Regulations

Browse articles from all of our Newsletters related to Regulations.

July 20, 2017 - Inside Mortgage Finance

House Appropriators Reject Administration’s Proposed FHA Lender Fee. A $135 Million Set Aside for IT Upgrades

The House Appropriations Committee this week approved a fiscal year 2018 funding bill for the Department of Housing and Urban Development with a $135 million allocation for systems enhancements, quality control and risk management improvements in lieu of a proposed lender fee. Approved by a vote of 31 to 20, the bill provides HUD with $38.3 billion in discretionary funding for FY 2018, down $487 million from the current level. The House measure authorizes...


July 20, 2017 - Inside Mortgage Finance

As New HMDA Regime Approaches, CFPB Cuts Some Limited Slack, While Calls Continue for Delay

With the new data collection and reporting requirements under the Home Mortgage Disclosure Act now less than six months away, anxious industry calls for regulatory relief met with some limited success recently, while others continue to urge a broader extension of the implementation period. Late last week, the Consumer Financial Protection Bureau relented somewhat, proposing to temporarily ease HMDA reporting requirements for lenders that make a small number of home equity lines of credit. The agency proposed raising the threshold for HELOC reporting from 100 loans to 500 loans, starting in January 2018. Officials acknowledged they may have...


July 20, 2017 - IMFnews

Short Takes: NYSE-Listed Firm Selling MSR Portfolio via MountainView / Former Ginnie Chief Tozer Heads to PennyMac / No Reason Given / Galante’s Ocwen Holdings / Earnings from Black Knight and MGIC

Former Ginnie Mae President Ted Tozer will join the board of PennyMac Financial Services, the nation's fourth largest home lender, in August.


July 20, 2017 - IMFnews

CFPB Issues Proposal to Address the TRID ‘Black Hole’

Currently, lenders are permitted, under certain limited circumstances, to use revised estimates…


July 19, 2017 - IMFnews

Short Takes: A Bulk MSR Deal from MountainView / Proposed HUD Lender Fee Is Cut From Spending Measure / Invictus Readies Nonprime MBS Deal / A Promotion at loanDepot

Another nonprime MBS deal is ready to hit the market, this one from Invictus Capital Partners...


July 19, 2017 - IMFnews

PIMCO: Non-Agency Changes Needed Before GSE Reform

Over the past two years PIMCO has been a major buyer of nonprime/non-QM whole loans in the secondary market…


July 19, 2017 - IMFnews

Most Mortgage Gripes Plunge – Except for Loan Servicing

Specialty servicers Ocwen and Ditech Financial ranked third and fifth, respectively, in mortgage complaints during the first six months of 2017, according to Inside the CFPB.


July 19, 2017 - IMFnews

Bank Mortgage Repurchases Trend Lower

Bank of America once again reported the biggest volume of residential loan repurchases: $421 million…


July 18, 2017 - IMFnews

CFPB Suffers Another RESPA Blow; A Victory for Affiliated Business Arrangements?

It’s unclear whether the CFPB will appeal the decision. Bureau officials declined to comment.


July 18, 2017 - IMFnews

Walter’s Warehouse Lenders Show Patience – but for How Long?

In late May, Walter disclosed in an SEC filing that some of its previously issued financial statements could not be relied upon because of what it called an “accounting error.”


July 17, 2017 - Inside the CFPB

Extend HMDA Implementation Period, Industry Urges CFPB

The American Bankers Association and banking associations from each of the 50 states and Puerto Rico last week called upon the CFPB to delay the new Home Mortgage Disclosure Act data collection and reporting requirements, which are scheduled to kick in Jan. 1, 2018. “We appreciate the bureau’s efforts to help lenders comply with the new reporting requirements,” the trade groups began. “Nonetheless, banks of all sizes are gravely concerned that they will not be able to assure proper compliance by the January timeframe.” For one thing, the new HMDA rules are inherently complex and very expensive to implement, according to the ABA and its affiliates. Also, they are incomplete. “Recently proposed adjustments to the rule are complicating compliance efforts...


