Will He? Won’t He? Run for Governor of Ohio, That Is. The top consumer regulator in the land, Richard Cordray, head of the CFPB, has until 4 p.m. Feb. 7, 2018, to file the necessary paperwork to run in the Ohio gubernatorial primary in May of next year. Current Republican Gov. John Kasich is term-limited and will have to vacate the governor’s mansion at the end of 2018.... CFPB Fines JPMorgan Chase $4.6 Million for Alleged Failures Related to Checking Account Screening Information. The CFPB recently brought an enforcement action against JPMorgan Chase Bank, alleging that it violated the Fair Credit Reporting Act by not having adequate policies in place regarding the accuracy of information it provided to nationwide specialty consumer reporting companies about individuals’ checking account behavior....

Industry groups representing lenders, real estate agents and insurance providers are urging the FHA to adopt a policy allowing borrowers to purchase private flood insurance on FHA-insured loans. In a recent letter, eight industry groups said FHA’s current stance of accepting only policies authorized by the National Flood Insurance Program contradicts Congress’ intent to encourage the use of private flood insurance and conflicts with current lender requirements. Congress is putting together a comprehensive legislative package of flood-insurance reforms, which would extend the NFIP for another five years and require lenders to accept private flood insurance to meet statutory flood-insurance requirements. The group said FHA’s current policy appears to conflict with lender requirements in the Biggert-Waters Flood Insurance Reform Act of 2012. A number of home-loan transactions have failed to ...

The private mortgage insurance industry urged the Consumer Financial Protection Bureau this week to consider including the qualified-mortgage standards of the FHA, VA and the U.S. Department of Agriculture in its assessment of the ability-to-repay/QM rule. In a comment letter, industry trade group U.S. Mortgage Insurers said it would be impossible to perform a full assessment of the ATR/QM rule without considering the different federal agency QM rules. If it does not expand the scope of its assessment, the CFPB should at least consider the impact the rules have on consumers in relation to the agency QM rules. In May, the CFPB notified stakeholders of its plan to evaluate the effectiveness of the ATR/QM rule in terms of its benefits and costs. Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, which established new standards for mortgage lending, including requiring lenders to assess consumers’ ability to repay. The statute also established a class of “qualified mortgage” loans that cannot have certain risky product features and are presumed to comply with the ATR requirement.

NewLeaf Wholesale has announced Property Assessed Clean Energy (PACE) guidelines for its FHA and VA mortgage products. PACE financing allows homeowners to retrofit their homes to make them more energy-efficient. The homeowner pays the loan as part of their property tax bill. In some states, PACE liens have superior status over all other liens, including a mortgage loan. A PACE assessment is a debt of property, where the obligation is tied to the property as opposed to the property owner. Hence, when the property is sold the new owner assumes the PACE lien. Last year, the FHA and VA issued guidance for approving purchase and refinance of mortgaged properties with PACE liens provided certain requirements are met. One requirement is that past due PACE loan amounts retain a first-lien position and this has raised some concern among industry groups that are opposed to ...

A property management contractor for the Department of Housing and Urban Development has agreed to pay $4.3 million to resolve allegations that it billed the agency for FHA-related work it did not perform in violation of the federal False Claims Act. Cityside Management Corp. of Manchester, NH, allegedly failed to inspect the work of third-party vendors that it hired to perform termite inspections, treatments and repairs on repossessed houses in HUD’s real estate-owned inventory, as required by its contract with HUD. HUD’s inspector general investigated the case and referred it to the Department of Justice. Following the financial crisis, HUD held title to a large number of foreclosed homes acquired by borrowers with FHA financing. HUD contracted with various field service managers, including Cityside, to prepare the REO properties for resale. According to the Office of the U.S. Attorney for the ...

The clock is ticking on the effective date of a host of new data collection and reporting requirements under the Home Mortgage Disclosure Act, and mortgage lenders are still waiting for the Consumer Financial Protection Bureau to complete some components of the rule necessary for full compliance. For this reason, the regulator should delay mandatory compliance much later than the scheduled January 2018 implementation date, industry trade groups said. “Although we greatly appreciate the CFPB’s work to facilitate implementation of this major data collection and reporting rule, the CFPB’s regulatory process and technological framework for this rule are still incomplete,” lender representatives said in a letter this week to the agency. Proposed amendments have not been finalized...

The CFPB plans to make some significant, but unspecified, changes to its mortgage servicing rule sometime this fall, in response to concerns raised by the industry, the bureau revealed in a blog posting about its latest semiannual rulemaking agenda, released earlier this month. The document is current as of April 1, 2017, and does not reflect the bureau’s issuance of its arbitration final rule, its assessments of its mortgage servicing rule under the Real Estate Settlement Procedures Act and its ability-to-repay rule, nor its proposed temporary increase in the institutional and transactional thresholds for home equity lines of credit. The agency said it is “considering concerns raised by industry participants regarding a few substantive aspects of the mortgage servicing rule ...

As the CFPB prepares to do the Dodd-Frank Act required assessment of its 2013 mortgage servicing rule under the Real Estate Settlement Procedures Act, one industry trade group has urged the bureau to provide servicers with more regulatory guidance and clarifications of the current rule. The Consumer Mortgage Coalition said in a letter to the regulator that it has appreciated the opportunity to work with the bureau as it developed the final servicing requirements. “However, as the CFPB is aware, the final regulatory requirements are very prescriptive, yet unclear, and sometimes conflict with other statutory or regulatory requirements,” said the CMC. “In some areas of the regulation, the CFPB misunderstood the reason for the problems it was trying to solve ...

If Republicans in Congress are as successful in overturning the CFPB’s arbitration rule as they have been in canning the Affordable Care Act, various sectors of the financial services market could face a great deal of legal risk, according to one top attorney. “The irony here is that CFPB enforcement is frequently a factor in preventing private class-action litigation,” said Joseph Cioffi, chair of the insolvency, creditors’ rights and financial products practice group at the Davis & Gilbert law firm in New York City. “But this rule eliminating arbitration and the void left from President Trump’s moves toward deregulation can act like a supercollider for litigation against lenders, accelerating class actions and ricocheting through the credit markets.” He went on ...

If lawmakers and regulators are interested in bringing capital back to the private mortgage market and facilitating borrower access to credit in a responsible manner, they must make much-needed reforms to a handful of key mortgage rules promulgated by the CFPB, according to bond giant Pacific Investment Management Co. One recommended revision is eliminating the expansion of assignee liability for investors under the CFPB’s ability-to-repay rule. “Currently under the Dodd-Frank Act, mortgage investors are liable for mistakes made by lenders in the mortgage origination process for certain mortgage loans that are not deemed qualified mortgages,” said PIMCO. “Since investors have no role or discretion in the mortgage origination process, we believe this is not only nonsensical, but also has the ...