A recent ruling by Florida’s Fifth Court of Appeal, if finalized, will affect any FHA foreclosure case that references the Department of Housing and Urban Development’s mandatory face-to-face interview with borrowers, according to industry attorneys. In Palma v. JPMorgan Chase Bank, Nat’l Ass’n, et al., the state appellate court found that HUD’s face-to-face interview requirement is “a condition precedent to foreclosure” for Florida mortgages that specifically incorporate the HUD regulation. Prior to the decision, no Florida appellate court has held that HUD’s requirement constitutes a condition precedent to foreclosure, according to attorneys with the Richmond, VA, law firm McGuireWoods. “Although this decision is not yet final and rehearing is likely, it has far-reaching impacts on the conditions and evidence required for foreclosure trials throughout Florida and is the ...

Appraisal-related issues cause more than one out of every 10 purchase-mortgage applications to be denied, according to CoreLogic. Below-contract appraisals comprised 11.3 percent of the first-lien purchase-loan appraisals ordered through the CoreLogic/FNC Collateral Management System, according to Yanling Mayer, director of research in CoreLogic’s office of chief economist. The CMS is a workflow and compliance platform used by many lenders, servicers and appraisal management companies. Mayer noted...

With rates at the highest they’ve been in 27 months, mortgage lenders have to make sure they keep their costs as low as possible to be competitive. At the same time, they have to retain and attract the most productive loan officers, while still staying within the bounds of the loan originator compensation rule from the Consumer Financial Protection Bureau. During a webinar sponsored by Inside Mortgage Finance this week, Paul Hindman, managing director at Grid Origination Services, said loan officer recruiting is not just about the Benjamins. “In no particular order, should they decide to explore, loan officers will evaluate and compare the following when assessing the right model match: company brand and culture ([including] mission, vision and values); compensation clarity, [and] loan products and consistent rates/pricing,” he said. Also important are...

PHH Corp. has until Dec. 22, 2016, to respond to an order by the District of Columbia Circuit Court of Appeals related to its battle with the CFPB over alleged violations of the Real Estate Settlement Procedures Act. The appeals court had directed the lender to reply to the bureau’s petition for an en banc rehearing of the recent ruling by a three-judge panel of the court. Back in October, the panel determined that two aspects of the CFPB’s structure – the dismissal of the director of the agency only for cause and the single directorship as opposed to a multi-member bipartisan commission – were unconstitutional. Additionally, the judges found in favor of the company’s arguments, among others, around the correct interpretations ...

Current and former Democrat members of Congress recently submitted a joint brief to the D.C. Circuit Court of Appeals in support of an en banc rehearing in the PHH Corp. v. CFPB case, including Dodd-Frank drafters and supporters, such as one of the bill’s namesakes, former Rep. Barney Frank, along with Sen. Elizabeth Warren, both from Massachusetts. The lawmakers argued that this case presents “a question of exceptional importance” and requires an en banc rehearing because the three-judge panel’s decision restructures the CFPB in a way that conflicts with Congress’s legislative plan. “By severing the for-cause removal provision, the panel decision fundamentally altered the CFPB’s structure in a way that is at odds with Congress’s design and will undermine the ...

The CFPB last week fined three reverse mortgage lending companies for allegedly deceptive advertisements, including claiming that consumers could not lose their homes. The CFPB ordered American Advisors Group (Orange, CA), Reverse Mortgage Solutions (Houston), and Aegean Financial (El Segundo, CA) to cease their allegedly deceptive advertising practices, implement systems to ensure they are complying with all laws, and pay civil penalties. The bureau claimed that the companies ran ads that misrepresented that consumers could not lose their homes and that they would have the right to stay in their homes for the rest of their lives. The companies also were accused of falsely telling potential customers that they would have no monthly payments and that a reverse mortgage would ...

The CFPB recently ditched the antiquated method for assessing compliance with reverse mortgage servicing rules in favor of new examination procedures. Depending on the scope, each reverse mortgage servicing exam will include one or more of eight modules. Subject areas represented by separate modules include servicing transfers, loan ownership transfers and escrow disclosures; account maintenance, payments and disclosures; consumer inquiries, complaints and error resolution procedures; and maintenance of escrow accounts or set-asides and insurance products. Other module segments address information sharing and privacy; events of default and death of borrower; foreclosures; and examiner conclusions and wrap-up. The revised guidance reminds CFPB personnel of their examination objectives, one of which is to identify acts or practices that materially increase the risk ...

The TRID 2.0 clarifying rulemaking proposal fails to alleviate most of the concerns that investors in the secondary mortgage market have about their potential legal liability, according to Pacific Investment Management Company. In its recent comment letter to the CFPB, PIMCO noted, “In most cases, the errors that relate to the [TRID] disclosures are subtle and technical in nature and do not result in corresponding consumer harm or confusion. Nevertheless, because the … rules implement provisions of the Truth in Lending Act that may carry actual or statutory damages and assignee liability to purchasers, there are serious concerns among secondary purchasers due to the rules’ expansion of liabilities in mortgage origination and investing.” Moreover, asset managers and other loan purchasers ...

Although the CFPB said it was not going to revisit the TRID rule in its entirety when it issued its clarifying rulemaking earlier this year, a number of industry players were still disappointed that more problems were not dealt with. At the top of a list provided by the Community Mortgage Lenders of America of issues that still need to be addressed is loans submitted by mortgage brokers. “An issue that continues to vex the industry is how to treat loans from mortgage brokers that are submitted following rejection by another lender,” the trade group said. “As is typically the case, the submission of a loan to a wholesale lender by a mortgage broker, following rejection of the same loan ...

TRID-related mortgage defects dropped slightly during the second quarter of 2016, the first decline since the rule kicked in Oct. 3, 2015, ARMCO, a risk management technology vendor, said in a new quality control analysis. “TRID-related defects continue to be the leading area of concern in post-closing reviews; however, corrective action planning taken by the lending community has produced positive results that can now be visualized in the 2Q data,” said Phil McCall, chief operating officer at the company. According to the report, the overall critical defect rate dropped to 1.63 percent for the period ending June 30, 2016, the most recent period for which relevant data were available, thus ending the upward swing that stretched back to 3Q15. The ...