July 17, 2017 - Inside the CFPB

Most Mortgage Complaints Plunge, But Gripes About Servicing Jump

Based on plunging consumer gripes sent to the CFPB, the mortgage market looks like it’s in great shape – with one glaring exception: mortgage servicing. According to a new analysis by Inside the CFPB of second quarter data from the bureau’s consumer complaint database, mortgage servicing saw a 17.5 percent jump in borrower grousing during the second quarter, but a milder 1.4 percent uptick from the first half of 2016. That latter level would be barely perceptible were it not in such stark contrast to the double-digit drop-offs seen in all other mortgage-related areas tracked by this publication. For instance, kvetching about loan modifications plummeted 81.5 percent from the first quarter of this year to the second, and [With exclusive data charts]...


July 17, 2017 - Inside the CFPB

Arbitration Rule a Risk to Banks’ Safety and Soundness, OCC Says

It’s one thing for a regulatory agency to promulgate a rule and catch a lot of slack from the affected industry. It’s quite another when another regulatory agency takes issue with a rule. The CFPB got a bit of a surprise in this regard when it issued its arbitration final rule last week: the Office of the Comptroller of the Currency expressed concerns about the potential risk the rule could pose to the safety and soundness of the U.S. banking system. In a letter to CFPB Director Richard Cordray, OCC Acting Comptroller of the Currency Keith Noreika, a recent appointee of President Trump, said, “The OCC has a mandate to ensure the safety and soundness of the federal banking system...


July 17, 2017 - Inside the CFPB

Bureau Issues Final Rule to Ban Mandatory Arbitration Clauses

The CFPB has finally issued its long-awaited final rule banning mandatory arbitration in consumer financial contracts. For starters, the final rule prohibits “covered providers of certain consumer financial products and services from using an agreement with a consumer that provides for arbitration of any future dispute between the parties to bar the consumer from filing or participating in a class action concerning the covered consumer financial product or service.” Further, the final rule requires “covered providers that are involved in an arbitration [proceeding] pursuant to a pre-dispute arbitration agreement to submit specified arbitral records to the bureau and also to submit specified court records.” The new rule applies to the major markets for consumer financial products and services overseen by...


July 17, 2017 - Inside the CFPB

CFPB Cuts Small-Volume HELOC Lenders Some HMDA Slack

Last week, the CFPB issued a proposal to temporarily ease reporting requirements under the Home Mortgage Disclosure Act for small banks and credit unions that issue home-equity lines of credit – but based on the number of such loans, not asset size of the institution. 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 last week, the bureau would increase that threshold to 500 loans through calendar years 2018 and 2019 in order to give the consumer regulator the time to consider whether to make a permanent adjustment. “Home-equity lines of credit worsened ...


July 17, 2017 - Inside the CFPB

JPMorgan Details Reforms Needed to Mortgage Servicing Regulation

JPMorgan Chase told the CFPB it supports the bureau’s mission of protecting consumers and recognizes that regulatory guardrails are necessary to make sure mortgage servicers adequately address consumers’ needs. “However, certain provisions of Regulation X [which implements the Real Estate Settlement Procedures Act] impose burdens on servicers that increase servicing costs and impact access to consumer credit without providing proportional benefits to consumers,” the servicer said. JPMorgan was one of the industry participants commenting on the CFPB’s proposal to start assessing the effectiveness of its mortgage servicing rules under RESPA. The financial institution went on to some of the problem areas in Reg X that still need to be addressed, one of which has to do with rules for loss...


