The mortgage lending industry is apprehensive about the multitude of mortgage servicing rules coming its way, and that anxiety is probably well justified, leading industry representatives suggests. Beyond last year’s consent orders and last month’s $25 billion mortgage servicing settlement and all the ramifications they have for industry servicing practices going forward, the most immediate concern has to do with a proposed rule on mortgage servicing due out this summer from the Consumer Financial Protection Bureau. Last week, the CFPB made a public “pre-announcement” of the...

An unusual coalition of dozens of lender, realtor, consumer and civil rights groups late last week urged the Consumer Financial Protection Bureau to write a broadly defined “qualified mortgage” as part of the ability-to-repay final rule it’s putting together as per the Dodd-Frank Wall Street Reform and Consumer Protection Act. The CFPB is expected to issue a proposed rule defining a QM shortly. As per the ability-to-repay standards of Dodd-Frank Section 1412, a qualified mortgage cannot have points and fees in excess of 3 percent of the loan amount. The groups are worried...

Four mortgage- and financial services-related trade groups told the Consumer Financial Protection Bureau they’re unhappy the CFPB hasn’t adopted more of the suggestions they’ve made over the numerous iterations the bureau has put out of its Know Before You Owe consolidated consumer disclosure project. The CFPB is currently on the ninth version of its evolving disclosures model. “During the Know Before You Owe iterations, we have submitted a large number of comment letters that walk the CFPB through a large number of very technical, but important details,” the groups said...

Last week, key Republicans on the House Financial Services Committee asked banking regulators to provide a detailed analysis of a key provision in the controversial proposed rule on risk retention in securitization that could make non-agency MBS issuance unprofitable for issuers. In a letter to the agencies charged with implementing the risk-retention requirements of the Dodd-Frank Act, Republicans Spencer Bachus (AL) and Scott Garrett (NJ) expressed their concerns about the premium capture cash reserve account requirements drafted by the regulators. The PCCRAs would require issuers to hold any premiums...

Consumer Financial Protection Bureau Director Richard Cordray last week indicated to members of Congress that the bureau is still working to clarify all the nuanced meanings of the term “abusive” as it relates to prohibited mortgage lending activities per the Dodd-Frank Wall Street Reform and Consumer Protection Act. Responding to a parsing of the definition of the word under questioning before the House Financial Services Committee, Cordray acknowledged some aspects of the Dodd-Frank Act’s abusive standard are “situational and somewhat subjective in nature,” such as ...

The full House of Representatives made some progress last week in dealing with a potential blind spot in the Dodd-Frank Wall Street Reform and Consumer Protection Act when it comes to maintaining the confidentiality privilege for information and communication shared with the Consumer Financial Protection Bureau. The House passed H.R. 4014, which was introduced Feb. 13, 2012, by Reps. Bill Huizenga, R-MI, Shelley Capito, R-WV, and Spencer Bachus, R-AL. H.R. 4014 would amend Sections 11(t) and 18(x) of the Federal Deposit Insurance Act, 12 U.S.C. §§ 1821(t), 1828(x), to make sure the CFPB can ...

Lenders, home builders and affiliated settlement service companies are lobbying the Consumer Financial Protection Bureau to preserve the ability of affiliated settlement service providers to do business with one another under the final ability-to-repay/qualified mortgage rule the agency is charged with writing. “We strongly support a competitive mortgage market where builders and lenders large and small, unaffiliated and affiliated, as well as other settlement service providers actively compete to provide sound mortgage products and ancillary settlement services to consumers,” said the Leading...

Regulatory streamlining is absolutely essential if smaller mortgage lenders are going to survive the threat they face from their enormous regulatory burdens, two industry trade groups told the Consumer Financial Protection Bureau recently. “Currently, the industry is dealing with several new rules, including those under the Secure and Fair Enforcement Act for Mortgage Licensing and the Truth in Lending Act, and faces an unprecedented wave of additional rules required under Dodd-Frank Wall Street Reform and Consumer Protection Act,” said the Consumer Mortgage Coalition ...

Though Federal Reserve Chairman Ben Bernanke stated last week that the regulatory agencies would not hit the July 21 deadline for a finalized Volcker rule, such news only leaves the securitization industry with more time to stew in anxiety about a regulation that many feel should not apply to them. The controversial Volcker rule, one of the many required by the Dodd-Frank Act, is designed to limit the ability for financial institutions to benefit financially by shorting their customers, through the prohibition of federally insured banks engaging in proprietary trading, covered transactions with hedge funds or...

The Consumer Financial Protection Bureau released a draft monthly mortgage statement last week that the agency hopes will make it easier for homeowners to understand their mortgage and get a better handle on costs and fees. Compliance by mortgage servicers and creditors might get a boost in the process. The model document that was issued includes the principal, the current interest rate, the next date on which the interest rate may change, a description of late payment fees and a telephone number and email address that may be used to contact the servicer...