In remarks that “sure sounded like a campaign speech,” according to one long-time industry compliance attorney, CFPB Director Richard Cordray threw the mortgage industry under the bus, accusing it of causing the financial crisis and the Great Recession that followed. Two weeks ago, Cordray delivered the keynote address at the Ohio Land Bank Conference in Cleveland, the same day the Democrat Party primary debate for the Ohio gubernatorial race was held. Some political observers were watching to see if the director would give his speech, resign and then appear in the debate. They were disappointed.But that doesn’t mean Cordray won’t resign before his term ends in July to pursue a run for the governor’s mansion. He has until 4 p.m. ...

The CFPB got a split verdict in a recent ruling from the U.S. District Court for the Northern District of California in its legal tussle with Nationwide Biweekly Administration, of Greene County, OH, which stood accused of engaging in deceptive practices by misleading consumers through its Interest Minimizer mortgage payment program. The bureau won a $7.9 million civil penalty from the defendants, but lost on $74 million in sought-after restitution. “After carefully considering the sufficiency, weight and credibility of the testimony of the witnesses, their demeanor on the stand, the documentary evidence admitted at trial, and the post-trial submissions of the parties, the court finds that CFPB has adequately shown that some, but not all, of defendants’ challenged marketing statements ...

The CFPB’s much-criticized arbitration rule issued earlier this year took effect last week, as a successful vote in the Republican-controlled House of Representatives to overturn it failed to generate enough interest and support for a comparable move in the Senate. It’s likely that the massive Equifax data breach and the company’s seeming attempt to manipulate affected individuals to waive their rights to arbitration in order to sign up for free credit-monitoring services effectively killed what little interest senators may have had in following up on the House’s success. The failure is another blow to a political party that ostensibly controls the Senate, the House and the White House but is struggling to accomplish much legislatively, thanks in part to the ...

It Looks Like New HMDA Requirements Will Proceed. Earlier this year, the mortgage industry made a concerted push for either the CFPB, or failing that, Congress, to delay implementing all the new data collection and reporting requirements lenders will face under the Home Mortgage Disclosure Act regime.... Feds to Amend CRA Regs to Conform to CFPB’s HMDA Changes. The Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency on Wednesday issued a joint notice of proposed rulemaking to amend their respective Community Reinvestment Act regulations, mostly to conform to the changes the CFPB made to Regulation C, which implements the Home Mortgage Disclosure Act....

Lenders with better-than-average origination practices tend to produce mortgages with less default risk across different loan products, according to a new study sponsored by the Mortgage Bankers Association. “Managing Mortgage Product Development Risk” focuses on several key issues in risk layering, including the morphing of loan products designed for one type of borrower to a different population, and the added risk of sloppy processing systems. The paper, authored by Clifford Rossi ...

Lawsuits arising from violations of the Telephone Consumer Protection Act have increased tremendously over the last couple of years and technology has been trying to stem the tide. By all accounts, TCPA litigation is out of control, wrote Charles Insler, an attorney in the St. Louis office of Hepler Broom, in an analysis of TCPA litigation trends earlier this year for the American Bar Association. Quoting from a 2016 opinion from the Seventh Circuit, Insler noted that TCPA litigation has ...

Much of the historical discussion about the mortgage industry going fully digital and adopting e-mortgages has revolved around cost savings, greater efficiencies, validating compliance and other benefits. But at the end of the day, the biggest reason is that lenders’ customer base is increasingly focused on digital technology, and lenders need to go where the borrowers are. “That’s where the consumers are, right? Finally, everybody’s going online to shop for most of their products, and mortgages are starting to happen the same way,” said Tim Anderson, director of eServices for DocMagic, during a webinar last week sponsored by Inside Mortgage Finance. “They’re going out there looking for rates and pricing, they’re looking for real estate. If you want to capture that marketplace, you meet them out there in cyberspace.” Scott Stephen, president of the online division of Guaranteed Rate, noted...

Although flood insurance is required for Fannie Mae and Freddie Mac loans in designated flood areas, the recent hurricane activity in Houston and Florida has revealed that a number of borrowers didn’t have the coverage they were supposed to have. But getting to the root of the disconnect is complicated. Both government-sponsored enterprises said that it’s up to servicers to evaluate whether loans are in compliance with flood insurance requirements. But Fannie and Freddie said they also have their own systems in place to help ensure compliance. “Servicers are required...

Issuers of ABS are utilizing diverse structures to comply with the risk-retention requirements of the Dodd-Frank Act, according to a new sector commentary by analysts at Moody’s Investors Service. “Although securitization sponsors’ retention of portions of their own deals in general is credit positive … the rules have effectively just formalized prior common industry practices for many consumer ABS subsectors. This confirms our initial stance that the rules are only marginally credit positive for this sector,” said Vice President and Senior Analyst Yan Yan and Vice President and Senior Credit Officer Jingjing Dang. “That said, the methods of compliance that have emerged among ABS asset classes since the rules went into effect in December have varied.” Their first take-away is...

Rapid, aggressive refinancing of VA loans has made a comeback with some issuers using strategies to mask the practice and avoid possible penalties, including expulsion from the Ginnie Mae program, according to a top agency official. Responding to concerns raised by Sen. Elizabeth Warren, D-MA, Michael Bright, acting Ginnie Mae president and chief operations officer, said a joint Ginnie Mae/VA lender-abuse task force is analyzing monthly data and developing additional policy measures to deal with the problem. Bright confirmed the resurgence of inappropriate streamline refinancing in Ginnie securitization pools in recent weeks and has promised to crack down on the questionable practice. The problem surfaced last year when Ginnie Mae noticed unusually fast prepayment speeds in its mortgage-backed securities, particularly MBS backed by VA loans. Ginnie found that certain lenders and ...