July 17, 2017 - Inside the CFPB

Industry Suggests Improvements to Servicing Rule Assessment

Trade organizations representing the mortgage banking industry provided a number of important suggestions for the CFPB as it proceeds with a Dodd-Frank Act requirement to assess its mortgage servicing rules at the five-year mark. The first issue the American Bankers Association raised in this regard in its comment letter to the bureau was the scope of the assessment. “The CFPB should incorporate all of the servicing rules into its review, including the rules that implement the Truth and Lending Act and the amendments that the CFPB adopted to the servicing rules in 2016,” the ABA said – not just the rules promulgated under the Real Estate Settlement Procedures Act. The bureau also should take into account the rules’ effects upon consumers...


July 17, 2017 - Inside the CFPB

Bureau Issues Proposed Rule to Address TRID’s ‘Black Hole’

In addition to the so-called TRID 2.0 final rule, the CFPB recently issued a notice of proposed rulemaking related to what’s known in the mortgage industry as TRID’s “black hole,” which refers to situations in which a lender is not permitted to use a closing disclosure to reset fee tolerances. More specifically, the proposal addresses when a creditor may use a Closing Disclosure (CD), instead of a Loan Estimate (LE), to determine if an estimated closing cost was disclosed in good faith and within tolerance. Currently, lenders are permitted, under certain limited circumstances, to use revised estimates, instead of the estimate originally disclosed to the borrower, to compare to the charges actually paid by or imposed on the borrower in...


July 17, 2017 - Inside the CFPB

CFPB Codifies Final Changes to TRID, Permits Sharing of the CD

The CFPB recently published long-awaited updates to its “Know Before You Owe” integrated disclosure mortgage rule, finalizing, among other things, amendments on finance charge disclosures, disclosures tied to housing assistance that a borrower receives, and when information can be shared with third parties, including real estate agents. The KBYO rule took effect in early October 2015 as part of an effort to simplify disclosures under two laws: the Truth in Lending Act and the Real Estate Settlement Procedures Act. The lending industry commonly refers to the combined disclosures as TRID, short for TILA/RESPA Integrated Disclosure rule. In a statement on the amendments, the CFPB noted that TRID “changed the total of payments calculation so that it did not make specific...


July 17, 2017 - IMFnews

Short Takes: LOs, You’ve Been Put on Notice / Citigroup’s MSR Holdings: Down 68 Percent / GOS Outlook / Two Harbors Prices Preferred Shares / Castle & Cooke Hires Compliance Manager

Mortgage gain-on-sale margins likely will be flat...


July 17, 2017 - IMFnews

CFPB Cuts ‘Smallish’ Lenders Some HMDA Slack (Temporarily)

Under the proposal, the CFPB would increase that threshold to 500 loans through calendar years 2018 and 2019…


July 17, 2017 - IMFnews

Walter Now in Danger of Getting Kicked off the NYSE

Walter, the parent of Ditech Financial, said it expects to “acknowledge receipt” of the compliance violation and “notify the NYSE of its intention to seek to cure the deficiency…”


July 14, 2017 - Inside Mortgage Trends

Fed Study: Refi Ads Work, Could be Improved

Direct-mail advertising campaigns touting refinances help prompt borrowers to refi, according to a study by economists at the Federal Reserve. They added that policymakers should consider making it easier for lenders to target borrowers for refis. Seran Grundl and You Suk Kim, economists at the Fed, authored a recent working paper that examined how borrowers react to receiving ads in the mail for refinances. They said the effect of advertising on consumer mistakes and ...


July 14, 2017 - IMFnews

What We’re Hearing: Fairholme’s Berkowitz: Watt Will Fix the GSE ‘Zero Capital’ Problem / What’s $5 Trillion Among Friends? / The Termination and Transfer Option / A Tale of Two Mortgage Giants / Renren and Sindeo?

According to Fairholme’s math, the GSEs earn over $15 billion a year, and taxpayers own 80 percent of the companies (via the senior preferred). Berkowitz values the senior stock at $100 billion…


July 14, 2017 - IMFnews

Other MBS Trustees May Follow Wells Fargo’s Lead on Withholding Funds

Analysts at Bank of America Merrill Lynch said the action by Wells was “the most talked about topic” among market participants recently.


