Legislation

Browse articles from all of our Newsletters related to Legislation.

September 21, 2017 - Inside Mortgage Finance

Community Banking Trade Groups Seek Support for Regulatory Relief for Independent Mortgage Lenders

Trade groups representing smaller mortgage lenders are asking the Trump administration for targeted regulatory relief for smaller independent mortgage bankers. In a joint letter to Treasury Secretary Steven Mnuchin this week, the Community Home Lenders Association and the Community Mortgage Lenders of America urged the administration to back legislation that would exempt independent mortgage lenders from the Consumer Financial Protection Bureau’s supervision, enforcement and third-party vendor audits. Support is also being sought for CFPB administrative action to provide such targeted relief. In June, Treasury issued...


September 21, 2017 - Inside Mortgage Finance

CFPB Issues Proposed Policy Guidance on HMDA Data Collection, Looks Like New Requirements a Go

The Consumer Financial Protection Bureau has put out some proposed guidance on the controversial matter of how much of the expanded data collected under the Home Mortgage Disclosure Act will be made available to the public. The bureau did not announce any delay in the effective date of the revamped HMDA rule, slated to take effect Jan. 1, 2018. First, the agency wants to exclude several of the loan-level data points from public disclosure, including the universal loan identifier, the application date, the date the financial institution took action and the property address. Also, it would shield the borrower’s credit score, the mortgage loan originator ID number and any result generated by an automated underwriting system. Additionally, the CFPB is...


September 21, 2017 - Inside Mortgage Finance

CFPB Listening to Mortgage Rule Concerns, Data On Impact to Consumers Could Lead to Changes

Lenders and investors at the ABS East conference this week hit officials from the Consumer Financial Protection Bureau with a number of complaints about the agency’s mortgage rules. The bureau officials suggested that data will have more of an impact on policy changes than general complaints. Patrick Orr, a policy analyst at the CFPB, reiterated that the bureau is accepting feedback and considering changes or guidance for the TILA-RESPA Integrated Disclosure rule, special qualified-mortgage standards that apply to loans eligible for sale to the government-sponsored enterprises and aspects of the ability-to-repay rule, among other issues. A representative from one lender said...


September 21, 2017 - Inside Mortgage Finance

Why Should Mortgage Lenders Go Digital? That’s Where the Customers Are, Pros Say

Much of the historical discussion about the mortgage industry going fully digital and adopting e-mortgages has revolved around cost savings, greater efficiencies, validating compliance and other benefits. But at the end of the day, the biggest reason is that lenders’ customer base is increasingly focused on digital technology, and lenders need to go where the borrowers are. “That’s where the consumers are, right? Finally, everybody’s going online to shop for most of their products, and mortgages are starting to happen the same way,” said Tim Anderson, director of eServices for DocMagic, during a webinar last week sponsored by Inside Mortgage Finance. “They’re going out there looking for rates and pricing, they’re looking for real estate. If you want to capture that marketplace, you meet them out there in cyberspace.” Scott Stephen, president of the online division of Guaranteed Rate, noted...


September 15, 2017 - Inside MBS & ABS

Methods Used to Comply With Risk-Retention Rules Vary Among ABS Asset Classes, Moody’s Finds

Issuers of ABS are utilizing diverse structures to comply with the risk-retention requirements of the Dodd-Frank Act, according to a new sector commentary by analysts at Moody’s Investors Service. “Although securitization sponsors’ retention of portions of their own deals in general is credit positive … the rules have effectively just formalized prior common industry practices for many consumer ABS subsectors. This confirms our initial stance that the rules are only marginally credit positive for this sector,” said Vice President and Senior Analyst Yan Yan and Vice President and Senior Credit Officer Jingjing Dang. “That said, the methods of compliance that have emerged among ABS asset classes since the rules went into effect in December have varied.” Their first take-away is...


September 14, 2017 - Inside Mortgage Finance

House GOP Begins Second Prong in Approach To Reg Relief, Considers TRID Improvement Act

When House Financial Services Committee Chairman Jeb Hensarling, R-TX, first introduced the second version of his Financial CHOICE Act, he acknowledged the comprehensive regulatory relief package might not make it through the Senate in one piece. He said he had a “short game” and a “long game,” suggesting he was open to small, incremental change while still pushing forward with more comprehensive change over the long haul. Last week, the Financial Institutions and Consumer Credit Subcommittee executed a little of that “short game” strategy, holding a hearing to consider a handful of legislative proposals to foster a more efficient federal financial regulatory regime, including two mortgage-related bills. The potentially more significant bill is...


