Freedom Mortgage has been sanctioned by the Consumer Financial Protection Bureau for providing illegal incentives to real estate brokers and agents for mortgage loan referrals.
The CFPB says Freedom offered agents and brokers perks for past and future loan referrals, a violation of the Real Estate Settlement Procedures Act.
In at least forty cases, Freedom paid for marketing services that were never performed by the brokerages, which the CFPB says amounts to paying for referrals. RESPA particularly addresses illegal marketing service agreements, and the CFPB released detailed guidelines on their use in 2020.
Agents who worked with Freedom were also incentivized through paid subscription services offering important industry data, but they typically had to agree to be paired with a…
For borrowers in the rural South, getting a mortgage is tricky.
A new analysis from the Consumer Finance Protection Bureau found that consumers in hard-to-reach areas of the South have a tough time accessing credit. Southern rural consumers apply for mortgages at the same rate as consumers nationwide – 19 applications per 1,000 residents – but are more likely to be denied, with 27% of their applications shot down compared to 11% nationally.
They also pay higher rates than borrowers in other regions, averaging 3.51% in 2021 compared to 3.12% nationally.
The rural South does have high levels of poverty, which can translate to poor credit scores. Almost half of the country’s persistent poverty counties – where 20% of the…
Veros Real Estate Solutions, an enterprise risk management and collateral valuation services company, released new research that shows its Automated Valuation Model does not discriminate based on redlining.
Experts have recently sounded the alarm on bias in home appraisals. Studies have shown that homes occupied by Black Americans are consistently undervalued compared to similar homes with white owners.
Automated home appraisals are supposed to reduce the problem by removing human biases altogether, but concerns persist that the algorithm, fed human-produced data, can reproduce these problems. Further, they may be harder to spot because of the apparent objectivity of the technology.
The Consumer Financial Protection Bureau introduced a rule intended to safeguard homeowners against this issue earlier this month.
“While machines…
Officials at the Consumer Financial Protection Bureau have issued a reminder about zombie mortgages, saying threatening homeowners regarding uncollected time-barred debts violates the Fair Debt Collection Practices Act.
The guidance warns that it is illegal for debt collectors to threaten foreclosure on silent second mortgages with statutes of limitations that have expired.
“Some debt collectors, who sat silent for a decade, are now pursuing homeowners on zombie mortgages inflated with interest and fees,” said CFPB Director Rohit Chopra. “We are making clear that threatening to sue to collect on expired zombie mortgage debt is illegal.”
The CFPB points to “piggyback” mortgages in particular, also known as 80/20 loans. Homebuyers would be given a first lien loan for 80% of the…
By KIMBERLEY HAAS
Officials at the Consumer Financial Protection Bureau are warning shoppers about pay-to-play mortgage comparison shopping platforms.
CFPB Director Rohit Chopra said in a statement on Tuesday that given current mortgage interest rates, it is important for homebuyers to shop and compare loan offers.
“We are working to ensure that online platforms are not manipulating their search results in order to coerce kickbacks from lenders,” Chopra said.
Rates for a 30-year fixed-rate mortgage hovered just above 6% last week.
In a press release, CFPB officials said that American consumers looking for the best deal on mortgages often turn to comparison-shopping platforms and mobile apps.
“Many of the websites and applications claim to offer ranked lists of providers suitable…
Wells Fargo’s net earnings dropped in Q4 2022, pushed down by a settlement and the pressures of a shrinking economy. The bank announced that its net income fell to $2.86 billion, or 67 cents a share. This is half of its profits from the same time last year, which came in at $5.75 billion, $1.38 per share. Leaders at Wells Fargo noted that the decline was driven by the fall-off in mortgage demand. Its home lending was down 57% from Q4 2021. The bank announced this week that it is narrowing its home lending business, exiting the correspondent lending channel and shrinking its servicing portfolio. This move will force a round of layoffs, but it is unclear how many jobs…
Good Morning! Today is Monday, March 21. Wheat, corn, and barley are trapped in Russia and Ukraine, threatening a global food shortage. The Senate begins hearings today for Ketanji Brown Jackson, Biden’s Supreme Court nominee. A China Eastern Airlines flight carrying more than 130 people crashed in southern China. The Mortgage Note Reports Unfair Discrimination In Consumer Finance Targeted: The Consumer Financial Protection Bureau is targeting discrimination. Existing-Home Sales: Existing-home sales were down 7.2% from January to February and 2.4% from one year ago, NAR reported. Deephaven COO: Lisa Heitzmann has been appointed Chief Operating Officer at non-QM lender Deephaven Mortgage. And in other mortgage and housing news. Hispanic Homeownership: Last year was the best for Hispanic homeownership in the U.S. since 2008 by percent, but Hispanics are 81%…
Good Morning! Today is Thursday, December 9. British government members are under fire for a video showing them laughing about attending a party last year when group gatherings were prohibited. President Biden ordered government agencies to phase out gas-powered vehicles. New Zealand wants to ban all cigarette sales by raising the legal smoking age. And in mortgage and housing news… Webinar Hot Topics: Millennials keeping the market hot, racial bias affecting home appraisals, and automated valuation technology were discussed on Tuesday during a webinar designed to address what mortgage professionals should expect in 2022 and beyond. CFPB Finds Lending Violations: A CFPB report highlighted mortgage-related violations in 2021, including late fees charged to people in forbearance and discriminatory lending practices.…
Delinquency fees charged to forbearance-holders, payment handling violations, and pricing discrimination are among the mortgage-related violations highlighted by the Consumer Finance Protection Bureau’s (CFPB) latest Supervisory Highlights report. “Today’s report reveals that irresponsible or mismanaged firms harmed Americans during the COVID-19 pandemic,” said CFPB Director Rohit Chopra. “We will continue to supervise firms to halt harmful practices before they become widespread.” The report, which did not name particular companies, outlined illegal actions the CFPB claims to have observed in the first half of 2021. The CFPB supervises banks with assets of more than $10 billion and some non-banks, including mortgage companies, private student lenders, and payday lenders. The report called out mortgage lenders for the following: charging delinquency-related fees to…
The number of loans in forbearance stayed more or less the same as exits stalled mid-month, making up 1.9% of all active mortgages, according to Black Knight’s blog, Vision. November has hit a lull in its third week that mimics similar slowdowns in the last few months. Black Knight has characterized these declines as “expected.” The number of active forbearance plans rose 0.2% as activity hit its lowest level since mid-August. Plan volume rose by 5,000 for portfolio and PLS loans with small declines for FHA/VA (-2000) and GSEs (-1000). FHA/VAs saw an increase in new plans, pushing start volume to its highest level since October. Consumer Finance Protection Bureau (CFPB) head Rohit Chopra has zeroed in on foreclosures since…
