Late last week, the CFPB proposed amendments to Regulation B, the implementing regulation of the Equal Credit Opportunity Act, to give mortgage lenders greater flexibility in collecting information about consumer ethnicity and race. Reg B restricts lenders’ ability to ask consumers about their race, color, religion, national origin or gender, except in certain circumstances. These circumstances include required collection of the information for some mortgage applications under the regulation. Under the proposal, mortgage lenders would not have to maintain different practices depending on their loan volume or other characteristics, allowing more lenders to adopt application forms that include expanded requests for information about a consumer’s ethnicity and race, including the revised uniform residential loan application issued by government-sponsored enterprises Fannie ...

The new political landscape in Washington, DC, has intersected with the judicial movement on the PHH Corp. v. CFPB case to give the mortgage industry some hope that the bureau can be scaled back. But the task is complicated by the fact that the new administration is headed by a political novice, and by the fact that the industry itself is not particularly unified about what kind of changes should be made. During a recent webinar sponsored by Inside Mortgage Finance, three top industry attorneys discussed some of the prospects for change on three separate fronts of the federal government: the executive branch, the legislative branch and the judicial branch. If there’s a single theme or take-away from the event,...

With the topic of regulatory reform experiencing a resurgence of attention since the Trump administration moved into the White House, the U.S. mortgage insurance industry is calling for greater uniformity when it comes to the nitty gritty details of the ability-to-repay rule and its qualified-mortgage standard. One area of particular concern for mortgage insurers is the differences between the CFPB’s QM rule for conventional mortgages and the Department of Housing and Urban Development’s QM rule for FHA-insured mortgages. These differences include different debt-to-income caps, different formulae to calculate points and fees, and different standards for higher-cost mortgages. According to U.S. Mortgage Insurers, these differences incentivize greater reliance on programs of the U.S. government, increasing risk to taxpayers. “While consistency and ...

In a recent letter to CFPB Director Richard Cordray, Rep. Emanuel Cleaver, D-MO, called upon the bureau to address potential abuses by financial technology companies that may be engaged in predatory small-business lending. In so doing, he asked that the CFPB “investigate whether fintech companies engaged in small business lending are complying with all anti-discrimination laws, including the Equal Credit Opportunity Act.” The congressman’s letter noted that fintech lending companies, also known as alternative small-business lenders, are a fast-growing industry offering a new wave of innovation, but they also pose many risks, he added. “Over the past decade, there’s been a very large increase of Silicon Valley start-ups and technology companies that are functioning like banks,” Cleaver said. “The CFPB ...

A request from two consumers for changes to the Telephone Consumer Protection Act would interfere with mortgage origination and servicing operations, according to the Consumer Mortgage Coalition. The CMC submitted a comment letter to the Federal Communications Commission late last week in response to a petition submitted to the FCC in January. The petition called for the FCC to re-write parts of the TCPA and require express consent to be in writing from consumers regarding certain communications from companies, including mortgage lenders and servicers. The petition would define express consent as not being provided even when a person to be called knowingly provides a phone number to a lender on a loan application. Anne Canfield, executive director of the CMC, said...

The Trump administration has subtly signaled its support for PHH Corp. in the mortgage lender’s long-running dispute with the CFPB over alleged violations of the Real Estate Settlement Procedures Act. In recent days, the Department of Justice asked the U.S. Court of Appeals for the District of Columbia Circuit for permission to file an amicus brief in the case by March 17, one week after the deadline the court had given PHH to file its response to the court’s decision to grant the CFPB’s request for an en banc rehearing.The court has since granted the administration’s request for the one-week extension. In its request, the Justice Department said, “As this court recognized in calling for the views of the ...

The attorneys general of 15 states came to the defense of PHH Corp. and related parties in their case with the CFPB over the agency’s interpretation and enforcement of the Real Estate Settlement Procedures Act.The AGs of Alabama, Arizona, Arkansas, Georgia, Idaho, Indiana, Kansas, Louisiana, Missouri, Nevada, Oklahoma, South Dakota, Texas, West Virginia and Wisconsin focused on the constitutional issues in the case, with not a single mention of the statutory questions related to the act. The AGs made three major arguments in support of PHH’s position. First, they asserted that the separation of powers plays a critical role in preserving the division of authority within the federal system, and the CFPB’s governance structure violates the separation of powers ...

PHH Corp. and related parties again made a full defense of their position in their legal struggle with the CFPB over alleged misconduct under the Real Estate Settlement Procedures Act. PHH made five primary arguments to the U.S. District Court of Appeals for the District of Columbia Circuit, the first of which was that the CFPB is unconstitutionally structured and must be invalidated. …

The years-long legal battle that PHH Mortgage and PHH Corp. have been waging with the CFPB continues to take sudden and unexpected turns. One recent example: PHH filed a brief in opposition to the plaintiffs in State National Bank of Big Spring, Texas, et al. v. Lew from intervening in the mortgage lender’s case with the CFPB. …

With legal briefs continuing to be filed in PHH Corp. v. CFPB, mortgage experts on the Real Estate Settlement Procedures Act see a bit of a silver lining, along with multiple warnings, in the handful of consent orders the CFPB brought against other industry defendants on the RESPA front. Earlier this year, the CFPB brought a $3.5 million enforcement action against Prospect Mortgage, accusing the firm of illegal kickbacks for mortgage business referrals from two real estate brokers, and in an unusual twist, a mortgage servicing operation. The bureau also acted against ReMax Gold Coast and Keller Williams Mid-Willamette, the brokers, and Planet Home Lending, the mortgage servicer – all of whom it accused of taking illegal kickbacks. During an exclusive ...