled by Inside Mortgage Finance. The increasing complexity and compliance cost of servicing make...[Includes one data table]
The CFPB is committed to helping the mortgage industry fully implement the pending TILA/RESPA Integrated Disclosure (TRID) rule to the maximum extent possible, and its examination approach will focus on being “diagnostic” and “corrective,” not “gotcha” oriented, a top bureau official said during an industry conference early this week. Speaking at the Mortgage Bankers Association’s 2015 regulatory compliance conference in Washington, DC, Diane Thompson, managing counsel in the bureau’s Office of Regulations, tried to reassure anxious lender representatives about the industry’s transition to a dramatically different lending environment under the new regulatory regime. “We understand that this is a major change ... that we are not going to flip some magic switch on Oct. 3 and the world will suddenly ...
As the pending Oct. 3, 2015, effective date for the CFPB’s integrated disclosure rule approaches, both the bureau and industry groups issued last-minute guides and other materials to help various sectors comply as effectively as possible. The rule is intended to harmonize and integrate the disclosures required under the Truth in Lending Act and the Real Estate Settlement Procedures Act; hence the term “TRID,” an acronym for the more formal TILA/RESPA Integrated Disclosure rule. Last week, on the lender front, the bureau released three supervisory publications that have been updated to reflect the new TRID effective date. They include the interagency TILA and RESPA examination procedures, developed in coordination with the members of the Federal Financial Institutions Examination Council Consumer ...
The CFPB recently brought enforcement actions against two large debt buyers and collectors, Encore Capital Group, in San Diego, and Portfolio Recovery Associates, in Norfolk, VA, accusing the companies of using deceptive tactics to collect bad debts. The bureau said the companies bought debts that were potentially inaccurate, lacking documentation or unenforceable. “Without verifying the debt, the companies collected payments by pressuring consumers with false statements and churning out lawsuits using robo-signed court documents,” said the CFPB. In terms of the companies’ allegedly illegal litigation practices, the CFPB accused the pair of misrepresenting their intention to prove debts they sued consumers over. They also allegedly sued or threatened to sue consumers past the statute of limitations. Further, the companies allegedly ...