Late last week, secondary market officials said the CFPB has been informed about the recent failure of W.J. Bradley Mortgage of Colorado and how it was caused by jumbo loans backing up on the nonbank’s warehouse line due to errors complying with the bureau’s integrated disclosure rule. At this point, it’s hard for some industry observers and officials to gauge just how bad those errors were. However, the bigger issue may be that curing TRID errors (especially small ones) is the key to solving the current TRID-mess afflicting the residential finance industry. Some industry observers wonder whether a fix can be made that helps mortgage compliance attorneys sleep at night. Right now, the answer to that question appears to be ...
Despite efforts by certain factions of the industry to come up with legal protections regarding errors on TRID disclosures, the “scratch and dent” market for problem loans continues apace. According to Jeff Bode, CEO of Mid America Mortgage – one of the most active buyers of mortgages with TRID errors – product is still being offered on a regular basis. “Offerings have not slowed,” Bode told affiliated publication IMFnews, “though, eventually, I think it will.” On average, Mid America bids on at least eight TRID scratch-and-dent loans a day. Some lenders report they have totally adjusted to the new TRID disclosures, while others continue to be plagued by errors and delays. Meanwhile, the CFPB plans to hold an hour-long webinar on Tuesday,...
With the CFPB declining to provide any more formal guidance on legal liability for secondary market players when originators make errors in TRID mortgage disclosures, a group of due diligence firms is moving ahead with its own clarifications. High-level sources familiar with the matter who spoke under the condition of anonymity said the forthcoming clarifications have been vetted by legal counsel and are almost ready for approval. Several top third-party review/due diligence firms are involved in the effort, including Clayton Holdings and Opus. All the major rating agencies are reportedly involved as well. “We’re working to calibrate our methodology, to bring it in line with the spirit of the CFPB letter,” said one attorney close to the matter. He was ...
Independent mortgage banks and mortgage subsidiaries of chartered banks were only able to squeeze out a paltry net gain of $493 on each loan they cranked out in the fourth quarter of 2015, a fraction of the $1,238 generated in the third quarter of 2015, according to the Mortgage Bankers Association’s Quarterly Mortgage Bankers Performance Report. Proximity and correlation are not necessarily causation. But sometimes they are. In this case, TRID probably had something to do with the plunge. “Production profits dropped by over 60 percent in the fourth quarter of 2015 compared to the third quarter,” said Marina Walsh, MBA’s vice president of industry analysis. “With the Know Before You Owe (TRID) rule going into effect last Oct. 3 ...
A new survey by San Diego-based ClosingCorp of 1,000 repeat homebuyers who had purchased a home both before and after the CFPB’s integrated disclosure rule took effect found both negative and positive effects. To begin with, 64 percent of respondents said it was easier getting a mortgage under the old rules than under TRID. When it came to the amount of time it took to get and close a mortgage, 57 percent said it took longer under TRID than it did under the previous disclosure regime. Also, 51 percent of the respondents said there were more “unexpected costs, fees and surprises” in their most recent experience. On the other hand, 63 percent said that the new forms for loan estimates ...
Industry groups representing mostly smaller mortgage lending institutions had some suggested revisions for the CFPB to take into account as it considers updating its Home Mortgage Disclosure Act resubmission guidelines. “The current resubmission standards are simply impractical and will become even more unattainable when the revised HMDA rule goes into effect,” said the American Bankers Association and the Consumer Bankers Association in a joint comment letter to the bureau. Equally as important, the current standards demand a level of accuracy that far exceeds what is necessary to achieve HMDA’s purpose. “More reasonable data integrity standards will underline our members’ focus on responsibly providing credit to consumers who meet prudent underwriting standards; they will not detract from these vital purposes,” they ...
The Consumer Mortgage Coalition and the Mortgage Servicers Working Group wrote the CFPB recently to express their concerns with the bureau’s proposal on successors in interest and urged a more simplified approach instead. “While the CFPB stated that the successors in interest proposal was designed to make account information available to confirmed successors in interest, and to make loss mitigation procedures available to them, the proposal would not make these available,” the groups said. To begin with, privacy protections that the CFPB has not proposed to amend would continue to prohibit servicers from providing information absent borrower consent. “When the borrower does consent to disclosures, the disclosures are permitted under current law,” the CMC and the MSWG note. Also under ...
CFPB Now Accepting Complaints About Online ‘Marketplace’ Lenders. The bureau is now taking complaints from the public about online marketplace lenders, including companies that play in the mortgage space. “When consumers shop for a loan online we want them to be informed and to understand what they are signing up for,” said CFPB Director Richard Cordray. “All lenders, from online startups to large banks, must follow consumer financial protection laws. By accepting these consumer complaints, we are giving people a greater voice in these markets and a place to turn to when they encounter problems.” The bureau also released a consumer bulletin that outlines tips for consumers who are considering taking [with exclusive data chart] ...
Full Senate to cosponsor a bipartisan bill that aims to make sure guaranty fees from Fannie Mae and Freddie Mac will not be used for other purposes. Legislation, S.752, was introduced by Sens. Bob Crapo, R-ID and Mark Warner, D-VA, in March 2015, to establish a scorekeeping rule so g-fee increases aren’t going toward offsetting spending that increases the deficit. Tom Salomone, president of the NAR, said any time g-fees are extended, increased and diverted for unrelated spending, homeowners are charged more for their mortgage and taxpayers are exposed to additional long-term risk. He emphasized that the purpose of g-fee revenue is to guard against GSE credit losses and should only be used to protect taxpayers from mortgage losses.