The complaints that consumers filed with the CFPB about various aspects of their mortgages generally rose in the second quarter, as the mortgage market churned out new originations at elevated levels, a new analysis by Inside the CFPB found. Total consumer gripes rose 7.5 percent from the first quarter of 2015 to the second, the latest data from the bureau’s consumer complaint database show. The increase was largely driven by a surge of criticisms about the mortgage loan application and origination process, which climbed 11.8 percent during the period. Grumbling about loan modifications also increased during the period ending June 30, up 5.7 percent, a much higher rate of increase than the recent upward tick seen in default rates. Grievances ...

The CFPB recently launched the first in a new series of monthly reports to highlight key trends from consumer complaints submitted to the bureau, including data on company performance, complaint volume, state and local information, and product trends. The first installment in the series focuses on debt-collection complaints and complaints from consumers in Milwaukee. The bureau said it expects companies to respond to complaints within 15 days and to describe the steps they have taken or plan to take to resolve the complaint. “The CFPB expects companies to close all but the most complicated complaints within 60 days,” it said. “Complaints inform the bureau’s work and help to identify issues in the market, which feed into the bureau’s supervision and ...

The Department of Veterans Affairs’ Home Loan Guaranty program is planning to expand its quality-control process to help VA lenders improve the origination process. The goal is to make the VA program, which has seen a sharp spike in lending, work better for servicemembers and veterans, according to Michael Frueh, director of the VA home-loan guaranty program, during a recent panel discussion of government-backed mortgage insurance programs hosted by the Urban Institute. There are still obstacles to overcome, however, Frueh said. Delayed appraisals are a top complaint among VA lenders, who have to contend with the long wait to get VA appraisals back from appraisal management companies or appraisers. Lenders say that, in some of the hot real estate areas in the country, they have seen a number of contracts extended because appraisals were ...

Department of Housing and Urban Development program staff and the agency’s inspector general are reportedly at loggerheads over an IG recommendation to deny FHA insurance to loans that receive downpayment assistance from programs funded through premium-pricing mechanisms. Responding to critics, the HUD OIG is standing by its audit findings, which could force the HUD deputy secretary to intervene in order to resolve the issues raised by the audit report and restore lender confidence. The report’s recommendation has alarmed lenders that participate in downpayment assistance “gift” programs run by housing finance agencies (HFAs). This prompted Ed Golding, HUD’s principal deputy assistant secretary for housing and head of the FHA, to issue a clarification of the FHA’s position on the issue. Golding’s note reaffirmed FHA’s support for certain downpayment assistance programs (DAPs), “like those run by ...

The Department of Housing and Urban Development’s proposal to remove a key disclosure in a standard HUD/VA form that comes with a residential mortgage closing document is getting flak from the mortgage industry and from some members of Congress. Leading Democrats on the Senate Banking and House Financial Services committees are pushing HUD to reconsider the proposal. They fear the proposed change would make it easier for lenders that have engaged in criminal behavior to re-enter the FHA and VA markets and continue their illegal lending practices. Among other things, HUD’s proposal would eliminate the requirement that FHA lenders certify on each loan application that they are not, or have not recently been, subject to certain charges or penalties. In their letter, Senators Sherrod Brown, D-OH, and Elizabeth Warren, D-MA, and Rep. Maxine Waters, D-CA, urged HUD to ...

A multi-million dollar false claim lawsuit filed by the Department of Justice against Wells Fargo in 2012 appears headed to trial unless both sides agree to renegotiate a settlement. Brought under the federal False Claims Act, the lawsuit has moved on to the discovery phase of the litigation following a failed attempt by the parties to reach a settlement. The DOJ has wielded the FCA effectively in the past couple of years in efforts to recover losses from lenders that allegedly committed loan fraud against the FHA. A string of FCA lawsuits against FHA lenders has resulted in approximately $4.5 billion in recoveries for the government. The 2012 lawsuit alleged that Wells Fargo misled the FHA as to the quality of underwriting on 6,320 FHA-insured loans, which later caused approximately $190 million in losses to the agency’s mortgage insurance fund. Wells Fargo has denied the allegations and maintains that, as a ...

The Federal Home Loan Bank Mortgage Partnership Finance program has announced its first security issuance with a Ginnie Mae guarantee. The $5 million security is backed by home loans originated by community banks and credit unions through the MPF Government MBS product. The Mortgage Bankers Association welcomed the new MBS, seeing it as another opportunity for all lenders to access the capital markets directly, reducing costs and increasing originations. “Many community banks use the FHLB MPF program to sell conventional mortgages into the secondary market,” observed Ron Haynie, senior vice president at the Independent Community Bankers of America. “This expansion in aggregating and securitizing government loans provides community banks with the opportunity to reach more borrowers, especially in rural and small-town markets, and to safely sell those loans to ...

Overall consumer complaints filed with the CFPB remained generally flat in the second quarter and year-over-year as of the six-month mark. But gripes about consumer loan related issues leapt 64.6 percent YOY, despite a 9.8 percent drop in the second quarter, according to the latest analysis by Inside the CFPB. The money transfer sector also showed a poor performance over both time periods tracked by Inside the CFPB, as consumer grumbling rose 18.7 percent YOY and 23.6 percent MOM. Complaints about credit cards also were up, but not as much: 12.9 percent as of the six-month period vis-à-vis last year, and a slight 2.3 percent during the second quarter of 2015. But the residential mortgage sector again did quite well ...

The CFPB, much to the lending industry’s consternation, last week “went live” with the online publishing of more than 7,700 consumer complaint narratives addressing mortgages, bank accounts, credit cards, debt collection and other issues. Under its new final policy statement, the bureau is extending its existing practice of disclosing data on consumer complaints “to include narratives for which opt-in consumer consent is obtained and a robust personal information scrubbing standard and methodology has been applied.” The purposes of the database include providing consumers with timely and understandable information about financial products and services, and improving the functioning, transparency and efficiency of markets for such products and services. The CFPB said that adding additional information to the database, and hearing narratives ...

The complaints that consumers submitted to the CFPB about their bank accounts fell substantially, quarter to quarter and year over year, the latest analysis by Inside the CFPB reveals. Among all companies, consumer gripes were down 19.1 percent in the first quarter versus the fourth quarter, and off 13.7 percent from the same period the year before. Not surprisingly, a similar trend was obvious among the top three lenders. For instance, Wells Fargo saw consumer criticisms fall 11.1 percent QoQ and 28.4 percent YoY. For Bank of America, the drop-offs were 21.3 percent and 22.2 percent, respectively. JPMorgan Chase had declines of 11.3 percent on a quarterly basis and 16.3 percent on a yearly basis, while fourth-ranked U.S. Bancorp had ...