FFIEC Issues Revised Interagency Examination Procedures for Compliance with the TRID. The Task Force on Consumer Compliance of the Federal Financial Institutions Examination Council recently put out new interagency examination procedures for the Truth in Lending Act (TILA), as implemented by Regulation Z, and the Real Estate Settlement Procedures Act (RESPA), as implemented by Regulation X. These procedures reflect CFPB amendments to Regulations Z and X published in the Federal Register in December 2013 and February 2015. Most of the changes to the procedures relate to the integrated mortgage disclosure requirements under TILA and RESPA, commonly referred to as the “TRID” requirements. Office of the Comptroller of the Currency Bulletin 2015-27 makes available on the OCC website the revised interagency ...

A foreclosure case involving a mortgage pooled in a 2007 non-agency MBS has prompted competing amicus briefs from the Structured Finance Industry Group and California’s attorney general, among others. Yvanova v. New Century Mortgage is under consideration by California’s Supreme Court. The case hinges on whether a borrower can challenge a foreclosure based on a pooling and servicing agreement. The lower court previously ruled in favor of the lender, New Century Mortgage. “SFIG is...

Quicken Loan’s lawsuit against the government could help provide some certainty to lenders as to the proper legal standard for evaluating compliance with FHA rules and whether loan sampling is a permissible post-endorsement review strategy, according to legal experts. The adjudication of Quicken’s case against the Department of Justice in a public forum should clarify FHA policies, procedures, and the degree of future liability risks, experts said. Quicken Loans, the top FHA lender in 2014, sued the Department of Justice in federal court in Detroit April 17, accusing it of high-pressure tactics to admit wrongdoing and of using a small sample of flawed loans as a basis for claims under the False Claims Act. Up to that time, Quicken Loans had been the subject of an ongoing DOJ probe, which began three years earlier, in relation to its FHA lending practices. Quicken also asserted that, before filing its lawsuit ...

A high percentage of VA loans are not closing on time, potentially creating a disincentive for borrowers to use the product and opt for the competition instead, according to the latest Campbell/Inside Mortgage Finance’s HousingPulse Tracking Survey. Data showed that the share of VA loans closing on time declined to 55 percent in March 2015 from 70 percent in April 2014. This suggests that 45 percent of VA loans are experiencing serious delays in closing. “For VA, this is a significant change for the worse,” said Tom Popik, designer of the survey. The VA’s average closing time is 41 days as of March this year, up from around 39 percent a year ago. Comparatively, 75 percent of Fannie Mae and Freddie Mac loans with private mortgage insurance are closing on time as of March 2015, up from 68 percent a year ago. When delayed, VA closing takes a lot longer, 29 additional days, up from ...

The FHA Single-Family Policy Handbook’s effective date has been changed from June 15 to Sept. 14, 2015, the agency has announced. The affected sections include the following: Doing Business with FHA – Lenders and Mortgagees; Doing Business with FHA – Other Participants – Appraiser; and Quality Control, Oversight and Compliance. The section for Origination through Post Closing/Endorsement (OTPC/E) becomes effective for FHA case numbers assigned on or after Sept. 14. All applicable existing single-family handbooks, mortgagee letters and policy documents continue to apply until the OTPC/E section becomes effective, the agency said. A number of competing initiatives prompted the change of effective date. The FHA expects lenders to be fully compliant by Sept. 14. The FHA will continue to issue mortgagee letters periodically to ...

The Department of Housing and Urban Development is requiring servicers of FHA-insured mortgages to delay foreclosure for a year and to evaluate all borrowers for the Home Affordable Modification Program (HAMP) and other similar loss-mitigation programs. The move is one of the improvements to the FHA Distressed Asset Stabilization Program, a direct-sale pilot program that allows pools of foreclosure-bound mortgages to be sold to qualified bidders. Bidders are encouraged to work with borrowers to help cure the loan – a less costly alternative to foreclosure or an REO (real estate-owned) sale. An FHA servicer can place a troubled loan into a DASP pool if the borrower is at least six months delinquent on their mortgage and the servicer has exhausted all FHA loss-mitigation options. Previously, servicers could foreclose six months after they received the loan. They were also encouraged, though not required, to ...

Quicken Loans said it will be evaluating whether it should continue participating in the FHA single-family mortgage insurance program after the federal government formally accused the lender of improperly originating and underwriting mortgages that cost the FHA losses in paid claims. The Detroit-based mortgage lender two weeks ago took the unprecedented step of filing a lawsuit against the government for alleged harassment in what it deemed a long-running fishing trip to drum up charges against the company. Last week, the empire struck back. The Department of Justice filed...

The judicial process for Bank of America’s long-pending $8.5 billion settlement involving non-agency MBS issued by Countrywide Financial is near its conclusion and investors could see payouts as soon as August, according to analysts at Barclays Capital. The settlement was announced in 2011, and after years of legal maneuvering, approved by the Appellate Division of the New York Supreme Court in March. Bank of New York Mellon is the trustee on the 530 non-agency MBS covered by the settlement. “The trustee’s approval application to the New York Supreme Court suggests...

Quicken Loans this week went where no lender in the mortgage industry has gone before: Suing the U.S. government for suggesting it’s been doing a crappy job of originating FHA loans. Its legal action not only caught most of the industry by surprise, but resulted in loud applause from the Mortgage Bankers Association and K&L Gates partner Larry Platt. A number of major lenders have paid...

Green Tree Servicing agreed to pay $63 million to settle allegations made by two federal agencies regarding its servicing practices. The settlement includes $48 million in consumer redress and a $15 million civil money penalty. Green Tree did not admit or deny the allegations. The Consumer Financial Protection Bureau and the Federal Trade Commission said...