After months of hearing mortgage banking and real estate executives gripe about problems tied to the TRID integrated disclosure rule, the CFPB last week signaled its intention to clarify the controversial measure, which became effective in early October. According to a letter from CFPB Director Richard Cordray to industry trade groups, the agency will issue new rulemaking tied to the TRID disclosure regime that will provide greater certainty and clarity. Cordray – who has been lambasted by the industry about the integrated disclosure rule for months – noted in the letter: “We recognize that the implementation of the Know Before You Owe rule poses many operational challenges. We also recognize that implementation is particularly challenging because of the diversity of the participants ...

Both the mortgage industry and the CFPB itself may have been caught a bit flat-footed when it came to fully grasping the significance and complexity of the bureau’s TRID integrated disclosure rule, according to one of the individuals intimately associated with drafting the controversial regulation. “TRID is a huge rule, about 1,900 pages of extremely detailed twists and turns. It affects every single aspect of the origination and closing process, as well as liability for lenders and the secondary market,” former bureau official Richard Horn, now an attorney in private practice, told Inside the CFPB. “I think many in the industry had to play catch up these past seven months, trying to grasp the far reaches and complexity of this ...

The secondary market for mortgages with TRID errors has yet to lose any steam, even though it was anticipated that the action would fade by now. That’s the assessment of Jeff Bode, CEO of Mid America Mortgage, Addison, TX, one of the largest investors in loans with TRID problems. “It’s still pretty solid,” Bode told IMFnews, an affiliated publication. “But I don’t see how much longer it can last.” Bode noted that some of the mortgages he’s reviewing have errors that are so minor he’s surprised that secondary market investors are balking at them in the first place. Mid America buys such mortgages and “makes the cures” itself, the CEO noted. A secondary market for mortgages with TRID errors – jumbos ...

In the continuing wake of industry concerns about the TRID disclosure rule and worries about large retroactive fines, the Community Home Lenders Association says the CFPB should provide more balanced regulatory and enforcement policies toward smaller nonbank mortgage lenders and improve compliance guidance and due process. Asserting that nonbank mortgage lenders, including community-based lenders, have recently “led the way” in providing access to mortgage credit and providing more personalized loan servicing, the CHLA said “any regulatory policies that have the effect of imposing a disproportionate compliance burden on smaller lender/servicers can accelerate industry consolidation – which in turn can result in fewer consumer choices and less personalized service.” The trade group had three main recommendations for the bureau, the first of ...

The CFPB recently reopened the public comment period on whether mortgage servicers should be required to provide periodic statements for borrowers who have filed for bankruptcy. Specifically, the bureau is seeking public input on the consumer testing it did on its proposed sample periodic statement forms.Back in January 2013, the bureau issued its two mortgage servicing final rules. The agency clarified and revised those rules during the summer and fall of 2013 in two packages of amendments. Then in October 2013, the CFPB clarified compliance requirements in relation to successors in interest, early intervention requirements, bankruptcy law, and the Fair Debt Collection Practices Act (FDCPA), through an interim final rule (IFR) and a contemporaneous compliance bulletin. Among other things,...

Mortgage Warehouse Volume at Horizon Bancorp Declines in First Quarter, TRID Remains an Issue. Horizon Bancorp announced recently that its mortgage warehouse lending efforts were down in the first quarter of 2016. The bank had $119.88 million in mortgage warehouse loans on its balance sheet at the end of the first quarter of 2016, down 17.2 percent from the previous quarter and down 33.0 percent from the first quarter of 2015.... Flagstar Boosts Originations and Income in 1Q16, Is Comfortable with TRID. Flagstar Bancorp reported an increase in originations and net income for the first quarter of 2016 with company executives noting that the bank is comfortable with the TRID mortgage disclosure requirements...

Recent legal developments bode well for GSE shareholder lawsuits, according to one of the attorneys involved in the Perry Capital LLC v. Lew et al case where shareholders question the validity of the Treasury sweep of the profits of Fannie Mae and Freddie Mac.The D.C. Circuit Court heard oral arguments in the case on April 15 before three federal judges. The oral arguments took place as part of the appeal of the Fairholme Funds case dismissal in 2014, in which investors argued that the Treasury sweep violated the Housing and Economic Recovery Act. Hamish Hume, partner with Boies Schiller & Flexner, who argued before the panel of judges, said...

The New York State Supreme Court recently reversed a ruling in a foreclosure case, providing a favorable decision for lenders and servicers. New York Community Bank v. Daphne McClendon involved a foreclosure that was initiated in 2012. The mortgage in question was originated in 2008 by AmTrust Bank for $544,000. The note accompanying the mortgage was signed by electronic signature. The borrower challenged...

Freedom Mortgage Corp. has agreed to pay the federal government $113 million to resolve alleged violations of the federal False Claims Act and FHA requirements in connection with the origination of FHA-insured single-family mortgages. The April 15 settlement agreement between the New Jersey-based mortgage lender and the Department of Justice comes in the wake of a record $1.2 billion settlement between DOJ and Wells Fargo, which earlier admitted to false certification of defective mortgages for FHA insurance and failure to file timely reports on several thousand loans that were materially defective or badly underwritten. Like Wells Fargo, Freedom Mortgage failed...

A pilot effort by the Treasury Department’s Financial Crimes Enforcement Network is underway in New York City and Miami to track suspicious “all cash” purchases of high-end residential properties as part of the government’s anti-money laundering (AML) enforcement. In remarks during a recent AML conference in Florida, FinCEN Director Jennifer Shasky Calvery said geographic targeting orders (GTOs) were issued by the agency in January this year and went into effect on March 1. They require identification of high-end cash buyers to ensure luxury residences purchased with cash are not masking money laundering activities. Specifically, U.S. title insurance companies are temporarily required...