With speculation mounting that CFPB Director Richard Cordray could be out the door as early as the Labor Day weekend, the CFPB late last week announced it is amending the 2015 updates to the Home Mortgage Disclosure Act rule. The bureau has temporarily changed reporting requirements for banks and credit unions that issue home-equity lines of credit, and clarified the information that financial institutions are required to collect and report about their mortgage lending. Under the rules that are scheduled to take effect January 2018, financial institutions would have been required under HMDA to report HELOCs if they made 100 such loans in each of the last two years. The final rule issued this past Thursday increases that threshold to ...

Legal liability in the context of the so-called black hole in the CFPB’s TRID integrated disclosure rule remains a source of much anxiety for mortgage lenders, according to experts such as Rod Alba, senior vice president of mortgage markets, financial management and public policy for the American Bankers Association. “For lenders in general, [the biggest concern] is simply the liability that results from allowing the transaction to be negotiated until the last minute,” he said last week in an interview. “We don’t like telling the consumer, ‘You’re now three business days from closing; we can no longer negotiate and you must go through on this deal.’ That’s not pleasant.” Alba continued: “The consumer may say, ‘Well, no, that chimney has ...

The CFPB and the other members of the Federal Financial Institutions Examination Council last week issued new examiner transaction testing guidelines for all financial institutions that report under the Home Mortgage Disclosure Act. The rules will apply to the examination of HMDA data collected starting in 2018 and reported beginning in 2019. The guidelines eliminate the file-error resubmission threshold under which a financial institution would have to correct and resubmit its entire Loan Application Register (LAR) if the total number of sample files with at least one error reached or exceeded a certain threshold, the bureau said. They also establish allowable tolerances for certain data fields for the purpose of counting errors toward the field-error resubmission threshold.Additionally, they provide ...

Campaign for Accountability, a self-styled watchdog organization, recently filed a Freedom of Information Act request with the CFPB to find out what actions the agency has taken to hold Clayton Homes and its mortgage lending subsidiary, Vanderbilt Mortgage, accountable for alleged predatory lending practices.Clayton Homes, based in Maryville, TN, is one of the nation’s largest mobile home sellers, and is owned by Warren Buffett’s Berkshire Hathaway. Said Campaign for Accountability Executive Director Daniel Stevens: “Clayton Homes appears to have been preying on some of our most vulnerable citizens. As the company expands its footprint to reach more Americans, it is imperative to know whether the government found any wrongdoing and, if so, what actions were taken.” The watchdog group...

In the age of the CFPB, mortgage servicers have been walking a tightrope, balancing regulatory compliance with borrower satisfaction, sometimes getting stung by an enforcement action. This year, they are falling behind the curve in terms of their customers, according to the results of the 2017 U.S. Primary Mortgage Servicing Satisfaction Study from J.D. Power. “CFPB servicing regulations now in place are resulting in intense scrutiny as well as major fines for some institutions during the first waves of enforcement,” the data, analytics and advisory services provider said. “With other state and federal agencies, such as the Department of Justice and state attorneys generals, also taking actions against mortgage servicers for servicing practices, many experts expect intense regulatory scrutiny to ...

There may be plenty of uncertainty about the direction of the CFPB these days, given that Republicans are calling the shots on Capitol Hill and at the White House, plus the fact that Richard Cordray’s days as director of the bureau are numbered, regardless of when he actually ends up departing. Still, mortgage servicers can continue to expect robust supervision and regulation – and enforcement –if not from the bureau, then from another federal regulator, as well the states, and maybe all of the above, according to Steven Frie and Mark Shannon, top servicer analysts at S&P Global Ratings. “It’s been pretty common knowledge that the CFPB has been very active in regards to regulating the mortgage servicing industry,” Frie said ...

The CFPB recently filed a complaint and a proposed settlement against what’s left of Aequitas Capital Management and related entities, all of which are based in Lake Oswego, OR, accusing the firms of aiding the allegedly predatory lending behavior of Corinthian Colleges, now defunct. The complaint against Aequitas and its affiliates was filed in U.S. District Court, District of Oregon, Portland Division.“The bureau brings this action against Aequitas for its abusive acts and practices in connection with private loans made to students at Corinthian Colleges, which were funded or purchased by Aequitas,” the CFPB said. “By funding these private loans, Aequitas enabled Corinthian to present a façade of compliance with federal laws requiring that a certain portion of a ...

Simplifying and aligning the default servicing policies of the conventional conforming and the government-backed mortgage markets would better serve the mortgage industry and homeowners, according to industry experts. In a recent discussion on how regulatory burden and high servicing costs might impede lending, members of the Mortgage Servicing Collaborative agreed on the need for streamlined and harmonized federal, state and agency policies and rules on servicing. Increased regulatory requirements have caused mortgage-servicing costs to skyrocket in recent years, experts said. Even though the quality of servicing has improved, the new regulations are complex and costly, they noted. Multiple pressures placed upon servicers have suppressed mortgage lending, making it harder for borrowers with tainted credit to obtain a mortgage, according to the ...

Wells Fargo and PHH Mortgage have reached separate settlements with the Department of Justice and three other federal agencies to resolve alleged violations of the False Claims Act. The DOJ, Department of Housing and Urban Development, Department of Veterans Affairs and the Federal Housing Finance Agency will rake in $182 million from the settlement of lawsuits involving FHA and VA loans, as well as loans sold to Fannie Mae and Freddie Mac. Wells Fargo denied the allegations in the whistleblower lawsuit but agreed to pay $108 million to resolve the claims. It admitted to no fault or liability. Filed in 2006 and unsealed in 2011, the lawsuit alleged that the bank overcharged veteran borrowers by masking ineligible fees in order to obtain VA guarantees on certain Interest Rate Reduction Refinancing Loans, or streamlined refi mortgages. At the same time, Wells allegedly falsely certified to the VA that it ...

The private mortgage insurance industry has called for harmonized qualified-mortgage standards to discourage potential arbitrage that might adversely affect consumers. In a comment letter, the U.S. Mortgage Insurers urged the Consumer Financial Protection Bureau to assess whether the various QM standards established under the Dodd-Frank Act have created arbitrage opportunities to the detriment of consumers. The CFPB is about to begin a reevaluation of its ability-to-repay rule/QM rule. QM standards are different for Fannie Mae, Freddie Mac and the Federal Home Loan Banks than for FHA, VA and the U.S. Department of Agriculture. The USMI said analysis should focus on the different treatment of points and fees and maximum borrower debt-to-income ratio among the various QM standards. The CFPB can address the calculation of points and fees under its ATR/QM rule by ...