With the CFPB widely expected to be less aggressive on the enforcement front in the wake of the elections earlier this month, the industry is being warned to be wary of a potentially more activist posture on the part of various state government agencies. Since the elections, “there has been much discussion of how expected changes under a Trump administration are likely to reduce the CFPB’s impact, particularly in the enforcement arena,” Ballard Spahr partner Alan Kaplinsky wrote in a recent online blog post. Little attention, however, has been paid to the implications of the election’s results for the role of state attorneys general and state financial services regulators in enforcing federal and state consumer financial protection laws, he added....

As part of its TRID 2.0 clarifying rulemaking, the CFPB sought comment on whether lenders should have the option of disclosing lender or seller credits as either credits specific to particular charges or general credits applicable to settlement costs. The Mortgage Bankers Association suggested the CFPB give lenders options and not settle on one approach. “Some lenders would prefer a single approach; others indicate that optionality is likely necessary,” the trade group said in a recent comment letter. It noted that seller credits are governed by sales contracts between the buyer and seller, and that local custom frequently comes into play as to who pays a specific fee, such as owner’s title insurance. “Similarly, the particular application of lender credits ...

The CFPB has made progress in its regulatory treatment of the cash-to-close table as reflected in its proposed rule to clarify aspects of its integrated disclosure rule, but more needs to be done, some leading industry groups said. “The cash-to-close sections of the Loan Estimate and Closing Disclosure represent some of the most challenging aspects of the TRID rule,” said the Real Estate Services Providers Council in a comment letter to the bureau. “The industry had noted that a failure of the prior disclosures was that they did not provide for disclosing to the consumer the lender’s estimate of the cash that he or she would need to close the loan,” it added. Further, the industry did not indicate that ...

Another area in which the CFPB sought industry input in its TRID clarifying rulemaking process is whether the proposed 120-day implementation period, starting from final publication in the Federal Register, will be adequate. Some industry commenters essentially said no. Others basically said, it depends. Wells Fargo was one of the commenters that fell into the former camp. “[S]ome of the clarifications in this proposal have already been implemented by the majority of the industry based on previous informal guidance from the bureau,” said the lender. “However, this proposal also contains a number of changes that are new or that are being proposed with more detailed direction than previously offered.” Some examples the lender cited were the proposed expansion to the ...

Some top industry players support the CFPB’s proposed amendment to its existing TRID rule that clarifies a lender’s ability to use a revised closing disclosure (CD) to reset tolerance baselines for fees and charges, as long as there are valid changes of circumstances. However, they think a few simple tweaks could maximize the usefulness of the change without creating an incentive for lenders to act in such a way as to defeat the bureau’s intention. The proposal clarifies that the authority to “rebaseline” exists for all CDs – not just the initial CD – and that for any CD issued after the first one, there is no timing requirement, and no timing limitation on the issuance of the initial CD. That means ...

Securitization Group Meets with CFPB Officials. Earlier this month, staff and members of the Structured Finance Industry Group met with CFPB Director Richard Cordray and other senior officials to talk about the state of the non-agency mortgage securities market and some of the factors hampering its return.... Mortgage Lenders Meet With Bureau, Other Regulators, to Discuss Diversity, Inclusion. A small group of mortgage lenders recently met with staff of the CFPB, the Federal Reserve, the Federal Deposit Insurance Corp., the Federal Housing Finance Agency and the Office of the Comptroller of the Currency to discuss best practices on how to develop and maintain diversity and inclusion programs within the mortgage industry, according to an account by the Mortgage Bankers Association....

Freddie Mac is set to issue a $459.92 million Whole Loan Securities transaction, according to a presale report from Moody’s Investors Service. The firm didn’t rate the senior tranche of the deal but did place a Baa1 rating on a mezzanine tranche of Freddie Mac Whole Loan Securities 2016-SC02. The government-sponsored enterprise priced the latest WLS transaction this week, with the deal expected to close next week. “We are pleased with the pricing levels and depth of investor participation in the WLS program,” said Kevin Palmer, senior vice president of credit risk transfer at Freddie. “We look forward to continued issuance in 2017.” Freddie has issued...

The Consumer Financial Protection Bureau’s recent actions against an unspecified number of lenders that offer non-qualified mortgages prompted some criticism about how the regulator enforces standards in the ability-to-repay rule. The CFPB cited lenders for originating non-QMs that allowed “alternative income documentation” for salaried borrowers. The CFPB said the products offered by the lenders relied primarily on the assets of each borrower when making an ATR determination ...

The FY 2016 Actuarial Review showed a stronger FHA mortgage insurance fund, thanks to a surging forward loan portfolio, but the prospect of a price adjustment remains unlikely. Review results were a mixture of good news and bad news. The good news is the Mutual Mortgage Insurance Fund’s economic net worth grew by $3.8 billion to $27.6 billion – $4.2 billion short of what last year’s actuarial report projected. The capital ratio rose to 2.32 percent, exceeding the 2.0 percent minimum established by Congress to cover future losses. Observers said the increases demonstrate steady but modest growth in the fund. The Department of Housing and Urban Development’s top officials credited the fund’s growth to a stronger forward-mortgage portfolio, which increased by $18 billion to $35.3 billion – $10.1 billion above projections – with a capital ratio of 3.28 percent. The report attributed the increase to a ...

The Department of Justice lost its bid to have an FHA lawsuit against Quicken Loans heard in the nation’s capital after a federal judge this week ordered the case transferred to federal district court in Michigan. Judge Reggie Walton of the U.S. District Court for the District of Columbia agreed with Quicken that the proper forum for adjudicating the government’s False Claims Act case is the Eastern District Court in downtown Detroit. While the court agreed that the case has national implications, it also noted the “strong local interest in this matter in the Eastern District of Michigan,” where “Quicken Loans underwrote the FHA loans at issue, endorsed those loans, and certified its compliance as to those loans.” While certain factors weighed against the transfer, the alleged unlawful activity occurred in or near Detroit, where the lender is headquartered and most of its employees are located. The case, U.S. v. Quicken Loans, ...