The CFPB’s proposed changes to its TILA/RESPA Integrated Disclosure rule also would eliminate a degree of uncertainty by applying the rule’s existing disclosure requirements to cooperative units. Under the current rule, coverage of cooperative units depends on whether cooperatives are classified as real property under state law. Because state law sometimes treats cooperatives differently for different purposes, there may be uncertainty and inconsistency among market actors.As a result, the CFPB is proposing to require the provision of the integrated disclosures in transactions involving cooperative units, whether or not such units are classified under state law as real property. This would apply to closed-end credit transactions, other than reverse mortgages. “In at least some states, ownership of a share in ...

The CFPB last week upped the compliance ante for mortgage servicers by finalizing a number of amendments to its 2013 mortgage servicing regulation that will expand consumer protections while requiring more of servicers. The protections address, among other issues, successors in interest and borrowers in bankruptcy. Under the final rule, servicers will be required to provide certain borrowers with foreclosure protections more than once over the life of the loan. As per the CFPB’s existing rules, a mortgage servicer is required to give borrowers certain foreclosure protections, including the right to be evaluated under the bureau’s requirements for options to avoid foreclosure, only once during the life of the loan. The final rule, however, will require that servicers give those ...

Mortgage Industry Waits for PHH Shoe to Drop. The mortgage industry is awaiting a final ruling from the U.S. Court of Appeals for the District of Columbia Circuit in the case of PHH Corp. v. Consumer Financial Protection Bureau, No. 15-cv-01177.

The Consumer Financial Protection Bureau last week released its proposed rule to clarify a number of issues related to its integrated disclosure rule known as TRID – and perhaps the single most significant aspect of the proposal for mortgage investors is what it does not include: any additional provisions to cure loan errors. Some observers believe that could be a negative for the secondary market. On the other hand, the bureau did provide...

As of press time, it’s not clear whether the Consumer Financial Protection Bureau will release its proposed rule clarifying certain aspects of its Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure Rule – TRID – before the end of July, the agency’s original timeframe. Joe Ventrone, vice president and deputy chief for regulatory affairs at the National Association of Realtors, said his organization is now looking at an August release and does not anticipate major changes. “However, the CFPB will put in writing all previous informal guidance [it has] given heretofore,” he said. “I think all the guidance will be important if it gives lenders and vendors comfort against enforcement reprisals.” NAR is...

In a warning to other lenders on the importance of proper vendor oversight, the CFPB recently brought a$10 million enforcement action against Santander Bank, based in Wilmington, DE, because of its allegedly illegal overdraft services practices. Among the practices at issue, the bureau said the bank signed up consumers for overdraft services without their consent. “In some instances, Santander’s telemarketerbriefly described [the bank’s] Account Protector [service] to consumers, then asked for the last four digits of their Social Security numbers, and enrolled them without their consent,” said the CFPB. “In other instances, consumers said they did not want to enroll but requested information about the overdraft service, but the telemarketer enrolled them anyway,” the bureau added. Also, call ...

Non-agency mortgage-backed security issuers and investors were getting more comfortable in recent years with third-party due diligence reviews of less than 100 percent of the mortgages in an MBS due to the exceptionally strong performance of new originations. However, analysts at Morningstar Credit Ratings suggest that most non-agency MBS backed by new mortgages will be subject to full reviews due to uncertainty regarding the CFPB’s integrated-disclosure rule under the Truth in Lending Act and the Real Estate Settlement Procedures Act, otherwise known as TRID. The reviews help identify and cure compliance issues and protect MBS investors from TRID-related losses. “Most post-crisis transactions carry out due diligence on every loan, and we...

The Consumer Financial Protection Bureau any day now could release its long-awaited regulation finalizing its proposed amendments to its 2013 mortgage servicing rules, posing yet another compliance challenge and requiring one more round of systems upgrades from the industry as a result. According to a consensus of industry experts, the two biggest subject areas have to do with bankruptcy proceedings and successors in interest. “On the eve of the servicing rules taking effect, the bureau made...

The U.S. Senate this week passed legislation that includes reforms to current FHA restrictions on condominium financing, among other provisions. H.R. 3700, the Housing Opportunity Through Modernization Act of 2016, was approved without amendment by unanimous consent. The bill passed in the House of Representatives by a vote of 427-0 in February. The bill addresses problems facing buyers and sellers of condominiums. Specifically, the bill modifies the Department of Housing and Urban Development’s rental assistance and public housing programs, FHA’s requirements for condo mortgage insurance and the U.S. Department of Agriculture’s single-family housing guaranteed loan program. Among other things, the bill requires the FHA to make recertifications “substantially less burdensome,” while lowering the ownership-occupancy requirement from 50 percent to 35 percent. The current ...

A mortgage industry group wants to turn the TRID disclosure tables back on the regulators and reveal to homebuyers all the fees – including those imposed by the government – they have to pay for their home purchases, and not just those generated by the industry. The mortgage broker organization known as NAMB – The Association of Mortgage Professionals wants the CFPB and the Federal Housing Finance Agency to further clarify the TILA/RESPA Integrated Disclosure Rule by including a new line item that clearly states the “hidden” guarantee-fees and loan- level price adjustments from Fannie Mae and Freddie Mac. [However, it should be noted that the FHFA has no authorities under the Truth in Lending Act nor the Real Estate Settlement Procedures Act.] ...