July 13, 2017 - Inside Mortgage Finance

Warehouse Lenders Give Walter Another Round of ‘Waivers.’ But How Long Can the Forgiveness Last?

Walter Investment Management Corp. has secured a second round of limited waivers from its warehouse providers, a signal that its lenders are being patient – for now. According to interviews with warehouse executives and consultants, the granting of short-term waivers can be a common practice, but if those waivers go into a third or fourth round it can get expensive for the borrower and may signal an end to the patience of a company’s bankers. Walter, the parent of Ditech Financial – the nation’s 13th largest residential servicer – reported...


July 13, 2017 - Inside Mortgage Finance

CFPB Finally Issues TRID 2.0 Clarifying Final Rule, Decides to Handle the ‘Black Hole’ Separately

After a few months of delay, the Consumer Financial Protection Bureau last week issued its long-awaited final rule clarifying a number of aspects of its integrated disclosure rulemaking under the Truth in Lending Act and the Real Estate Settlement Procedures Act, otherwise known as TRID 2.0. The most noteworthy revisions relate to good faith and revised disclosures, calculating cash to close, construction-to-permanent loans, and the sharing of disclosures during the origination process. In terms of good faith and revised disclosures, the 2017 TRID rule provides...


July 13, 2017 - Inside Mortgage Finance

CFPB Mortgage Servicing Rules Stabilized Market But Also Introduced Many Unintended Consequences

The mortgage servicing rules the Consumer Financial Protection Bureau promulgated in the wake of the mortgage market’s collapse brought much-needed stability to the loan servicing arena. But they also have had a host of unplanned side effects that continue to haunt the market to this day. That’s one of the prime takeaways from comments provided by some top lender/servicers and industry trade groups, in response to the CFPB’s announcement that it would begin its five-year assessment of its servicing rules as per the requirements of the Dodd-Frank Act. Wells Fargo said...


July 13, 2017 - IMFnews

Short Takes: A Big Earnings Boost for Fannie and Freddie? / The Greenwich-Ameriquest Connection / IMA Selling GSE ‘Flow’ Package / Progress Ups its SFR MBS Deal / PHH Hires LenderLive Executive

The $5.5 billion (to be) paid by RBS should boost GSE earnings big time...


July 13, 2017 - IMFnews

CFPB Servicing Rules Stabilized Market, but Unintended Consequences Too

One negative effect: the costs required to service both performing and nonperforming loans have increased substantially.


July 12, 2017 - IMFnews

FHFA Reaches $5.50 Billion Settlement with Royal Bank of Scotland

RBS will pay approximately $4.53 billion to Freddie and approximately $975 million to Fannie.


July 12, 2017 - IMFnews

HUD Mortgagee Review Board Suspends PA Lender Seckel Capital

As IMFnews went to press, Seckel was said to be in a meeting and could not be reached for comment.


July 12, 2017 - IMFnews

Flagstar Gets Rated, a Sign that it May Become More Involved in Jumbo MBS?

Jumbos accounted for 5.6 percent of Flagstar’s residential originations during the period…


July 11, 2017 - IMFnews

Short Takes: It’s Alive Again (Well, Sort Of) / Sindeo’s Roots / The Mortgage Tech Race / Happy Anniversary Fannie and Freddie (Soon) / New Hires for mREIT Giant Annaly

There's a race on to see who will be the first to deliver a best-in-class lending automation product that the consumer trusts, said consultant Paul Hindman...


July 11, 2017 - IMFnews

CFPB Issues Final Rule to Ban Mandatory Arbitration in Consumer Financial Contracts

However, Congress has already prohibited arbitration agreements in the largest market the agency oversees: residential mortgages.


