Tammy Butler, the director of fair lending and compliance for Optimal Blue, a leading pricing engine, said she’s been hearing from one attorney and industry consultant after another that the time of mortgage lenders naming their fees just to re‐name profit is not going to go over well with the CFPB. “In fact, those who have been through the exams or been fined have learned the hard way that complete transparency to the consumer is a must,” Butler said.For instance, Butler has heard some lenders plan on lumping a...
There are plenty of challenges associated with the CFPB’s new standards for error notices and information requests, which are part of the bureau’s new mortgage servicing standards, and policy analysts at PricewaterhouseCoopers have some compliance suggestions to help companies measure up. “The new standards for error notices and information requests are expected to have a substantial impact on all mortgage servicers,” the PwC analysts said in a recent overview. “Implementing the changes will require careful review and possibly...
The CFPB may need to reach out more to consumers in areas that face the highest risk of foreclosure, and intensify pressure on lenders that serve older Americans, according to a new analysis of the CFPB’s consumer complaint database by a handful of faculty members at the Yale University School of Law. Analyzing a new data set of 110,000 consumer complaints lodged with the bureau, they found that Bank of America, Citibank and PNC Bank were “significantly less timely in responding to consumer complaints than the average financial...
CFPB examiners found numerous loss mitigation mistakes, including inconsistent communications with borrowers, spotty loss mitigation underwriting and long application review periods. All this could lead to new regulations for servicers.
FHA lenders have gradually stretched to originate loans for borrowers with more modest credit scores in recent quarters, although these borrowers typically are better positioned to keep up with their payments, according to an Inside FHA Lending analysis of data released by the agency. The average credit score for single-family loans endorsed in the second quarter of 2013 was 693 – the lowest such average in nearly four years. This is partly the result of a shift toward more purchase-money mortgages, which generally have ... [1 chart]
Parties to trustee lawsuits challenging a city’s use of eminent domain to deal with foreclosures are gearing up for a face-off at an injunction hearing Sept. 13 in federal district court in San Francisco. The city of Richmond, CA, the defendant in the lawsuit, has suffered setbacks in the last few days and has yet to make good on its threat to initiate eminent domain proceedings after investor trustees rejected its offer to purchase distressed mortgages for restructuring. Wells Fargo and Deutsche Bank, acting as trustees for a group of ...
Sen. Elizabeth Warren, D-MA, is asking the Department of Justice to explain why it failed to get “adequate” compensation from major mortgage servicers for fraud committed against the FHA. In an Aug. 21 letter to U.S. Attorney General Eric Holder, Warren raised concerns about the $225 million paid by five servicers last year to obtain releases from False Claims Act liability stemming from fraudulent mortgage insurance claims the servicers submitted to FHA and other agencies from 2008 to 2010. The FHA’s woeful financial condition led to legislative reform efforts, including the ...
The FHA is easing the waiting period and eligibility criteria for certain borrowers with previous bankruptcies, foreclosures, deeds-in-lieu of foreclosure and short sales who would like to purchase a home again. According to Mortgagee Letter 2013-26, borrowers who may be otherwise ineligible for an FHA-insured mortgage due to the agency’s required waiting period may now be able to apply for a new purchase mortgage loan because of the shortened waiting period and if they meet the criteria. This latest initiative to help borrowers whose credit had been impaired by the financial crisis is called ...
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