Almost every week it seems like a lender launches a digital mortgage process allowing for loan applications to be received and processed online effortlessly and efficiently. However, according to a recent survey of lenders, a number of barriers stand in the way of digital mortgages. Lenders cited various technology issues, costs and difficulties getting loan officers to change behavior as barriers to digitizing the mortgage process. Some 73 lenders participated in the survey administered by the Strategic Mortgage Finance Group earlier this year. The top barrier to digital mortgage offerings was...

False Claims Act enforcement against FHA lenders appears to have slowed with no new cases being filed by the Department of Justice or referred by the Department of Housing and Urban Development’s inspector general for nearly a year. Neither agency has gone after any lender for alleged False Claims Act violations since May of last year when the Department of Justice intervened in an FCA case brought by a whistleblower against Guild Mortgage, an FHA direct endorsement lender. The complaint alleged that San Diego-based Guild Mortgage knowingly approved loans that violated FHA rules while falsely certifying compliance with those rules. The alleged violations occurred between 2006 and 2011, resulting in “tens of millions of dollars” in losses to HUD. The case is pending in federal district court in Washington, DC. Indications are the FCA cases involving FHA lenders have ...

CFPB Director Richard Cordray, in an unusual move, attended the weekly caucus meeting of the Democrats in the House of Representatives last week. That prompted his chief GOP antagonist, House Financial Services Committee Chairman Jeb Hensarling of Texas, to say Cordray’s appearance shows that Democrats use the CFPB as a political war machine. “Everyone knows Mr. Cordray will likely leave the CFPB soon and pursue political office in Ohio again, but his attendance at what amounts to nothing more than a Democrat pep rally shows just how partisan and politicized he and his supposed ‘independent’ agency truly are,” the Republican said. According to Hensarling, liberal elites in Washington, DC, want to keep the bureau unaccountable to the American people so ...

As a vote by the full House of Representatives nears on H.R. 10, the Financial CHOICE Act, dozens of law professors from around the country wrote congressional leadership to oppose provisions of the bill that would gut the CFPB. In their letter, the legal academics took particular issue with Title VII of the legislation, which would subject the CFPB to the regular congressional appropriations process and eliminate the bureau’s rulemaking, supervisory and enforcement authority (including that over unfair, deceptive or abusive acts or practices, or UDAAP). “Title VII of H.R. 10 seeks to kill the CFPB by a thousand cuts,” the professors said. “Historically, Congress has accorded all federal bank regulators independence to insulate their decisions from industry and political ...

The Financial Services Roundtable advised the Trump administration that the structure of the CFPB needs to be changed, and that the agency should revise a handful of its key mortgage rulemakings, most notably the ability-to-repay/qualified mortgage rule, the Home Mortgage Disclosure Act rule and the Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure rule, or TRID. The FSR’s call came in a detailed response to President Trump’s Executive Order 13777, “Reducing Regulation and Controlling Regulatory Costs,” issued earlier this year, directing the Treasury Department to conduct an assessment of financial regulations to evaluate how they align with the White House’s core principles of financial regulation.In terms of the bureau itself, the industry organization said the governance structure ...

The Consumer Mortgage Coalition and the Mortgage Servicers Working Group asked the CFPB for guidance on how to comply with bankruptcy-related provisions when a confirmed successor-in-interest, who is not legally a borrower, has filed a bankruptcy petition. Under Regulations X and Z, these successors will be considered borrowers. Their inquiry came in response to the bureau’s request for comment on its plan to assess its 2013 mortgage servicing rules. One question the industry representatives had is whether the Fair Debt Collection Practices Act applies to the mortgage servicing rule’s early intervention requirements.They note that Section 1024.39(c) of Reg X provides some exemption from early intervention written notices if any borrower on the loan sends an FDCPA cease-communication notice “with ...

The CFPB has stepped back into the Real Estate Settlement Procedures Act enforcement ring by probing Zillow over issues related to co-marketing. The probe of the company’s co-marketing initiative was disclosed to the public earlier this month by Zillow CFO Kathleen Philips during the company’s first quarter earnings conference call with investors. “Over the past two years, the CFPB has been reviewing our program for compliance with RESPA,” Philips said. “Recently, the CFPB requested additional information and documents from us as part of their evaluation, which we are working with them on,” she added. “We believe our co-marketing program has, and continues to, allow agents and lenders to comply with the law while using our product.” This could be another ...

The CFPB and the Department of Justice have separately filed motions opposing a proposal from a handful of state attorneys general to take $15.14 million of unused settlement funds from the bureau’s $50 million enforcement action against Sprint and instead redirect it to two other purposes. The AGs of Connecticut, Indiana, Kansas and Vermont recently proposed taking $14.0 million of the unused money from the U.S. Treasury, which could receive it under the terms of the redress plan, and instead giving it to the National Association of Attorneys General to establish a National Attorneys General Training and Research Institute Center for Consumer Protection. The AGs also want to repurpose the remaining unspent amount, $1.14 million, and give it to a ...

In response to President Trump’s recent executive orders on regulatory reform, the Department of Housing and Urban Development announced it is looking for industry feedback on any of its existing regulations that might be outdated, ineffective or excessively burdensome. As required by Executive Order 13777, “Reducing Regulation and Controlling Regulatory Costs,” HUD said it is in the process of establishing a regulatory task force charged with identifying agency regulations that should be repealed, replaced or modified. As part of that review, the agency is inviting the public to weigh in on the adequacy and relevancy of its current regulatory framework. “HUD’s goal in conducting the review is to make the department’s regulations more effective and less burdensome in achieving HUD’s ...

Financial Freedom, an Austin, TX-based servicer, agreed to an $89 million settlement with the U.S. Department of Justice to settle allegations that it violated the False Claims Act, the Financial Institutions Reform, Recovery, and Enforcement Act, and FHA servicing requirements in connection with its participation in FHA’s Home Equity Conversion Mortgages, or “reverse mortgage,” program. The Justice Department alleged that Financial Freedom sought to obtain insurance payments for interest from FHA “despite failing to properly disclose on the insurance claim forms it filed with the agency that the mortgagee was not eligible for such interest payments because it had failed to meet various deadlines relating to appraisal of the property, submission of claims to the Department of Housing and Urban ...