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 ...

The Mortgage Bankers Association has recommended steps to address the VA appraiser shortage and increased appraisal turn times. The industry group made its recommendations in a recent letter to Jeffrey London, executive director of the Department of Veterans Affairs’ Loan Guaranty Service, based on a roundtable discussion between MBA and other industry stakeholders in March. Stakeholders expressed their concern for the lack of VA appraisers and longer waiting periods for appraisal reports. Appraiser shortage is an ongoing problem for the VA, and has resulted in delayed loan closings, particularly in highly rural areas. Some states, like Oregon, have very few appraisers, the MBA pointed out.“This delay may force veterans to choose other loan programs to meet certain deadlines or face other adverse outcomes,” the MBA letter warned. On the other hand, the ...

The FHA will provide lenders that originate Home Equity Conversion Mortgage loans the option to view and print unsigned HECM counseling certificates in FHA Connection starting Sept. 18, 2017. While the lender may still take the initial loan application, the lender can only begin to process it once the counseling is complete, as evidenced by a completed HECM counseling certificate that contains signatures of both the counselor and borrower. Lenders that chose to use this option will be required to establish procedures to obtain and document authorization from the HECM borrower to access the counseling certificate in FHA Connection. In addition, lenders must certify that a borrower authorization to view the counseling certificate was obtained. Lenders must follow the guidance on processing HECM loans contained in the HUD Handbook, the FHA said. To access HECM counseling certificates, lenders will ...

An official from the CFPB confirmed late last week the agency is looking into the massive data breach at Equifax, widely seen as the most significant, and potentially most damaging, so far in the age of the Internet. A spokesman for the bureau told this newsletter, “The CFPB has authority over the consumer reporting industry, including supervisory and enforcement authority. The CFPB is authorized to take enforcement action against institutions engaged in unfair, deceptive or abusive acts or practices, or that otherwise violate federal consumer financial laws. We are looking into the data breach and Equifax’s response, but cannot comment further at this time.” However, it’s not just the occurrence of the breach that bothers the consumer regulator. As part ...