Creditworthy buyers are being constrained by dated scoring systems, according to a study released this week by VantageScore Solutions, which says there are benefits to Fannie Mae and Freddie Mac, as well as consumers, if a new model is adopted. The enterprises could increase their revenue while expanding access to mortgages to a more diverse group of consumers. The credit reporting company has been working to get Fannie and Freddie to embrace a new credit reporting system for years now. Its new report comes on the heels of the Federal Housing Finance Agency comments in its 2015 scorecard directing the GSEs to look into potential alternative forms of credit scoring.

The CFPB issued a formal notice and request for information on how the credit card market is functioning and the effect credit card protections are having on both issuers and consumers. As per the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act, the CFPB is required to conduct a review of the consumer credit market every two years. Among its focal points, the bureau wants to know how the terms and conditions of credit card agreements have changed since it conducted its review of the credit card market two years ago. “The bureau is looking to see how card issuers may have changed their pricing, marketing, underwriting, or other practices and whether those changes have benefited or harmed consumers,” the ...

CFPB Updates TRID Documentation. Last week, the CFPB put out some updates to the implementation materials for its integrated disclosure rule under the Truth in Lending Act and the Real Estate Settlement Procedures Act. The updated material lines up with the rule that was published Feb. 19, 2015, that modifies the 2013 TILA/RESPA integrated disclosure rule (TRID). This rule extends the timing requirement for revised disclosures when consumers lock a rate or extend a rate lock after the Loan Estimate is provided and permits certain language related to construction loans for transactions involving new construction on the LE. Additionally, the bureau is making non-substantive corrections, including citation and cross-reference updates and wording changes for clarification purposes, to various provisions of ...

Credit unions support a CFPB proposal that would let them off the hook for one year when it comes to submitting their credit card agreements to the bureau while the agency works to develop a more streamlined and automated electronic submission system. Other requirements, including card issuers’ obligations to post currently-offered agreements on their own Web sites, would remain unaffected by the proposed rule, which was issued in February. Currently, card issuers are required to send agreements to the bureau manually through e-mail. The CFPB intends to come up with a new system through which card issuers would be able to upload agreements directly to the bureau’s database and eliminate the process of e-mail submissions. Among the supporters was the ...

Loan Modification Trial Payment Plans for Forward Mortgages. The Department of Housing and Urban Development has announced requirements for trial plan duration, required signatures, and reporting for trial payment-plan agreements, and the conditions under which FHA deems a TPP to have failed.Lenders must implement the requirements in Mortgagee Letter 2015-07 for all TPPs offered to borrowers on or after June 1, 2015. FHA Publishes Additional Sections of HUD Single-Family Policy Handbook. The FHA has published additional sections for the SF Handbook, including the following: Doing Business with FHA – Lenders and Mortgagees Doing Business with FHA – Other participants in FHA Transactions – Appraisers; Quality Control, Oversight and Compliance – Lenders and Mortgagees; Quality Control Oversight, and Compliance – Other Participants in FHA Transactions – Appraisers ...

Commercial banks and thrifts reported another decline in their ABS holdings during the fourth quarter of 2014, according to a new Inside MBS & ABS analysis of call-report data. In aggregate, banks and thrifts held $159.22 billion of ABS in their held-to-maturity and available-for-sale retained portfolios as of the end of last year. That was the industry’s lowest level of ABS investment since the middle of 2012, and it represented a 3.1 percent drop from a revised third-quarter total of $164.35 billion. The biggest component in the aggregate portfolio was...[Includes two data charts]

Industry participants continue to call for changes to how the Consumer Financial Protection Bureau operates its consumer complaint database. A proposal in December to renew the CFPB’s Consumer Response Intake Form drew criticism from the Mortgage Bankers Association and others. “CFPB and industry data both show that a small fraction of consumer complaints warrant any action beyond an explanation,” Stephen O’Connor, a senior vice president of public policy and industry relations at the MBA, said in a comment letter to the CFPB. The Office of Management and Budget approved...

One of the common elements in the CFPB’s growing regulatory interest over prepaid cards and payday lending is the challenge the bureau faces in balancing strong consumer protections from excessive fees or high interest rates, on the one hand, and maintaining consumer access to such products, on the other.During a hearing last week before the House Financial Services Committee, CFPB Director Richard Cordray felt political pressure to strike the perfect balance in both lending sectors. Ranking Member Maxine Waters, D-CA, came out strongly in favor of cracking down on lenders that service the payday market, otherwise referred to as small-dollar lending. “Do you think there is any way we can bring payday lending under control anytime soon?” she asked ...

What started as an alternative to investing in certificates of deposit has attracted interest from institutional investors and even some ABS issuance. Marketplace lending, also known as peer-to-peer lending, has strong growth prospects, according to industry analysts. Eric Rapp, a senior vice president at DBRS, estimated that $9.0 billion in marketplace loans were originated in 2014, including personal loans and financing for small business, students and real estate. “It’s still relatively small, but it’s got a fast growth trend,” he said late last week during a teleconference hosted by DBRS. Rapp said...

Rep. Waters Wants Clarity on Corinthian Student Loan Refunds. House Financial Services Committee Ranking Member Maxine Waters, D-CA, wants more clarity about the recent agreement to provide $480 million in financial relief to students wrestling with predatory loans from now-defunct Corinthian Colleges. In letters to CFPB Director Richard Cordray and David Hawn, president and CEO of Education Credit Management Group, the company that acquired a majority of the college’s campuses, Waters said, “[A]s you both well know, the student loan servicing industry, much like the mortgage servicing industry, has often worked as a disservice to its customers. “Furthermore, students who are to receive private debt relief were intentionally misled when the debt was incurred, and there is undoubtedly confusion among ...