New FHA guidance for dealing with mortgages with a Property Assessed Clean Energy (PACE) obligation went into effect last week but uncertainty lingers and its full impact remains to be seen, according to an industry attorney. The Department of Housing and Urban Development has issued guidance specifically allowing properties encumbered by a PACE lien to be eligible for FHA mortgage financing for both purchase and refinance loans. The department of Veterans Affairs has issued similar guidance. According to Erika Sonstroem, an attorney with the law firm Bradley Arant Boult Cummings, the PACE industry is touting the guidance in its pitches to lenders as posing no risk to mortgage investors. PACE is a program that lends money to homeowners for home-energy savings projects. It is treated much like a tax lien on a property and is included in the ...

Industry trade groups have yet to weigh in on the CFPB’s TRID clarifying rulemaking, but the grassroots rank-and-file have, and many of them are raising more concerns and questions. For instance, Ross Miller, president of Miller Home Mortgage in Metairie, LA, complained that there are no exceptions for the three-day waiting period when there is an emergency. “I had a client whose father was quickly scheduled for open heart surgery,” he said in a comment letter. “The client was ...

It’s been almost a year now since the CFPB’s integrated disclosure rule went into effect, and industry participants across the credit spectrum appear increasingly comfortable with the new disclosure regime. But when it first came out, the rule took all the oxygen from the room and caused more fear and anxiety that, in retrospect, appears to be have been justified, according to a handful of experts in the non-prime mortgage origination space. Speaking during ...

Wells Fargo Chairman and CEO John Stumpf will be on what is expected to be a very hot seat before the Senate Banking, Housing and Urban Affairs Committee tomorrow when he is expected to explain what went wrong at his institution that enabled employees to open more than two million deposit and credit card accounts that may not have been authorized by consumers. CFPB Director Richard Cordray is also scheduled to testify, as is Comptroller of the Currency Tom Curry and ...

First it was Corinthian Colleges, then ITT Educational Services. Now, Bridgepoint Education Inc. has been taken to task by the CFPB over alleged misconduct. Last week, the bureau brought a $31.5 million enforcement action against the for-profit post-secondary education company based in San Diego, accusing it of deceiving students into taking out private student loans that cost more than advertised....

Even Under Trump, Would the CFPB Be Invincible? If businessman Donald Trump wins the White House in November, the CFPB would be in the Republican’s crosshairs for sure. But the bureau’s recent consumer fraud case against Wells Fargo for opening up roughly two million deposit and credit card accounts without authorization has caused such outrage nationwide that it may very well give the controversial regulator a “shield” of sorts. At least that’s what we’ve been…

Individual investors in Fannie Mae and Freddie Mac stock lost separate legal battles to inspect the corporate records of Freddie and prove that the Treasury sweep of the government-sponsored enterprises’ profits is damaging and unjust. In the case of Arnetia Joyce Robinson v. The Federal Housing Finance Agency, et al., the shareholder plaintiff argued that her investments were materially damaged when FHFA and the Treasury Department implemented the net worth sweep back in 2012. Robinson argued...

A federal district court judge in Manhattan has named a lead master to review 9,342 mortgages for material breaches following a put-back trial against UBS Real Estate Securities. The trial in the U.S. District Court for the Southern District of New York will determine whether UBS breached certain representations and warranties and may have to repurchase the defective loans originally pooled in three trusts. U.S. Bank, the trustee for all three pools, is seeking more than $2 billion in damages, court filings show. U.S. Bank sued...

A GSE investor in Kentucky lost her case last week when the court dismissed claims that the government damaged Fannie Mae and Freddie Mac by implementing the net worth sweep of the GSEs’ profits. Arnetia Robinson alleged that her investments in Fannie and Freddie were “materially damaged” when the Federal Housing Finance Agency and the Treasury Department amended the existing preferred stock purchase agreement in 2012. According to court records, Robinson was seeking declaratory and injunctive relief that would prevent enforcement of portions of the PSPA. She contended that the sweep violates the Housing and Economic Recovery Act and said the Treasury acted “arbitrarily and capriciously.”

Plaintiffs in a Fannie Mae and Freddie Mac shareholder case challenging the GSEs’ quarterly earnings sweep dropped some of the charges in their original complaint to bypass the Federal Housing Finance Agency’s motion to consolidate all of the cases. The pair, Gary Hindes and David Jacobs, is looking to dismiss counts that allege derivative breach of contract and other similar claims and instead allege “unjust enrichment” against the Treasury Department. The plaintiffs bought the class action suit focusing on Delaware and Virginia corporate law on behalf of themselves and other stockholders. Court documents in David Jacobs and Gary Hindes v. The Federal Housing Finance Agency...