The appraisal industry is calling upon Congress to enact legislation to reform the current regula-tory structure for appraisers, at the same time warning that any unauthorized action by appraiser regula-tory agencies to toughen oversight would hurt and jeopardize the profession. Testifying before the House Financial Services Subcommittee on Insurance, Housing and Economic Opportunity last week, the Appraisal Institute said the Appraisal Subcommittee of the Federal Financial Institutions Examination Council and the Appraisal Foundation, an authorized private regula-tory body, have agreed to...

A continued outpouring of concerned industry commentary about the Consumer Financial Protection Bureau’s pending ability-to-repay rule has prompted the bureau to hit the reset button on the public comment period, giving the mortgage lending industry another opportunity to address some limited, specific issues before the rule becomes final. During a hearing in the Senate Banking, Housing and Urban Affairs Committee, Sen. Mike Crapo, R-ID, pressed his concerns about the rule with CFPB Director Richard Cordray and questioned him about the bureau’s intentions. “The housing credit market...

The Consumer Financial Protection Bureaufs recently proposed method of extending its supervisory powers to nonbank mortgage lenders it considers potentially risky seems fairly straightforward. But look closely and several potential sinkholes emerge for such lenders, one leading attorney serving the mortgage industry suggested. Despite its outward simplicity, the proposed process presents several potential pitfalls for nonbanks, according to Eric Mitzenmacher, an associate attorney in the Washington, DC, office of the K&L Gates law firm. To begin with, the bureau does not define griskh...

The Consumer Financial Protection Bureau and the four prudential regulators have released a ¡°Memorandum of Understanding on Supervisory Coordination¡± that clarifies how they plan to coordinate their supervisory activities, consistent with the Dodd©\Frank Wall Street Reform and Consumer Protection Act. Dodd©\Frank requires the CFPB and the prudential regulators ¨C the Federal Reserve, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the National Credit Union Administration ¨C to synchronize important aspects of their supervision of insured...

More than 1,800 comment letters were apparently not enough. The Consumer Financial Protection Bureau reopened the comment period last week on the pending ability-to-repay rule, with an emphasis on data relating to debt-to-income ratios. The rule will define “qualified mortgages” and the Dodd-Frank Act mandates that it be finalized by January 21, 2013. Data on agency mortgages helped prompt the request for comments, and the CFPB said it is hoping for similar data on mortgages in non-agency mortgage-backed securities ...

The Consumer Financial Protection Bureau is seeking comment and information on mortgages not financed by Fannie Mae or Freddie Mac, including those insured and guaranteed by the federal government, as it reopened the public discussion for the proposed “ability to repay” rule. New data the Federal Housing Finance Agency provided to the CFPB after the close of the rulemaking’s comment period spurred the bureau to reopen the comment period until July 9, 2012. The new FHFA data track the performance of loans purchased or guaranteed by Fannie Mae and Freddie Mac from 1997 to 2011. The CFPB also has obtained data on ...

Last week’s launch of the RMBS Working Group’s website demonstrated that government investigators see Wall Street insiders as a valuable source of information to detect and prove fraud and other misconduct in the packaging of mortgage securities. “Fraud can be hard to uncover without help from whistleblowers who were corporate insiders,” the task force said on the website. Whistleblowers can get rewards of up to 30 percent of the government’s monetary recovery based on the specific information, as well as protection from retaliation. The inclusion of a whistleblower provision in the Dodd-Frank Act has...

The Consumer Financial Protection Bureau has proposed procedures it plans to use in exercising its supervisory and enforcement authority over how nonbank consumer financial service companies (like mortgage lenders and mortgage servicers) control their third-party vendors, such as subservicers, foreclosure trustees and law firms, and force-placed insurers. It’s all about controlling the potential risk to consumers. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB has authority to supervise any nonbank that it has “reasonable cause” to determine is posing a risk...

The Consumer Financial Protection Bureau wants to hear from the industry about the costs companies anticipate incurring in order to comply with a variety of rules and requirements pending at the agency. In proposing new rules for providers in the mortgage markets, the CFPB said it will consider the potential implementation and ongoing compliance activities and associated costs of the proposed rules. “Accordingly, the bureau seeks to collect qualitative information on the potential costs of complying with potential new regulations and other effects the rules may...

Complying with all the requirements of the Real Estate Settlement Procedures Act under the new Consumer Financial Protection Bureau is going to be a much different ballgame than had been the case when the Department of Housing and Urban Development was calling the shots, a leading industry attorney indicated recently. “The bottom line on RESPA enforcement [at the Consumer Financial Protection Bureau] is that there are many enforcement powers and authorities at the bureau’s disposal,” Holly Spencer Bunting, a partner in the Washington, DC, office of K&L Gates LLP, told participants...