September 11, 2017 - Inside the CFPB

PHH, Realogy, Others Settle RESPA Case for $17 Million

A complaint filed in late 2015 in U.S. District Court for the Central District of California in an attempt to initiate a class-action case against PHH Corp. and Realogy Holdings Corp. and some of their subsidiaries and affiliates has been brought to an end, after the defendants agreed to pay $17 million to resolve the dispute. PHH, Realogy and the other industry participants were accused of violating Section 8(a) of the Real Estate Settlement Procedures Act by allegedly “paying and receiving kickbacks, referral fees, or other things of value in connection with the referral of title insurance and other settlement services to Title Resource Group and its affiliates.” They also were accused of running PHH Home Loans as an improper ...


September 11, 2017 - Inside the CFPB

Smaller Players Support Proposal to Close TRID’s ‘Black Hole’

The biggest mortgage lenders and the national industry trade groups have yet to formally submit comments to the CFPB regarding the bureau’s proposal that would close the so-called black hole associated with the agency’s integrated disclosure rule. But smaller players aren’t waiting around for the big dogs to weigh in and are expressing their support for the agency’s proposed solution. Monica Montgomery, head of mortgage compliance for Dubuque Bank & Trust, said she fully supports removing the four-business-day limit for providing closing disclosures for purposes of resetting tolerances and determining if an estimated closing cost was disclosed in good faith. “There are many circumstances where a closing is delayed beyond the control of the creditor after a CD had been ...


September 11, 2017 - Inside the CFPB

Congress Starts to Consider TRID Legislation, Other Changes to CFPB

Members of Congress wasted no time getting to work on the CFPB when they returned to the nation’s capital last week after the Labor Day holiday. A subcommittee of the House Financial Services Committee held a hearing to consider a few legislative proposals to foster a more efficient federal financial regulatory regime, including a soon-to-be introduced TRID Improvement Act. Slated to be introduced by Rep. French Hill, R-AR, the TRID Improvement Act of 2017 would amend the Real Estate Settlement Procedures Act and the Truth in Lending Act to expand the period in which a creditor is allowed to cure a good-faith violation on a loan estimate or closing disclosure from 60 to 210 days after consummation. The bill also ...


September 7, 2017 - Inside Mortgage Finance

PHH Corp., Realogy, Others Agree to $17 Million Settlement to Resolve RESPA Class Action Litigation

PHH Corp. and Realogy Holdings Corp. and some of their subsidiaries and affiliates recently agreed to a $17 million settlement to bring to an end a putative class-action lawsuit over allegedly deceptive and collusive practices in violation of the Real Estate Settlement Procedures Act. At issue were allegations of arranging kickbacks for unlawful referrals of title services. The plaintiffs in the case alleged...


August 28, 2017 - Inside the CFPB

FFIEC Issues HMDA Examiner Transaction Testing Guidelines

The CFPB and the other members of the Federal Financial Institutions Examination Council last week issued new examiner transaction testing guidelines for all financial institutions that report under the Home Mortgage Disclosure Act. The rules will apply to the examination of HMDA data collected starting in 2018 and reported beginning in 2019. The guidelines eliminate the file-error resubmission threshold under which a financial institution would have to correct and resubmit its entire Loan Application Register (LAR) if the total number of sample files with at least one error reached or exceeded a certain threshold, the bureau said. They also establish allowable tolerances for certain data fields for the purpose of counting errors toward the field-error resubmission threshold.Additionally, they provide ...


August 28, 2017 - Inside the CFPB

TRID Black Hole Liability Still a Big Concern for Mortgage Lenders

Legal liability in the context of the so-called black hole in the CFPB’s TRID integrated disclosure rule remains a source of much anxiety for mortgage lenders, according to experts such as Rod Alba, senior vice president of mortgage markets, financial management and public policy for the American Bankers Association. “For lenders in general, [the biggest concern] is simply the liability that results from allowing the transaction to be negotiated until the last minute,” he said last week in an interview. “We don’t like telling the consumer, ‘You’re now three business days from closing; we can no longer negotiate and you must go through on this deal.’ That’s not pleasant.” Alba continued: “The consumer may say, ‘Well, no, that chimney has ...


August 28, 2017 - Inside the CFPB

CFPB Cuts Community Lenders Some HMDA Slack for HELOCs

With speculation mounting that CFPB Director Richard Cordray could be out the door as early as the Labor Day weekend, the CFPB late last week announced it is amending the 2015 updates to the Home Mortgage Disclosure Act rule. The bureau has temporarily changed reporting requirements for banks and credit unions that issue home-equity lines of credit, and clarified the information that financial institutions are required to collect and report about their mortgage lending. Under the rules that are scheduled to take effect January 2018, financial institutions would have been required under HMDA to report HELOCs if they made 100 such loans in each of the last two years. The final rule issued this past Thursday increases that threshold to ...


August 24, 2017 - Inside Mortgage Finance

HMDA Testing Guidelines

The Federal Financial Institutions Examination Council this week issued new examiner transaction testing guidelines for all financial institutions that report under the Home Mortgage Disclosure Act. The rules will apply to the examination of HMDA data collected starting in 2018 and reported starting in 2019. The guidelines eliminate...


