The Consumer Financial Protection Bureau’s new integrated disclosure rule didn’t cause a sig-nificant spike in delayed home sales in October, according to the latest Campbell/Inside MortgageFinance HousingPulse Tracking Survey. The Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure rule took effect near the beginning of October. Many industry participants predicted that the new rule would disrupt mortgage closings ...

With the mortgage lending industry’s use of marketing services agreements under the Real Estate Settlement Procedures Act likely hanging in the balance, the CFPB detailed its anti-kickback legal arguments against PHH Corp. and its mortgage units in its “reply” brief with the U.S. Court of Appeals for the District of Columbia, filed earlier this month. In PHH Corp., et al., v. CFPB, the first main argument the bureau made is that PHH violated RESPA Section 8(a) because it entered into agreements with mortgage insurers so that whenever an insurer received a referral from PHH, the insurer paid PHH a kickback in the form of premiums for mortgage reinsurance. “PHH thus committed a separate violation every time it accepted a kickback ...

The Office of the Comptroller of the Currency informed lenders recently it will soon start examining banks for their compliance with the Truth in Lending Act and Real Estate Settlement Procedures Act Integrated Disclosure rule, and issued some updated guidance to help institutions get ready. In OCC Bulletin 2015-42, the agency said during initial examinations for compliance with the rule, OCC examiners will be evaluating a bank’s compliance management system and overall efforts to come into compliance, “recognizing the scope and scale of changes necessary for each bank to achieve effective compliance.”Further, the OCC said, “Examiners expect banks to make good faith efforts to comply with the rule’s requirements in a timely manner. Specifically, examiners are considering the bank’s ...

Buyer Agents Report Delays in Closing, Thanks to TRID. One month into the CFPB’s Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure (TRID) rule, some real estate closings are already being affected, according to a recent survey conducted by the National Association of Exclusive Buyer Agents. The survey went out to brokers across the U.S. and nearly 20 percent said they are already seeing issues, mostly delays in closing. According to one respondent, “Lenders are almost all asking for 45 days to closing versus the previous 30 days.” Another respondent stated, “We’ve been advised to prepare for further delays until everyone has more experience with the new CFPB/TRID regulations.” “At NAEBA, we applaud the CFPB for its efforts ...

Facing the possibility of a potential False Claims Act lawsuit, PHH Corp. is reconsidering its participation in the FHA mortgage insurance program. Though PHH’s FHA segment represents only 3 percent of its mortgage volume over the past 12 months, the company will proceed cautiously as it evaluates the risk-adjusted return of FHA products and programs, said Glenn Messina, PHH president and chief executive.Ranked 50th among FHA lenders as of June 30, 2015, PHH expects more regulatory challenges in 2016 as well as rising compliance costs, said Messina during a third-quarter earnings call. In its latest quarterly filing, PHH disclosed receiving a subpoena from the inspector general of the Department of Housing and Urban Development for documents related to, among other things, FHA loan origination and underwriting practices. Like several other FHA lenders, PHH is ...

The legal table is set for a potentially pivotal court ruling on the mortgage industry’s use of marketing services agreements under the Real Estate Settlement Procedures Act, now that the Consumer Financial Protection Bureau submitted its “reply” brief with the U.S. Court of Appeals for the District of Columbia in the agency’s dispute with PHH Mortgage. In its filing last week in PHH Corp., et al., v. CFPB, the bureau did not try to assert that all MSAs are unlawful or illegitimate, in and of themselves. “Parties to illegal kickback agreements are unlikely to put those agreements into writing. So those agreements may have to be identified based on circumstantial evidence and inference,” said the CFPB. “But RESPA Section 8(c)(2) clarifies when it is not proper to infer an illegal agreement. Illegality cannot be inferred merely because a party that received referrals makes payments to a party that made the referrals. “Moreover, such an arrangement is...

A month has passed since the mortgage industry began making new Truth in Lending Act/Real Estate Settlement Procedures Act integrated disclosures (TRID) without any reports of anticipated and widespread delays in loan closings. That’s the good news. The bad news is that some lenders are being overly careful on sharing the buyer-disclosure form, which is used to pay third parties involved in the mortgage process. And that means certain vendors, including Realtors, aren’t getting paid in a timely fashion. According to interviews conducted by Inside Mortgage Finance over the past week, there also appears...

Marketing services agreements aren’t outlawed – yet. But given that the Consumer Financial Protection Bureau’s recent guidance on such arrangements doesn’t address the features of what an acceptable MSA would look like, it’s particularly challenging to figure out how best to proceed. Perhaps the only real way forward is to try to avoid those aspects of MSAs that the bureau has clearly identified as problematic, top industry compliance attorneys said during a webinar sponsored by Inside Mortgage Finance last week. “The best we can do is...

In an apparent confirmation of the fears of some industry representatives, CFPB Director Richard Cordray seemed to blame technology vendors for some of the failures the mortgage industry might have in complying with the bureau’s Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure (TRID) rule. “Quite frankly, I have been disturbed by reports I have been hearing about the vendors on whom so many of you rely,” Cordray said in a speech at the Mortgage Bankers Association’s annual convention in San Diego recently. “Some vendors performed poorly in getting their work done in a timely manner, and they unfairly put many of you on the spot with changes at the last minute or even past the due date,” ...

CFPB Director Richard Cordray pooh-pooh’ed mortgage lender concerns that the Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure (TRID) rule will hurt their business because of the need to extend closings when revisions prompt another round of disclosures. “Now, just as we heard prophets of doom bemoaning the effects of the [ability-to-repay] qualified mortgage rule before it took effect, so too we are hearing some of the same voices bemoaning the effects that the ‘Know Before You Owe’ mortgage disclosure rule will have,” the director said at the recent Mortgage Bankers Association annual convention in San Diego. “They say that by requiring closing disclosures to be provided three days in advance, the rule will delay and disrupt closings,” ...