Despite the fear expressed by consumer advocates that CFPB Acting Director Mick Mulvaney might give financial service industry participants a “get out of jail free” card upon request, the bureau recently filed a motion in opposition to the request of Nationwide Biweekly Administration, a biweekly mortgage payment company, to alter, amend or vacate the prior judgment against the firm. This past September, the CFPB won one and lost one in a ruling from the U.S. District Court for the Northern District of California in the case. The agency won a $7.9 million civil penalty from the defendants. However, it lost out on $74 million in sought-after restitution. The bureau also originally insisted the defendants post a bond, even though that ...

The CFPB has decided to abandon its pursuit of a group of payday lenders it had accused of misleading consumers about the true extent of the costs associated with its loans, which purportedly carried interest rates as high as 950 percent a year. The agency gave no explanation about its decision to reverse course. An interesting twist is that payday lenders are generally regulated at the state level, and since the lenders in this case happen to be associated with a Native American tribe, they can argue that state laws do not apply to them. Payday Lending Rule Kaput? Also last week, the CFPB indicated it might just deep-six its controversial payday lending rule. “Jan. 16, 2018, is the effective ...

The House Financial Services Committee last week advanced a number of bills for a vote by the full House, including legislation that would expand the qualified mortgage box for smaller entities and exempt many institutions from the rules and regulations issued by the CFPB. One of the bills passed was H.R. 2226, the Portfolio Lending and Mortgage Access Act, introduced by Rep. Andy Barr, R-KY. The measure would amend the Truth in Lending Act to allow certain mortgage loans that are originated and retained in portfolio by an insured depository institution or an insured credit union with less than $10 billion in total consolidated assets to be considered as qualified mortgages. Then there was H.R. 1264, the Community Financial Institution ...

Some top compliance attorneys are optimistic that the CFPB under Acting Director Mick Mulvaney, or another President Trump appointee, will provide greater regulatory relief and clarity for lenders, and an easing of enforcement activity. Included in that mix could well be a return to the more traditional interpretation the Department of Housing and Urban Development had for the Real Estate Settlement Procedures Act. Gerald Sachs, formerly senior counsel for policy and strategy at the bureau and now a partner with the Venable law firm in Washington, DC, told Inside the CFPB recently he anticipates that “mortgage rules would be amended or revised to lessen the regulatory burden, clarify industry concerns or issues, and allow more access to credit.” In addition, ...

It’s likely that mortgage lenders and servicers will get some degree of consideration and accommodation from the CFPB during the Trump administration, thanks to some reviews the bureau is required to make of its major rulemaking as per the Dodd-Frank Act. “The Dodd-Frank Act requires the CFPB to look back and conduct an assessment of each significant rule not later than five years after its effective date,” said former CFPB official Benjamin Olson, now a partner in the Washington, DC, office of the Buckley Sandler law firm, during a webinar last week sponsored by Inside Mortgage Finance. The purpose of this assessment is to look at the effectiveness of the rule in meeting its purposes and objectives under the statute ...

Consumer complaints to the CFPB about mortgage-related issues are on the verge of a free-fall, with volumes dropping by double digits, quarterly and annually, in every category tracked, according to a new analysis and ranking by Inside the CFPB. For starters, total gripes fell 15.9 percent from the third quarter of 2017 to the fourth quarter, and by 27.8 percent year over year. Digging into specific kinds of complaints, criticisms about loan modifications mirrored those trend lines, dropping 15.3 percent from 3Q17 to 4Q17, and by 29.2 percent on an annual basis. When it came to mortgage servicing, consumer kvetching was on a parallel track, down 13.0 percent and 26.4 percent, quarter over quarter and year over year, respectively. In ...

The game-changing ability-to-repay mortgage lending rule from the Consumer Financial Protec-tion Bureau took effect four years ago this month. At that time, regulators said there would be plenty of mortgage lending outside the parameters of the qualified-mortgage box. So far, however, that ex-pectation has yet to be realized.

The Federal Reserve Board last week wrapped up enforcement actions against 10 banks and im-posed fines against five of them after “sustainable improvements” in their servicing operations.

VA lenders may use third-party vendors to verify borrower income, employment and asset information subject to certain conditions, according to the Department of Veterans Affairs. Officials issued the clarification in response to lender inquiries regarding the use of third parties to determine if a borrower qualifies for a VA loan. The agency said it would accept third-party verifications if lenders are fully responsible for verifying the accuracy of information the borrower provided in the loan application. Lenders must initiate and receive all verifications of employment and deposits, requests for credit reports, and credit information. When a real estate broker/agent or any other party requests information regarding borrower income, employment or personal assets, the lender must identify the requester as its agent and ensure that any report is returned directly to them. In addition, the lender must disclose the ...

Ginnie Mae is redefining the term “defective mortgage” to remind issuers of their obligations when confronted by a mortgage that does not have federal insurance or guarantee. The action also clarifies options issuers may consider in dealing with defective mortgages. Under their guarantee agreement with Ginnie, issuers are required to cure, buy out or replace single-family mortgages or manufactured home loans that are missing the requisite FHA insurance or VA or U.S. Department of Agriculture guarantee within 120 days after the issue date of the mortgage-backed securities. Ginnie made clear that mortgages that do not have federal insurance or guarantee by the deadline for final certification of the related pool or loan package are defective. In addition, mortgages that have been rejected by FHA, VA or USDA, or for which federal insurance or guarantee have been withdrawn, are defective as ...