Problems with rating models that prompted corrections on more than 650 residential MBS in recent years helped lead to a settlement between Moody’s Investors Service and the Securities and Exchange Commission.

Industry participants and the Treasury Department want the Federal Communications Commission to change its rules to help servicers communicate with borrowers without the threat of costly fines.

Any changes to the Community Reinvestment Act should strengthen – not weaken – banks’ obligations to meet the needs of minority and low-income communities and expand access to mortgage credit in historically redlined areas, said civil rights and consumer advocacy groups.

The Urban Institute advocates dropping the debt-to-income cap for qualified mortgages to level the playing field between the government-sponsored enterprises and the private market.

The CFPB in the Trump era is likely to abandon or limit the use of the disparate-impact theory in enforcing fair lending laws, said attorneys. “Given the lack of ‘effects’ language in [the Equal Credit Opportunity Act] and the [CFPB’s] stated focus on enforcing statutes as they are written, we expect that they will determine that ECOA does not support a disparate-impact theory,” said Jeffrey Naimon, a partner at Buckley Sandler. Under the disparate-impact theory ...

The CFPB late last week issued a rule to clarify partial HMDA exemptions for small financial institutions ushered in under the Dodd-Frank reform act. The Economic Growth, Regulatory Relief, and Consumer Protection Act, signed into law in May, exempts depositories – including credit unions – that originated fewer than 500 closed-end mortgages or 500 open-end lines of credit in each of the two preceding calendar years from certain expanded reporting ...

The Department of Treasury has signaled that the CFPB should work with other federal agencies and state regulators to create consistent mortgage servicing regulations across the industry. In a recent report on nonbank issues, Treasury expressed its concern regarding inconsistency in mortgage servicing regulations that could create compliance headaches for residential loan processors while increasing costs. “In light of that, the CFPB is taking the lead ...

Dozens of military and veteran groups are urging Acting CFPB Director Mick Mulvaney not to weaken military lending protections. Thirty-eight groups – including the National Military and Veteran Alliance, the Student Veterans of America, and the Air Force Sergeants Association – in late August sent a letter to Mulvaney and Defense Secretary James Mattis calling for continued strong enforcement and supervision of the Military Lending Act. “We urge you to stand with ...

The CFPB recently refused to set aside or modify a civil investigative demand filed against a debt collection company, the latest sign that the bureau is being tough in pursuing certain investigations, said attorneys.The CFPB filed two CIDs in 2017 under former Director Richard Cordray against Firstsource Advance regarding debt collection issues. The company then sought to set aside or modify the bureau’s second CID, but the agency denied the petition ...

It has been more than three years since FHA introduced a new streamlined process of identifying loan defects and their severity to minimize or avoid enforcement action and hefty penalties under the False Claims Act. Despite calls by the mortgage industry to improve and clarify the process – the Single-Family Loan Quality Assessment methodology or “defect taxonomy” – the FHA has yet to make a move to meet industry demands for more detailed defect taxonomy. Contacted for an update on the defect taxonomy, a Housing and Urban Development spokesperson said simply, “Nothing to report on this.” An outgrowth of lender concern over the government’s indiscriminate use of the FCA to prosecute mortgage fraud and recover FHA losses, the defect taxonomy establishes nine categories of loan defects in loans it endorses. The nine defect categories replaced the 99 loan defect codes that were ...