As the CFPB prepares to move forward with a new strategic plan – which may well be revised, now that Mick Mulvaney is in charge – the mortgage industry again called on the bureau to move beyond “regulation by enforcement.” Instead, it should provide more of the detailed guidance lenders and servicers and other participants need to fully comply with the agency’s rules and regulations and best serve consumers, top industry representatives said. In a recent comment letter to the bureau, the Mortgage Bankers Association noted that the CFPB is at an inflection point in 2017. Now it can “pivot and focus its resources on providing supervision and binding, authoritative guidance that helps responsible parties, including those in the mortgage industry, comply ...

The CFPB and VA recently issued their first WARNO, or “warning order,” to members of the U.S. armed forces and veterans with VA home loans, urging them to stay on their toes and avoid deceptive mortgage refinance offers. “If you have a VA home loan, then there is a good chance that you have already come into contact with unsolicited offers to refinance your mortgage that appear official and may sound too good to be true,” the two agencies said. Many of these solicitations promise extremely low interest rates, thousands of dollars in cash back, the ability to skip mortgage payments, and no out-of-pocket costs or waiting period. “Don’t be fooled,” the CFPB and VA said. “Before responding to any ...

Sen. Elizabeth Warren, D-MA, wrote to Don McGahn, White House counsel, and CFPB Acting Director Mick Mulvaney, in his capacity as director of the Office of Management and Budget, last week for answers to questions she has about Mulvaney and other OMB personnel simultaneously serving at the consumer bureau. First, she wanted to know what staff from OMB or elsewhere in the Executive Office of the President (EOP) have accompanied Mulvaney to the CFPB. She requested a complete list of all such staff, their title at OMB or in the EOP, and their title at the CFPB. Warren also sought the authority under which these individuals are working at CFPB. “Have these individuals been appointed to CFPB, or detailed to ...

Fannie Mae’s board chairman and the mayor of Atlanta are in a heated dispute over roughly 100 acres of vacant land that the city said was supposed to serve the low-income population. In fact, Mayor Kasim Reed is suing Egbert Perry and has asked him to step down from his position as non-executive chairman of Fannie’s board. Perry, co-founder and CEO of the Integral Group, joined the GSE’s board in late 2008, and has been chair since 2014. He says he hasn’t done anything wrong. The argument stems from what the mayor calls a “secret deal” made with Integral in 2011 by Renee Glover, the former president and CEO of the Atlanta Housing Authority, who now serves on Fannie’s board.

The Seventh Circuit Court recently reversed an earlier decision that held buyers purchasing property in Chicago from Fannie Mae were liable for state and local transfer taxes. The case involved real property transfer taxes imposed in 2013 and 2014 on purchasers who argued they were legally exempt from having to pay. The Illinois Department of Finance assessed the buyers for the tax. But since the property was purchased from a federal agency, the buyers believed they were exempt from having to pay. The buyers and Fannie then both sued the City of Chicago and asked the federal court to review the finance department’s decision.

Think Tank Makes a Case for GSEs to Become SIFIs. Alex Pollock, senior fellow at the R Street Institute, along with author Thomas Stanton, wrote Treasury Secretary Steve Mnuchin this week urging him to designate Fannie Mae and Freddie Mac as Systemically Important Financial Institutions (SIFIs).They said that it’s obvious the mortgage giants meet all the criteria specified by the Dodd-Frank Act and the Financial Stability Board for designation as SIFIs and they want the same protective capital and regulatory standards applied to the...

The Department of Veterans Affairs and the Consumer Financial Protection Bureau have issued a joint warning to servicemembers and veterans about VA refinancing offers that sound too good to be true. There is a good chance that borrowers with a VA loan have already received unsolicited offers to refinance their mortgages even just months after closing, the agencies said in their first “warning order” (WARNO). Many of these refi solicitations promise extremely low rates, thousands of dollars in cash back, skipped mortgage payments, no out-of-pocket costs and no waiting period, the agencies noted. The VA and the CFPB said lenders offering VA refinances may use aggressive and potentially misleading advertising and sales tactics. “Lenders may advertise a rate just to get you to respond or you may receive a VA mortgage refi offer that provides limited benefit to you while adding thousands of dollars to your loan balance,” the agencies warned. Even though the VA prohibits a lender from advertising skip payments on ...

A former FHA commissioner has recommended raising the agency’s capital reserve ratio to 3 percent, to make FHA stronger and more resilient. Carol Galante, who served two years as FHA commissioner and assistant secretary for housing in the second term of the Obama administration, laid out her proposal along with other recommendations in a paper that she co-authored. Housing-finance reform without a retooled FHA could threaten families’ access to homeownership and increase risk to taxpayers, contrary to the goals of reform, said Galante, currently the faculty director of the Terner Center for Housing Innovation at University of California Berkeley. In her paper, Mission Critical: Retooling FHA to Meet America’s Housing Needs, Galante spelled out the changes necessary to help FHA perform its complementary and countercyclical role in the nation’s housing markets. Galante called for ...

Ginnie Mae called on issuers to ensure that the data they submit are accurate following the discovery of erroneous payment reports. The agency said it has noticed discrepancies in the reporting of the first payment date on loan modifications in violation of Ginnie guidelines. Specifically, the first payment date some issuers reported as part of the loan-delivery data did not match the date submitted for the same mortgage loan as part of issuers’ monthly report of pool and loan data. Ginnie blamed the errors either on loans set up incorrectly for servicing or faulty data issuers had reported to the Department of Housing and Urban Development. Guidance issued by Ginnie on Nov. 14 reminded issuers to report the first scheduled payment date of the re-amortized loan when reporting the first payment date for modified mortgages through either the GinnieNET or the Reporting and Feedback System. The date ...

It’s unlikely the mortgage lending and servicing industry will see any big changes at the CFPB right away – at least in terms of new regulations and rule-makings – once Richard Cordray formally exits the stage as director of the bureau, most experts said. “Until the president installs a new director, it should be business as usual,” former CFPB official Benjamin Olson, now a partner with Buckley Sandler in Washington, DC, told Inside the CFPB. As excited as some mortgage industry representatives were upon hearing the news, all of the bureau’s rulemakings related to mortgage lending and servicing have already been issued and finalized, so that’s all water under the bridge. A new director will not be able to willy-nilly revoke or ...