Two of the nation’s top originators of nonprime and nontraditional mortgage products said their current consumer disclosure strategies are working, although one of the companies said it would support additional disclosures in Regulation Z if regulators decide that additional disclosures are warranted for such products. Countrywide Financial Corp. and Wells Fargo & Co. said they are already providing sufficient information to interest-only and option ARM borrowers and see no need to make more disclosures. However... Read More

What would the legislative prospects be for the mortgage banking industry under a House Financial Services Committee run by Rep. Barney Frank, D-MA, the ranking minority member on the panel? The answer is a big question mark for the Mortgage Bankers Association as lenders listened uneasily to Frank’s remarks during the trade group’s Legal Issues and Regulatory Compliance conference in Washington, DC, last week. A top industry official crystallized the general uneasiness... Read More

The share of higher priced mortgage loans reported by lenders in 2005 jumped nearly 70 percent from 2004 levels, propelled by interest-rate changes and a flattened yield curve over most of last year, according to the Federal Reserve Board’s analysis of the latest Home Mortgage Disclosure Act data. The Fed analysis found that 26.2 percent of all loans reported under HMDA qualified as rate-spread loans in 2005. This was up from the 15.5 percent rate of higher priced loans reported in 2004. The incidence of rate-spread loans... Read More

The Federal Trade Commission will soon complete a comprehensive study of mortgage lending disclosures, which will serve as a basis for future agency initiatives to make consumer disclosures more effective. Peggy Twohig, associate director of financial practices at the FTC, said the draft study conducted by the agency’s Bureau of Economics looks at how consumers search for and choose mortgages, as well as how they understand the information they obtain about their mortgages. The study also explores whether enhanced disclosures... Read More

As federal regulators continue working on settlement service reform, regulatory enforcement of the Real Estate Settlement Procedures Act continues at an urgent pace. On Sept. 6, the Department of Housing and Urban Development and the Federal Deposit Insurance Corp. announced separate settlements with a Boston attorney and real-estate appraisal company for alleged violation of RESPA’s anti-kickback provision. This developed as a top HUD official at the Mortgage Bankers Association’s Legal Issues conference in... Read More

The Supreme Court of the United States is expected to decide this fall whether to let stand an agency’s statutory interpretation that federal preemption of state consumer protection laws applies not only to national banks but to their operating subsidiaries as well. A decision by the high court will bring clarity to a gray area of federal preemption in which courts have given way to the Office of the Comptroller of the Currency’s controversial reading of the National Bank Act as regards to its exclusive authority to regulate... Read More

The Office of Thrift Supervision is considering suggestions made by industry and community groups to amend its Community Reinvestment Act regulations so they are consistent once again with those of federal thrift and banking regulators. For the first time since breaking away last year from other federal regulators as a result of disagreement over certain proposed CRA changes, the OTS signaled the possibility of uniform interagency CRA rules. The agency provided the opening in last week’s issuance of finalized questions... Read More

California. Legislation establishing stronger protections for elderly reverse-mortgage borrowers has been sent to Gov. Arnold Schwarzenegger for signature. Authored by state Sen. Joe Simitian, D-Palo Alto, the bill would protect the mostly elderly reverse-mortgage borrowers who are cash-strapped but have substantial equities in their houses. A reverse mortgage is a loan against the borrower’s home. It requires no payment for as long as the borrower is alive and occupies the property. Under existing state law... Read More

Federal Deposit Insurance Corp. Protecting Exam Data. The FDIC has updated procedures to remind its examination staff of the need to protect information gathered from regulatory exams, whether in paper, electronic or other form. The procedures cover all data acquired or created in connection with a bank exam, including the exam report, work papers, bank information, and sensitive customer information. The latest procedures require technical, physical and administrative safeguards. It also provides guidance for responding... Read More

The credit freeze provision of H.R. 3997, the “Financial Data Protection Act of 2006,” is still in the bill and was not stripped as reported previously. It has been modified, though, to restrict credit-freeze requests only to persons who are actually victims of identity theft. The freeze prohibits a consumer reporting agency from releasing all or any part of the credit report without the consent of the consumer. A security freeze may be placed by submitting a written request to the consumer reporting agency... Read More