The sale of jumbo mortgages – and even agency loans – by nonbanks continues to be problematic because of the CFPB’s integrated disclosure rule known as TRID. One mortgage official cited an example of a mortgage with TRID errors that was sold to one of the government-sponsored enterprises. “The lender self-reported the problems and was immediately asked to repurchase the loan,” this official said. Speaking of the GSEs, Fannie Mae and Freddie Mac issued $56.56 billion of single-family mortgage-backed securities in January, a modest 5.6 percent decline from the previous month, according to a new ranking and analysis by Inside The GSEs, an affiliated publication. December, however, may have been an anomaly. Many mortgage originators reported delays in loan closings in October ...

Since the Oct. 3, 2015, implementation of the CFPB’s integrated disclosure rule – TRID – attorney Daniella Casseres, an associate in the financial institutions regulatory practice at the Offit Kurman law firm in New York City, has received hundreds of questions concerning the new disclosure requirements.In a recent blog post, she provided answers to some of the most frequent and most pressing. Many have asked if they need to send all required three-day disclosures if the individual is just shopping. “The TRID rules require that you send a Loan Estimate and the home loan toolkit, when applicable, within three business days of receiving an application. An application for purposes of this rule, means the receipt of the following six pieces of ...

Mortgage lenders have had a little more than three months to get used to the CFPB’s integrated disclosure rule, but many are still squirming with uncertainty about civil liability and enforcement, particularly when it comes to errors in the Loan Estimate and the Closing Disclosure. Much of the problem stems from ambiguity in the wording of the rule itself. “Although TRID implements portions of the Truth in Lending Act and the Real Estate Settlement Procedures Act, the text of the regulation does not state which statutory liability applies to the various parts of the rule or forms,” K&L Gates attorneys Holly Spencer Bunting and Charles Weinstein said in a recent review. Instead, civil liability under TRID is a matter that ...

The recent death of conservative U.S. Supreme Court Justice Antonin Scalia may make it difficult for the nation’s highest court to consider a pending case that has far-reaching implications for the mortgage industry and the broader financial services sector. The specific question in Spokeo, Inc. v. Robins is whether the respondent (Robins) identified an injury-in-fact under Article III of the U.S. Constitution by alleging that the petitioner (Spokeo) had willfully violated the Fair Credit Reporting Act by publishing inaccurate personal information in consumer reports – in this case, on a consumer-reporting type website – without following reasonable procedures to assure the information’s accuracy. Spokeo tried to dismiss the suit on the grounds that Robins could not prove he suffered a specific financial ...

The CFPB issued a compliance bulletin recently that spells out the Fair Credit Reporting Act’s requirement that furnishers of information to credit reporting agencies (CRAs) institute reasonable written policies and procedures that ensure the accuracy and integrity of such information, including specialty CRAs. “The supervisory experience of the bureau suggests that some financial institutions are not compliant with their obligations under Regulation V with regard to furnishing to specialty CRAs,” said the bulletin. “Furnishers’ establishment and implementation of reasonable policies and procedures regarding the accuracy and integrity of information are essential components of a fair and accurate credit reporting system.” Further, “Such policies and procedures protect against the furnishing of inaccurate information that could potentially cause adverse consequences for consumers ...

The False Claims Act could potentially apply to Fannie Mae and Freddie Mac loans in the future, thanks to increased GSE cases and a broadened claim definition. The risk of the Department of Justice applying the FCA to GSE loans may seem remote, said Andrew Schilling, partner with BuckleySander LLP, but he isn’t counting it out. …

The Bank of New York Mellon, acting as trustee, has petitioned the New York State Supreme Court for instructions for paying out Bank of America’s $8.5 billion cash settlement with Countrywide MBS investors, which could potentially alter the order of payment, according to an analysis by Moody’s Investors Service. The governing MBS documents and the settlement agreement are complicated, nuanced and ambiguous, the rating service noted. Without guidance from the state court, BNYM, as trustee for 530 RMBS trusts, could decide on a payout that could favor certain bondholders unexpectedly. The massive payout has been delayed...

Fannie Mae’s Latest CAS Sells First-Loss Position. Fannie priced its latest credit risk sharing transaction under its Connecticut Avenue Securities series last week. For the first time, it is selling a portion of the first-loss position, further reducing taxpayer exposure to credit losses. To promote additional liquidity, Fannie for the first time sought a credit rating for the M2 notes in a CAS transaction. Servicer Expense Reimbursement Notification. Fannie Mae Expense Reimbursement will be consolidating the available expense reimbursement claim line item categories and subcategories in the Black Knight Financial Services LoanSphere Invoicing Application on March 21, 2016. This update will streamline the claim line item choices in the application for improved consistency in submitting and processing expense reimbursement requests. Freddie Prices...

RPM Mortgage has acquisitions on its mind once again and could be an aggressive buyer of other lending shops this year, according to industry advisors – if only falling interest rates didn’t get in the company’s way. It was originally thought that 2016 could be a robust year for mortgage mergers-and-acquisitions activity, but tumbling interest rates are making some owners think twice about selling – or getting picky about what they’re willing to take. For buyers, the best time to pounce is...

The FHA Mutual Mortgage Insurance Fund is projected to generate $9.1 billion in profits in FY 2017 but officials say they will not be reducing mortgage insurance premiums any time soon. Released this week, the White House’s proposed budget projects FHA will insure $204 billion in new forward, single-family mortgages with a negative credit subsidy of 4.42 percent for each loan, resulting in a projected profit of $9.1 billion. In fiscal 2016, the program is expected to generate $7.7 billion in profits. Separately, for the Home Equity Conversion Mortgage program, the proposed budget is projecting $18.5 billion in new reverse mortgage loans with a negative credit rate of 0.33 percent, netting $61 million in profits. During a budget briefing, Housing and Urban Development Secretary Julian Castro said there are no plans to change the current mortgage insurance premium. “We want to ensure our ...