July 11, 2017 - IMFnews

More GSE Cases Filed Arguing that the FHFA’s Structure is Unconstitutional

FHFA’s status as an independent agency headed by a single director makes it different from almost every other independent agency…


July 11, 2017 - IMFnews

Will Rep. Hensarling Deal on GSE Reform?

The big question: Will the Chairman of the House Financial Services Committee support an explicit government guarantee on conventional MBS?


July 10, 2017 - IMFnews

Short Takes: More Regulations to Think About / $5 Trillion in ‘Tappable’ Equity / Don’t Forget to Audit Your Closing Agents / PennyMac Renegotiates Repo Deal / A New Hire for Mortgage Network

Time to audit your closing agents?


July 10, 2017 - IMFnews

VRM Wins 10-Year Contract to Oversee REO, Service VA Loans

The deal was negotiated from a previous five-year contract that was awarded to VRM…


July 10, 2017 - IMFnews

Walter Gets Extension on Warehouse Waivers, but its Advance Rates are Reduced

Walter said it will continue to seek appropriate amendments and waivers...


July 10, 2017 - IMFnews

Appeals Court: Mortgage Underwriters are Eligible for Overtime Pay. But a Split Appears

Overtime pay for underwriters will remain a focus of litigation because courts are split on the issue, according to the Mortgage Bankers Association.


July 7, 2017 - Inside FHA/VA Lending

FHA Provides Additional Guidance For Using New Loan Review System

The latest issue of FHA’s Lender Insight provides additional information to lenders regarding the new Loan Review System that was launched on May 15, 2017. FHA urged lenders to keep their contact information current in FHA Connection and in the Lender Electronic Appraisal Portal so that they receive automated system notifications on time. Also, lenders should review current FHAC user access for appropriate roles, the agency added. Lenders’ in-house FHAC application coordinators are authorized to grant access to, and assign roles within, the LRS. Having the correct roles should enable users to access the system from the FHAC menu, the FHA said. In addition, the lender must take a photo of any error messages that might appear on screen before contacting the FHA Resource Center, the agency advised. Be prepared to provide the date and time of the attempted login, user ID, lender user ID and the ...


July 7, 2017 - Inside FHA/VA Lending

VA Seeks Continued Use of Form Allowing Lenders to Auto-Close

The Department of Veterans Affairs is seeking approval from the Office of Management and Budget to continue collecting information considered crucial in approving certain lender requests to close VA loans automatically. Currently, non-supervised VA lenders requesting approval to close VA loans on an automatic basis use VA Form 26-8736 to submit the information needed for VA approval. Upon receiving the form, the appropriate VA regional loan center processes and evaluates the information. Without the required data, VA would not be able to determine if a non-supervised lender is qualified for automatic loan processing. The required data include, among other things, a resume of each principal officer’s experience in mortgage lending in a managerial capacity and the latest financial statements audited and certified by a certified public accountant. The form also requires a listing of all ...


July 7, 2017 - Inside FHA/VA Lending

HUD Study Finds Rural Applicants More Sensitive to Insurance Costs

New research from the Department of Housing and Urban Development has found that, despite their differences, the FHA and the U.S. Department of Agriculture rural mortgage programs overlap considerably. The study, “Mortgage Choice in Rural Housing,” also found that pricing, rather than underwriting, drives borrowers’ decision to obtain either an FHA or Rural Housing Service-guaranteed mortgage loan. The study’s findings can help guide the policy debate of whether elimination of the RHS home-loan guarantee program or consolidation with the FHA can help simplify and streamline rural-housing financing, according to authors Kevin Park and Joshua Miller. The study used Home Mortgage Disclosure Act data, focusing on first-lien applications for purchase of owner-occupied houses between January 2012 and September 2015. Loan amounts may not exceed the ...


