Last week, the CFPB asked the U.S. District Court for the Central District of California Southern Division to enter a final judgment and order that would shut down Student Loan Processing.US, and crack down on its sole owner, James Krause, for allegedly charging borrowers millions of dollars in illegal upfront fees for federal student loan services. The order would also require the company to pay refunds to thousands of consumers the bureau says were harmed, as well as a civil money penalty. In December 2014, the CFPB sued the company and Krause, alleging they illegally marketed and sold services promising to advise and assist borrowers applying for Department of Education student loan repayment programs. According to the bureau’s complaint, the ...

With the Consumer Financial Protection Bureau declining to provide any more formal guidance on legal liability for secondary market players when originators make errors in TRID mortgage disclosures, a group of due diligence firms is moving ahead with their own clarifications. High-level sources familiar with the matter, and who spoke to Inside MBS & ABS under the condition of anonymity, said the forthcoming clarifications have been vetted by legal counsel and are almost ready for viewing. Several top third-party review/due diligence firms are involved in the effort, including Clayton Holdings and Opus. All the major rating agencies are involved as well. “We’re working to calibrate our methodology, to bring it in line with the spirit of the CFPB letter,” said ...

With only a few isolated exceptions, VA and FHA lending was up sharply across the country last year, outstripping the private mortgage insurance business in nearly every state of the U.S., according to a new analysis by Inside FHA/VA Lending. Overall, FHA single-family mortgages securitized by Ginnie Mae increased 60.5 percent from 2014 and VA production was up 39.4 percent. Meanwhile, Fannie Mae and Freddie Mac posted a more subdued 26.2 percent increase in privately-insured loan volume. California remained the biggest mortgage market for the FHA, VA and private MIs, as well as uninsured mortgages. The FHA clearly won the mortgage insurance battle, boosting its share of insured loans in the Golden State from 41.1 percent in 2014 to 49.2 percent last year thanks to a whopping 89.8 percent jump in business. California had one of the highest concentrations of ... [ 3 charts ]

The FHA has issued emergency guidance for handling loan applications in areas affected by the water contamination crisis in Flint, MI, while the VA called for special relief for affected Michigan borrowers. A spokesperson for the Department of Housing and Urban Development said FHA lenders have been seeking guidance on how to handle single-family housing properties with an FHA-insured mortgage that may be affected by the tainted water supply in Genesee County., MI. The FHA’s two-page guidance stated that a property in the affected areas must first meet the agency’s property acceptability standards. Lenders are required to ensure that each property has a continuing adequate supply of clean, safe and potable drinking water. In addition, they must make sure the property is safe to occupy and free of any health or environmental hazard. HUD’s Single Family Policy Handbook ...

Long-time mortgage veteran Julie Vore, now an originations analyst in the mortgage markets team, research, markets and regulations division at the Consumer Financial Protection Bureau, recently answered more industry questions about the integrated disclosure rule known as TRID. Speaking during a webinar sponsored by American Mortgage Law Group and The Mortgage Collaborative, Vore elaborated on the most recent TRID-related guidance released by the bureau, a two-page fact sheet on the disclosure of construction and construction-to-permanent loans. “I recently was involved with a group of lenders, and there was heated debate in the construction realm as to whether the best way to disclose a single closed construction loan is with one loan estimate and closing disclosure or with...

Many small and medium-sized nonbanks have been earning steady profits the past three years, but some firms lost money in the fourth quarter of 2015, thanks to the CFPB’s integrated disclosure rule known as TRID. At least that’s what some warehouse managers told IMFnews, an affiliated publication. These credit executives, who spoke on the condition their names not be used, were somewhat surprised by the development, noting that about a third of their clients posted losses. The managers also noted that executives at companies experiencing the losses almost unanimously blamed it on the TRID rule, citing compliance costs and problems selling mortgages in the secondary market, particularly jumbo and nonconforming products. At this time, there seems to be no major ...

Roughly 25 percent of lenders responding to an American Bankers Association survey have eliminated some mortgage products because the TRID integrated disclosure rule does not provide enough clarity. The offerings that were killed include construction loans, adjustable-rate mortgages, home equity loans and payment-frequency options. Further, more than 75 percent of survey respondents said that TRID is delaying loan closings by, on average, eight days, the trade group said. However, some transactions have experienced as many as 20 extra days. Additionally, a whopping 93 percent claim uploading and loan processing times have increased as a result of TRID implementation. Approximately one quarter of respondents said the new rule has increased the total cost to the consumer to obtain a loan, the ...

The CFPB’s ability-to-repay rule with its qualified mortgage standard has not dampened mortgage credit availability – market dynamics did that before the rule kicked in, according to a new analysis from the Urban Institute’s Housing Finance Policy Center. “The second anniversary of the QM rule is an appropriate occasion to evaluate the rule’s impact on credit availability,” Research Associate Bing Bai, Director Laurie Goodman and Senior Fellow Ellen Seidman wrote in a brief published late last month. The data they reviewed suggest that the impact of QM has been small: mortgages with interest-only features and prepayment penalties were virtually extinct before QM took effect; the adjustable-rate mortgage share of the market still tracks interest rate changes; and the share of loans ...

In response to federal legislation that was enacted late last year, the CFPB last week announced an application process for requests that areas not deemed “rural” receive that designation under federal consumer law. “Under this process, those now outside rural counties or census blocks can apply to be designated as rural and may be eligible for specific exemptions and provisions for certain mortgage lenders,” the agency said. The CFPB will accept applications starting March 31. The application process will be open through Dec. 4, 2017. “However, any application submitted after April 8, 2017, will be considered only if the bureau determines the designation decision process for that application can be completed by the sunset date of Dec. 4, 2017, based ...

Before the CFPB’s new Home Mortgage Disclosure Act rules kick in, now would be a great time for the mortgage industry to take steps to improve the HMDA process, according to Kathleen Blanchard, president of Key Compliance Services. “As another HMDA season draws to a close, take some time to consider the HMDA process and how to make it better,” she advised in a recent online blog. “The HMDA Loan Application Register is an important document that is very labor intensive, with monetary penalties attached for inaccuracies. Take a project management approach and create a strong process to get it right.” Blanchard said she sees financial institutions scrubbing LARs at year end, making changes to applications and loans that should ...