August 24, 2017 - Inside Mortgage Finance

Industry Glad CFPB Will Close TRID’s ‘Black Hole,’ Removing Lender Liability and the Resulting Anxiety

The Consumer Financial Protection Bureau has begun receiving public comments in response to its proposal to close the so-called black hole in its integrated disclosure rule under the Truth in Lending Act and the Real Estate Settlement Procedures Act. Interviews this week found that top experts dealing with the issue are pleased the bureau is addressing the problem, which is among the most significant issues related to the new disclosure regime. “Although the ‘black hole’ is highly technical, the impacts on lenders are significant,” noted former CFPB official Benjamin Olson, now a partner with the BuckleySandler law firm in Washington, DC. He noted...


August 18, 2017 - Inside FHA/VA Lending

Private MI Trade Group Urges CFPB To Establish Single QM Rule for All

The private mortgage insurance industry has called for harmonized qualified-mortgage standards to discourage potential arbitrage that might adversely affect consumers. In a comment letter, the U.S. Mortgage Insurers urged the Consumer Financial Protection Bureau to assess whether the various QM standards established under the Dodd-Frank Act have created arbitrage opportunities to the detriment of consumers. The CFPB is about to begin a reevaluation of its ability-to-repay rule/QM rule. QM standards are different for Fannie Mae, Freddie Mac and the Federal Home Loan Banks than for FHA, VA and the U.S. Department of Agriculture. The USMI said analysis should focus on the different treatment of points and fees and maximum borrower debt-to-income ratio among the various QM standards. The CFPB can address the calculation of points and fees under its ATR/QM rule by ...


August 14, 2017 - Inside the CFPB

As the Financial Crisis Fades, Are Servicers Poised for New Era?

Ten years after the financial crisis, the residential mortgage servicing industry could be on “the edge of glory,” according to a new report from S&P Global Ratings. “With the regulatory heat they’ve received in the past decade, servicers are working to ensure they’re compliant with all relevant servicing regulations,” said the S&P analysts. “Even if some deficiencies occur, as might happen when servicing thousands or millions of accounts, quickly correcting them and preventing recurrence is key because reputational damage alone can be quite substantial and long-lasting.” In recent years, mortgage servicers have been slapped with fines totaling tens of millions of dollars, and face an increasingly tougher regulatory and supervisory regime. “A positive outcome of the settlements and new regulations ...


August 14, 2017 - Inside the CFPB

Industry Supports CFPB HELOC Proposal, Says More Needed

Mortgage lending representatives told the CFPB they support its proposal to temporarily increase the institutional and transactional coverage thresholds for open-end lines of credit under the Home Mortgage Disclosure Act. However, more needs to be done along those lines, they said in comment letters filed at the end of last month. Under the CFPB’s HMDA rules scheduled to take effect in January 2018, financial institutions are generally required to report HELOCs if they made 100 such loans in each of the past two years. Under the proposal released early last month, the bureau would increase that threshold to 500 loans through calendar years 2018 and 2019 in order to give the agency the time to consider whether to make a ...


August 14, 2017 - Inside the CFPB

TRID Related Deadlines for Amendments, Comments Now Set

The CFPB’s so-called TRID 2.0 amendments, and the related proposal to deal with the “black hole” problem – the limited ability of a lender to reset tolerances with a closing disclosure – were published in the Aug. 11, 2017, Federal Register. That act establishes Oct. 10, 2017, as the effective date of the TRID 2.0 amendments, as well as the comment deadline for the black hole proposal. The amendments, which were finalized in July, essentially codify the CFPB’s informal guidance on various issues and make additional clarifications and technical amendments. They also create tolerances for the total of payments, adjust a partial exemption mainly affecting housing finance agencies and nonprofits, and extend coverage of the Truth in Lending Act/Real Estate Settlement Procedures ...


August 14, 2017 - Inside the CFPB

Its Investigation Now Complete, CFPB Tells Zillow: Settle or Else

The CFPB has told Zillow, the online real estate database firm, to settle with the agency over alleged violations of the Real Estate Settlement Procedures Act or face an enforcement action, the company revealed last week in its 10-Q filing with the Securities and Exchange Commission. “Based on correspondence from the CFPB in August 2017, we understand that it has concluded its investigation,” the firm said in its SEC disclosure. “The CFPB has invited us to discuss a possible settlement and indicated that it intends to pursue further action if those discussions do not result in a settlement.” At issue are certain co-marketing activities, which Zillow defended. “We continue to believe that our acts and practices are lawful and that ...


Poll

The year is almost 75% done. How is mortgage origination volume at your shop?

We will fund about the same as we did in 2016.
We will fund more than last year – by a little.
We will fund more than last year – by a lot.
We will fund less than last year – by a little.
We will fund less than last year – by a lot.

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