July 7, 2017 - Inside FHA/VA Lending

VRM Wins 10-Year Contract to Oversee REOs, Service VA Loans

The Department of Veterans Affairs has awarded a 10-year contract to VRM Mortgage Services to manage VA’s real estate-owned assets and service its loan portfolio. The contract requires VRM, a 10-year-old California-based real estate services contractor, to manage, market and sell VA REO properties, and provide other real estate services as well. The new contract was negotiated from a previous five-year contract that was awarded to VRM when VA consolidated both REO management and portfolio servicing into a single contract.VA has often sold conveyed properties with seller loan financing, known as vendee loans, to help keep distressed vet homeowners in their homes. Vendee lending is an arrangement whereby a buyer uses VA financing to purchase a property in the agency’s REO inventory. “Once a loan is sold under the vendee financing program, we would monitor that loan as well as ...


July 7, 2017 - Inside FHA/VA Lending

FHA Lender Pays $4.2 Million to Resolve False Claims Allegations

Prospect Mortgage of Sherman Oaks, CA, this week joined a growing list of FHA lenders that have opted to settle federal false claims allegations arising from flawed underwriting and poor quality control. Prosecutors with the U.S. Attorneys Offices for the Northern Districts of Georgia and California announced a $4.16 million settlement with Prospect stemming from alleged fraudulent FHA lending practices at two of its Southeastern branches. An FHA direct endorsement lender, Prospect’s branches in Florida and North Carolina allegedly violated the False Claims Act by falsely certifying compliance with FHA underwriting and quality control requirements. Consequently, the FHA suffered substantial losses in claim payments when the loans defaulted. HUD’s Atlanta Home Ownership Center reported that Prospect had a 12.29 percent default rate, well in excess of the national average, between December 2007 and ...


July 7, 2017 - Inside FHA/VA Lending

DOJ, HUD Expand FCA Scrutiny to FHA Servicing, Reverse Mortgages

Mortgage compliance experts are cautioning FHA servicers to tread carefully around loss mitigation, annual certifications and reverse mortgages, which could be a potential minefield for False Claims Act lawsuits. While FHA lenders’ exposure to FCA risk remains, the Department of Justice and the Department of Housing and Urban Development have increased their scrutiny of FHA servicing practices for potential violations, according to Phil Schulman and Kristie Kully, both partners in Mayer Brown’s Washington office. In a recent podcast, Schulman warned of increasing DOJ and HUD scrutiny of FHA servicing practices in the last 18 months, a worrisome shift from the origination side, which has seen an estimated $5 billion in settlements and penalties since 2011 for violations of the FCA and the Financial Institutions Reform, Recovery and Enforcement Act. Since 2008, mortgagees participating in ...


July 7, 2017 - IMFnews

State Agencies Cite Nonbank Servicers, Raise Compliance Concerns About Shift to Purchase Lending

Roughly 36 states and 104 state examiners participated in the coordinated mortgage exams…


July 6, 2017 - Inside Mortgage Finance

State Agencies Cite Nonbank Servicers, Raise Compliance Concerns About Market Shift to Purchase Mortgages

Compliance issues involving nonbank servicers remain an ongoing problem, according to new reports from state regulators. And the regulators raised concerns about how a shift by lenders to purchase mortgages increases compliance risks. “The increase in transfers of mortgage servicing rights to non-depositories in recent years has stressed these servicers’ sometimes inadequate operating systems and infrastructures, requiring greater regulatory attention,” the Multi-State Mortgage Committee said in a report to state regulators. The MMC was established by state regulators to supervise multi-state nonbank mortgage entities. Eight mortgage-related exams were...


July 6, 2017 - Inside Mortgage Finance

Mortgage M&A Market Heats Up: Freedom And Guild Are Buyers, NYCB Exits Business

Fresh off agreeing to buy $20 billion in mortgage servicing rights and production assets from New York Community Bancorp, Freedom Mortgage is in the hunt for more deals. “We’re looking and we’ve had people approach us with opportunities,” company founder and CEO Stanley Middleman told Inside Mortgage Finance. “We’re working on several MSR acquisitions right now.” Middleman declined...


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