FHA lenders will face stiffer maximum monetary penalties later this year for various violations of agency rules and regulations. The higher monetary penalties are the result of legislation signed into law late last year requiring federal agencies to adjust the current maximum penalty amounts for inflation in order to maintain their deterrent effect. Specifically, the Federal Civil Penalties Inflation Adjustment Act of 2015 (2015 Act) requires federal agencies to adjust the level of civil monetary penalties with an initial “catch-up” adjustment through an interim final rule and subsequent annual adjustments for inflation. The interim final rules with the initial penalty adjustments must be published by July 1, 2016. The new penalty levels must take effect no later than Aug. 1, 2016. Additionally, agencies are required to make annual inflation adjustments, starting Jan. 15, 2017, and for each year going forward. The adjustments will ...

In a letter sent to CFPB Director Richard Cordray, the National Association of Realtors asked the agency to clarify that mortgage originators can share the closing disclosure (CD) form with third parties “if the lender receives a consent form from the consumer.” The trade group noted that, before the TRID rule was implemented, real estate agents aided their clients by answering questions about the HUD-1 and by reviewing terms agreed to in the sales contract, such as concessions, escrows, commissions and shares of prorated taxes.

Fannie Mae recently provided sellers with a little more guidance on its expectations related to lender self-reporting of errors in complying with the CFPB’s new disclosure regime under the Truth in Lending Act and the Real Estate Settlement Procedures Act.

The CFPB filed suit against Intercept Corp., a third-party payment processor located in Fargo, ND, and two of its executives for allegedly enabling unauthorized and other illegal withdrawals from consumer accounts by their clients. The CFPB alleges that Intercept and the executives violated the Dodd-Frank Act’s prohibition against unfair acts and practices by processing payments for clients without adequately investigating, monitoring or responding to red flags that indicated some clients were breaking the law or deceiving customers.

In its annual report to the CFPB, the Federal Trade Commission detailed the enforcement work it did last year in three cases dealing with mortgage assistance relief services, several of which involved alleged forensic audit scams.

Maybe it’s just a matter of semantics. But mortgage lending trade group officials, industry attorneys and compliance professionals seem to be sending mixed signals as to whether the CFPB is now examining lenders for compliance with the controversial integrated disclosure rule, TRID. Rod Alba, senior vice president of mortgage markets, financial management and public policy for the American Bankers Association, told Inside the CFPB that his organization is not hearing that the bureau has started TRID compliance reviews. “Although our members report that examiners are inquiring about TRID implementations, and may be looking at one or another disclosure packet, they are generally assuring that the bank is engaged in active TRID implementation and trouble-shooting,” Alba said. “The banks we heard ...

One of the biggest red flags that will bring CFPB examiners charging in a lender’s direction is the level of consumer criticisms lodged against a company, especially if the number of such gripes is disproportionately large, a top industry attorney reminded the industry recently. Addressing attendees earlier this month during a webinar sponsored by Inside Mortgage Finance, a sibling publication, Michelle Rogers, a partner in the BuckleySandler law firm office in Washington, DC, said, “If your complaints are anomalous in that they’re much higher than others in your industry – peers, folks of your size – you are more likely to get an exam than others. And so you want to make sure that you’re mitigating or addressing those issues.” And those ...

There was a significant increase last year in the number of coordinated examinations of non-bank financial services companies between the CFPB and state banking regulators. The number of such exams rose from nine in 2014 to 16 in 2015, the State Coordinating Committee of the Conference of State Bank Supervisors reported recently in its annual report. Examinations that are scheduled between the SCC and the CFPB are performed simultaneously between state regulators and the CFPB. The examinations involve coordinated planning, shared resources, concurrent onsite visits, and sharing of confidential and non-confidential supervisory information, including findings and reports of exam. The SCC also indicated there was “an expansion into new industry types as the CFPB established additional supervision authority by rule.” ...

The CFPB last week filed an administrative consent order against a former Wells Fargo employee, for running an alleged illegal mortgage “fee-shifting” scheme, fining him $85,000 and banning him from working in the mortgage industry for a year. The bureau accused David Eghbali, formerly a loan officer for the Wilshire Crescent Wells Fargo branch in Beverly Hills, CA, of referring a substantial number of loan closings to a single escrow company, New Millennium Escrow, Inc., which allegedly shifted its fees from some customers to others at his request. “While employed by Wells Fargo from November 2007 through July 2015, in connection with originating federally related mortgage loans to consumers primarily for personal, family or household purposes, respondent provided real-estate settlement ...

The CFPB’s pending Home Mortgage Disclosure Act rule significantly expands the industry’s data-reporting requirements – and the risk of possible disclosure of a borrower’s personal information along with it – something the bureau still has not addressed to the industry’s satisfaction, according to one top attorney. “The implementation date of the rule is fast approaching and the mortgage industry still has not received any answers in regards to their data privacy concerns,” Craig Nazzaro, of counsel in the Atlanta office of the Baker Donelson law firm, said in a blog posting earlier this month. He noted that mortgage industry representatives have repeatedly raised their privacy concerns about the new rule with the bureau. However, “the CFPB has thus far avoided addressing these ...