The complaints that consumers submitted to the CFPB about their bank accounts fell substantially, quarter to quarter and year over year, the latest analysis by Inside the CFPB reveals. Among all companies, consumer gripes were down 19.1 percent in the first quarter versus the fourth quarter, and off 13.7 percent from the same period the year before. Not surprisingly, a similar trend was obvious among the top three lenders. For instance, Wells Fargo saw consumer criticisms fall 11.1 percent QoQ and 28.4 percent YoY. For Bank of America, the drop-offs were 21.3 percent and 22.2 percent, respectively. JPMorgan Chase had declines of 11.3 percent on a quarterly basis and 16.3 percent on a yearly basis, while fourth-ranked U.S. Bancorp had ...

Clearer FHA guidance on loan defects may help lenders avoid problems but they do not provide legal protection against costly government false-claim lawsuits, according to mortgage industry stakeholders. Long-anticipated rules issued recently by the FHA explain how the agency intends to categorize loan defects identified during an individual loan-level review of endorsed single-family mortgages. The loan-defect assessment methodology or “defect taxonomy” was first unveiled in September 2014 as part of the FHA’s Blueprint for Access, which outlined steps the agency is taking to expand lending to underserved and first-time homebuyers. Combined with the updated loan-certification language used by lenders to warrant compliance with FHA rules and the new Single Family Policy Handbook, FHA plans to use the taxonomy to create a stronger quality assurance program. With better quality ...

GNMA to Modernize Management of Loan Docs that Serve as Pool Collateral. Ginnie Mae plans to reform its document custody policies to minimize agency risks. Michael Drayne, Ginnie’s senior vice president of issuer and portfolio management, said the changes will apply to documents for loans that serve as collateral for securitized pools of mortgages. Current policies will be reexamined to see whether they adequately reflect and mitigate actual risks. Existing technology will be reevaluated as well. Ginnie will also study how to integrate document-custody functions and information into the agency’s systems. In addition, Ginnie will look at whether information about the status of pool collateral should be managed at the loan level, not merely the pool level. Furthermore, the agency will reevaluate the need to reexamine its enforcement methods and whether they should be ...

On the heels of a final ruling this week where a federal judge said the government went too far in its takeover of American International Group as part of its 2008 bailout, some are comparing the lawsuit to the one bought by Fannie Mae and Freddie Mac shareholders. In this ruling, the federal judge decided not to award damages to AIG shareholders, even as it said the government was wrong in taking a 79.9 percent stake in the company in exchange for an $85 billion loan that helped keep the company on firm ground during the downturn. Judge Thomas Wheeler believed shareholders did not need to be compensated because AIG...

Financial institutions demonstrated a big improvement in the way they handled money transfers in the first quarter. The same could not be said for the money-transfer specialists. The performance of these companies was noticeably more uneven in the period ending March 31, 2015, according to the latest Inside the CFPB review of the CFPB’s consumer complaint database. Among the big three money-transfer companies – Western Union, MoneyGram and PayPal – Western Union did the best, seeing zero change from the fourth quarter of last year and an 18.8 percent drop year over year. MoneyGram did the worst of the three, with complaints up 72.9 percent from the fourth quarter and up 53.7 percent from a year ago. PayPal saw a 7.3 percent ...

Total originations of reverse mortgages with FHA insurance increased in the first three months of 2015, according to an Inside FHA/VA Lending analysis of agency data. Home Equity Conversion Mortgage production, overall, rose 3.0 percent to $3.9 billion from the fourth quarter of 2014 and was down 2.0 percent on a year-over-year basis. HECM purchase loans far outpaced refinances, which accounted for only 14.5 percent of total HECM volume in the first quarter. Lenders reported a total of $2.3 billion in initial HECM principal amount at loan origination. Meanwhile, there is continued investor interest in HECM mortgage-backed securities (HMBS), according to Ginnie Mae. The unpaid principal balance of HMBS climbed to $48.9 billion in FY 2014 and the number of participations (the funded portions of HECM loans that have been securitized) has increased to 6,585, 856. HMBS issuance was ... [1 chart]

A number of industry groups representing a broad array of financial services providers took advantage of the CFPB’s latest inquiry about consumer complaint information to express their concerns with the bureau’s possible expansions of its related database. Earlier this year, the bureau issued a formal request for information about the Consumer Complaint Database, asking for “input from the public on the potential collection and sharing of consumer compliments about providers of consumer financial products and services and more information about a company’s complaint handling.” The bureau specifically asked for input on two key points, the first of which was ranking or otherwise sorting service providers by certain metrics related to the complaints they receive, allowing complainants to rate service providers’ ...

Consumer complaints about credit reporting pretty much remained flat in the first quarter of 2015 from the fourth quarter of 2014 – up a scant 0.5 percent during that period – but dropped 11.0 percent overall from year-ago levels, a notable decline. An analysis of the CFPB’s consumer complaint database by Inside the CFPB found that each of the big three credit reporting firms – Experian, Equifax and TransUnion – saw declines year over year. Experian turned in the best performance of the three, however, seeing a drop of 18.4 percent. TransUnion was the only one of the big three to see a decline in both periods.Among specific complaints, “incorrect information” continues to represent the lion’s share of negative consumer feedback ... [with exclusive data chart]

Whistleblowers that bring a False Claim Act claim against an FHA lender based on previous publicly disclosed information have no standing, according to a recent federal district court ruling. Judge Jack Zouhary of the U.S. District Court for the Northern District of Ohio dismissed an FCA lawsuit against U.S. Bank because the whistleblower had neither direct nor independent knowledge of the bank’s alleged false claims – two basic requirements for standing in a whistleblower suit. The Advocates for Basic Legal Equality (ABLE), an Ohio-based legal aid group, filed an FCA lawsuit against U.S. Bank for allegedly disregarding and violating FHA regulations. The group accused the bank of filing false claims and collecting payments without evaluating loss mitigation alternatives before foreclosing on properties. According to ABLE, it had consulted with “many people,” whose mortgage loans were ...

The New York regional office of the Securities and Exchange Commission has opened up a preliminary investigation into the use of “collection agents” by mortgage servicers, including Ocwen Financial. In a recent 10-Q filing, Ocwen said it received a letter in February from SEC staff “informing us that it was conducting an investigation relating to mortgage loan servicer use of collection agents, and it made a request for the voluntary production of documents and information.” In the filing, Ocwen provided...