The Consumer Financial Protection Bureau is taking aim at mortgage “junk fees” yet again, this time in the servicing sector.
The bureau released supervisory highlights addressing what it classifies as illegal junk fees, such as prohibited fees, deceptive notices sent to homeowners, and violations of loss mitigation rules.
“Homeowners cannot just simply switch providers if their mortgage servicer charges them illegal junk fees,” said CFPB Director Rohit Chopra.
“Since mortgage borrowers are captive to a company they never chose to do business with, we are working hard to detect and deter violations of law.”
Servicers were found to have charged property inspection fees banned by Fannie Mae and late fees greater than allowed by their mortgage agreements. They also failed…
By SCOTT OLSON
This week, the Consumer Financial Protection Bureau fined Bank of America $12 million for reporting false mortgage data. CFPB’s Press Release on the action stated that BofA “Loan officers routinely falsified forms about mortgage applicants.”
In response to this action, the Community Home Lenders of America issued a statement renewing its longstanding call for all mortgage loan originators to be licensed. Despite the fact that Section 1402(a)(2) of the Dodd-Frank statute requires that all mortgage loan originators must be “qualified,” the CFPB still does not require loan originators at banks to meet any of the SAFE Act requirements that apply to all non-bank mortgage loan originators.
Why is this relevant to the BofA action? The CFPB press…
By KIMBERLEY HAAS
The second largest bank in the country will pay a $12 million penalty after it was found that hundreds of loan officers falsified forms about mortgage applicants in violation of federal law.
Officials at the Consumer Financial Protection Bureau say that for at least four years, loan officers at Bank of America did not ask mortgage applicants required demographic questions and then falsely reported that the applicants chose not to respond.
They say this violates the Home Mortgage Disclosure Act, enacted in 1975, which requires mortgage lenders to report information about loan applications and originations to the CFPB and other federal regulators. Data collected under the act is used to monitor whether financial institutions serve their communities’…
By KIMBERLEY HAAS
The director of the Consumer Financial Protection Bureau says it’s time to take big bank bailouts off the table.
Rohit Chopra shared his candid opinions on the subject during the Mortgage Bankers Association’s annual convention and expo last week during an on-stage conversation with MBA President and CEO Bob Broeksmit.
Chopra said although the financial system is dependent on the banking system operating day-to-day without interruption, he doesn’t think the public should be on the hook for bailing banks out when they get into trouble.
“Banks, especially big banks, get a lot of benefits from the public. Big subsidies, direct and indirect, and I don’t think the public should be on the hook for bailing them out…
By Taylor Stork, President CHLA and EVP, COO Developer’s Mortgage Company and Kelly Welch, Executive Vice President, Equity Resources, Inc.
When a consumer goes into the market to obtain a mortgage loan, they enjoy consumer protections that are arguably more extensive and specific than any other financial product.
A few examples: TRID requirements for disclosures which hold lenders to early fee estimates, RESPA prohibitions against charging for services not provided, and LO Comp prohibitions on loan originators steering loans or varying their fee based on how much they think the borrower would pay.
The same is true for the servicing of mortgage loans. Servicers must follow detailed rules, and for the two-thirds of loans that are “federal agency loans” (FHA,…
By KIMBERLEY HAAS
The president and CEO of the Mortgage Bankers Association said they are pushing for clarity and common sense as he criticized policymakers this week during his remarks at the Secondary and Capital Markets Conference and Expo in New York City.
Bob Broeksmit said policymakers plan to pile on more enforcement and red tape at a time when MBA member businesses are struggling.
“There seems to be a sense, at the highest levels of government, that the mortgage industry needs to be reined in,” Broeksmit said, according to his prepared remarks.
Broeksmit referred to the recent failures of Silicon Valley Bank, Signature Bank, and First Republic Bank saying some policymakers are now pushing for new rules that could…
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…
By KIMBERLEY HAAS A new automated valuation model that recently hit the market uses a national property database, geospatial comparable data, and artificial intelligence to help users evaluate properties. Altisource, founded in 2009, is a provider of services and technology for the mortgage and real estate marketplaces. Their NestRange AVM helps with valuations for originations and defaults. The original AVM model was built as an in-house tool, according to Chief Strategy Officer and CTO Israel Meir. “Early last year, we felt that we were at a pretty good place to package this up and offer it as a commercial system in addition to continuing to use it internally,” Meir said in a recent interview with The Mortgage Note. NestRange was…
By TMN Editor The Consumer Financial Protection Bureau wants the public to weigh in on ways to improve the mortgage process for homeowners who would benefit from refinancing. They are especially looking for borrowers with smaller loan balances. CFPB Director Rohit Chopra said in a statement that the mortgage market has not provided products that allow all households to save money by refinancing at a lower interest rate. “We are eager for input on ways that borrowers taking out loans today can refinance to lower rates in the future,” Chopra said. According to a press release, the agency is also looking for input on automatic short-term and long-term loss mitigation assistance for homeowners who experience financial disruptions. For more information,…
By KIMBERLEY HAAS Officials at the Consumer Financial Protection Bureau are cracking down on a mortgage company that allegedly discriminated against minority families and a bank that is accused of pressuring employees into unlawfully accessing the credit reports of customers. With the aid of the U.S. Department of Justice, CFPB officials took action to end Trident Mortgage Company’s alleged discrimination against families in minority neighborhoods in the greater Philadelphia area. It is alleged that Trident violated the Equal Credit Opportunity Act and the Consumer Financial Protection Act. DOJ officials also claim Trident violated the Fair Housing Act. In Philadelphia neighborhoods that were more than 80% minority, more than half of the applications Trident generated were from white applicants, according to…
