The Mortgage Bankers Association continues to forward to the CFPB questions and requests for clarifications on a number of issues related to the bureau’s integrated disclosure rule that have yet to be adequately addressed, such as changes to the Closing Disclosure (CD) after scheduled closing. “There are limited options under the rule, in the event a lender has provided a closing disclosure and closing is delayed for unforeseen circumstances outside the lender’s and/or the borrower’s control,” said the MBA in correspondence to the bureau. Similarly, there may be borrower and seller changes to the purchase terms. “Under the current rule and commentary, the lender apparently has no ability to provide a revised Loan Estimate (LE) or CD and re-compute the ...

Most of the mortgage industry cannot reliably confirm whether it will be ready to fully comply with the CFPB’s pending integrated disclosure rule, according to a new member survey by the American Bankers Association. Based on approximately 800 responses from bankers nationwide, “Our survey reveals that an overwhelming 74 percent of banks are using a vendor or consultants to assist with TRID implementation,” Bob Davis, head of mortgage markets at the ABA, said in a letter to CFPB Director Richard Cordray. Community banks in particular are highly dependent on the ability of vendors to deliver technology-related services that are critical to bank compliance efforts, according to Davis. “Interestingly, though, bankers from large institutions were over-represented in the survey, which implies ...

Contrary to other segments of the mortgage industry, a huge majority of title professionals will be ready to play ball when the CFPB’s TILA/RESPA integrated disclosure rule goes live Aug. 1, 2015, according to a survey conducted by the American Land Title Association. “Ninety-two percent of our survey respondents indicated their company will be prepared to implement the new forms and comply with the CFPB’s regulation,” said Michelle Korsmo, ALTA’s chief executive officer. “The land title insurance industry has been a leader in preparing the real estate industry for the new disclosures and that is reflected in the preparedness of our members.” However, perhaps not so surprisingly, collaboration with lenders and real estate agents, and potential closing delays top the ...

Sen. Richard Shelby, R-AL, chairman of the Senate Banking, Housing and Urban Affairs Committee, released the text of his pending regulatory relief bill last week. Among a handful of CFPB-related provisions is one that would grant qualified mortgage status under the bureau’s ability-to-repay rule for residential loans held in portfolio. However, as per the draft Financial Regulatory Improvement Act of 2015, certain conditions would have to apply. To begin with, the lender/creditor would have to hold the loan in portfolio from its inception, or any acquirer of the loan must continue to hold it in portfolio. Additionally, the mortgage cannot have been acquired through securitization, nor can it have certain forbidden features, like negative amortization, interest-only provisions, or a loan ...

The CFPB has launched a public inquiry into student loan servicing practices that create repayment challenges, hurdles for distressed borrowers, and economic incentives that may affect the quality of service. The bureau said it has observed that many borrowers are experiencing significant student debt stress. “Consumers have complained about billing problems associated with payment posting, prepayments and partial payments,” it said. The CFPB has also heard from distressed borrowers that student loan servicers aren’t being very useful in helping them avoid defaults and delinquencies. “Distressed borrowers complain that they are given the runaround when they ask for help, they have a hard time getting straight answers from servicing staff, and that the staff is untrained or unequipped to deal with ...

The CFPB recently announced it brought an enforcement action against Sprint and Verizon, alleging illegal “cramming” of hundreds of millions of dollars in unauthorized third party charges on customers’ mobile phone accounts. Under the terms of proposed consent orders, which are pending court approval, the pair will provide $120 million in consumer refunds, as well as pay $38 million in federal and state fines. The problem stemmed from the alleged failure on the part of Sprint and Verizon to properly monitor their outsourced processing of payments to third party vendors for digital purchases. “The lack of oversight by Sprint and Verizon allowed the vendors to have nearly unfettered access to consumers’ wireless accounts,” said the CFPB. “The billing systems for ...

CFPB Updates Mortgage Origination Examination Procedures to Reflect TRID. The CFPB has put out an updated version of its Supervision and Examination Manual’s Mortgage Origination examination procedures. The latest iteration features guidance on how its compliance examiners will examine loan disclosures and the terms of closed-end residential mortgages that are subject to the pending integrated disclosure rule under the Truth in Lending Act and the Real Estate Settlement Procedures Act. Of the manual’s eight modules, the updated TRID examination procedures are reflected in module #4. “Examiners should obtain and review a sample of complete loan files to assess the entity’s compliance,” states the new section of the manual. “If consumer complaints regarding mortgage origination and closing indicate potential violations of ...

CFPB May Review Lender-Paid MI. Pricing on lender-paid mortgage insurance policies has come down over the past several months, apparently spurring the CFPB to take a look at what’s going on behind the curtain. Citing industry officials who claim to have knowledge of the situation, Inside Mortgage Finance, an affiliated publication, reported late last week that the powerful consumer regulator may focus on whether there is some kind of quid pro quo going on between lenders and mortgage insurers. In particular, the CFPB is interested in the discounting of LPMI in exchange for a lender sending more of its MI business to an insurer and whether such a practice violates the Real Estate Settlement Procedures Act, the newsletter reported. In ...

Mortgage servicer Ocwen Financial, the target of a state enforcement action for allegedly mishandling distressed borrowers, said it would delay its regulatory 10-Q filing because of an impairment charge on Ginnie Mae servicing rights. The impairment was caused by a 50 basis point cut in the FHA’s annual mortgage insurance premium, which took effect in January, the servicer said. Although it had expected a $34.4 million profit in the first quarter of 2015, Ocwen took a $17.8 million impairment charge, which included monitoring costs, “strategic advisor expenses,” and fair-value adjustments. FHA lowered the annual MIP to enable more borrowers to obtain an FHA-insured single-family mortgage loan with a 3.5 percent downpayment. Ocwen would likely lose money if it sold off its government-backed MSRs, according to one servicing advisor. Last fall, Ocwen tried to sell its ...

Making mortgage payments is the most common type of mortgage complaint active servicemembers, veterans or their dependents report to the Consumer Financial Protection Bureau. A recent CFPB report on the top complaints received from military members and their families show that 24 percent were mortgage-related, second to debt collection, which accounted for the highest percentage of complaints received, 39 percent. An estimated 53 percent of servicemember complaints involved mortgage servicing related to loan modifications, collections and foreclosures. The report did not identify any specific loan, although it covered both conventional and government-backed mortgages. Complaints against servicers were mostly about failure to remove or amend derogatory credit reports accrued by servicemembers during the trial period, even though the servicemembers have successfully ...