Fair lending, along with unfair, deceptive and abusive acts and practices (UDAAP), will become increasingly significant and potentially more problematic for the mortgage lending community as regulators at the Consumer Financial Protection Bureau pay more attention to such issues going forward, a top consultant told industry representatives last week. “The keys for mortgage lending, from the enforcement side, are going to be fair lending – the Community Reinvestment Act and fair lending have become very entwined – and UDAAP,” said Jo Ann Barefoot, co-chair of Treliant Risk Advisors and former deputy comptroller of the currency, to attendees of a mortgage regulatory conference sponsored in the nation’s capital by SourceMedia.

Top lender groups are asking the Consumer Financial Protection Bureau to provide a little more clarification to its recent interim final regulation on alternative mortgage transactions, particularly when it comes to the definition of such a transaction. The American Bankers Association and the Mortgage Bankers Association both support the CFPB’s inclusion of renegotiable rate balloon and shared appreciation mortgages within the AMT definition. However, they both asked that some of the reg’s commentary be clarified to explicitly state that preferred rate loans with fixed rates and price level adjusted mortgages, otherwise considered “variable rate transactions,” also be identified as examples of alternative mortgage transactions.

Certain elements of the Dodd-Frank Act such as the new standard related to unfair, deceptive and abuse acts and practices (UDAAP), along with the Federal Reserve’s “ability to repay” provisions proposal, present “significant litigation risk” to lenders, a top litigation attorney told industry representatives early this week. Speaking to attendees at the Mortgage Bankers Association’s regulatory compliance conference in Washington, DC, on Sunday, Andrew Stutzman, a partner with Stradley, Ronon, Stevens & Young LLP, said, “I’m very troubled by Dodd-Frank in many respects. I think it … and the regulations that are coming out and have come out – the Fed’s ability-to-repay proposal – are extremely complicated and extremely confusing.”

Among the sensitivities associated with the mortgage industry’s foreclosure struggles, none is more fraught with headline risk and the potential for political pressure than foreclosing on an active-duty servicemember of the U.S. military, a top industry attorney told compliance officials this week. “It’s bad enough when you get it wrong on a regular foreclosure action, but when you get it wrong for one of our servicemembers, that’s really where you’re going to have a reputation killer,” Leah Getlan, assistant general counsel at Capital One, told attendees this week at the Mortgage Bankers Association’s annual regulatory compliance conference in the nation’s capital. “I have seen it from time to time, but thankfully, not that often.”

The Consumer Financial Protection Bureau may be making substantial progress on its integrated consumer mortgage disclosure form, but the land title sector is concerned the prototype products generated to date are inadequate when it comes to the disclosure of specific settlement costs. The American Land Title Association told the bureau that the CFPB’s Know Before You Owe project has successfully identified ways to improve the disclosure of loan costs by making them more transparent. However, suggestions for how to disclose some settlement costs, in particular title insurance and attorney fees, have not reached a desired level of transparency and lack the necessary flexibility to avoid consumer confusion.

With additional rulemaking still expected from the Consumer Financial Protection Bureau to flesh out some loan originator compensation provisions of the Dodd-Frank Act, state regulators are getting ready to release their own examination guidelines related to mortgage originator compensation for non-depository institutions, based on the Federal Reserve’s rule issued earlier this year. The Conference of State Bank Supervisors and the American Association of Residential Mort-gage Regulators have been working together since May drafting guidelines for implementation of the...

The roiling mortgage lending marketplace continues to present some lenders with even more challenges that force the adoption of coping strategies to cut their losses, while opening up fresh opportunities for others to deploy the next phase in their long-term strategic plans. loanDepot.com, based in Foothill Ranch, CA, the latest start-up by the founders of E*TRADE Mortgage and LendingTree Loans, falls into the latter category, recently launching its new national expansion plan with the opening of a new origination center in Franklin, TN, just outside of Nashville. Company President Tomo Yebisu said Franklin was chosen because of...

The efforts of the White House, in concert with the Federal Housing Finance Agency, to jumpstart the underperforming GSE refinance program is almost certain to disappoint when final details are made public, due in no small part to overpromised and inflated expectations, say mortgage market watchers.FHFA Acting Director Edward DeMarco said his agency is “carefully reviewing” the two-year old Home Affordable Refinance Program with the White House in order to help a greater number of underwater Fannie Mae and Freddie Mac borrowers into lower-rate loans.

Mortgage lending to finance home purchases increased a hefty 32.2 percent from the first quarter to the second quarter of 2011, helping to offset a huge drop in refinance activity. Housing sales jumped 43.6 percent during the second quarter, although the housing market in 2011 is still considerably slower than it was a year ago. Conditions looked better in the second quarter largely because the first quarter of 2011 was one of the worst on record for housing sales and home-purchase lending. Fewer than 1 million new and existing home sales were reported during the first quarter of 2011, yielding a record low of just... [Includes two data charts]

Even as industry observers agree that the White House’s announced attempt to improve refinance efficiency through an expansion of the Home Affordable Refinance Program is worthwhile, there remain too many unknowns at the moment to judge how effective a HARP makeover will be. As part of his much anticipated speech before a joint session of Congress last week, President Obama noted his administration’s intent to help homeowners. “To help responsible homeowners, we’re going to work with federal housing agencies to help more people refinance their mortgages at interest rates that are now near 4 percent,” said Obama. “That’s a step that can...