The October 2023 final rule provided several major updates to the Community Reinvestment Act, but the rule’s implementation has been stalled due to a lawsuit by trade groups representing banks.
The Seattle-based bank attributed its decision to exit the mortgage business in part to burdensome CRA requirements. The bank received a “need to improve” CRA rating on its lending to low- and moderate-income borrowers. WaFd said it plans to appeal the rating.
The Conference of State Bank Supervisors urged the bureau to consult with individual states regarding their loss-mitigation requirements to ensure proposed changes don’t incorrectly preempt state protections.
With the bureau’s Section 1033 rule expected to be finished shortly, the regulator is interested in issuing additional rules on open banking, with one potentially focused on mortgages.
Home equity investment activity is growing thanks to ongoing home price appreciation and strong demand from both homeowners and investors in the secondary market. Regulation of the products is currently limited to a handful of states.
The statement on principles relates to the examination of lenders’ residential property appraisal and evaluation practices. Federal regulators believe it will help lenders mitigate risks due to potential discrimination or bias in appraisal practices and to promote credible valuations.
Mark McArdle, an assistant director of mortgage markets at the CFPB, provided updates on the regulator’s priorities in terms of mortgage lending at the MBA’s independent mortgage bankers conference. The top concerns are LO comp practices and fair lending.
The CFPB’s proposal on streamlining mortgage servicing standards will likely be issued this spring. The regulator is trying to balance loss-mitigation options and foreclosure protections.
The CFPB and nonbank mortgage lender Townstone Financial presented their arguments to the Seventh Circuit Court of Appeals. The arguments centered on whether ECOA applies to prospective applicants.
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