As affordability sank in 2022, potential buyers struggled against rising fees and were denied loans for a lack of income, according to a new analysis from the Consumer Financial Protection Bureau.
Mortgage applications and originations declined last year as the market corrected from the low-rate-fueled pandemic housing boom. At the same time, affordability sunk to new lows, fees rose more than 20% YOY, and borrowers faced rising monthly costs.
“The higher interest rate environment had profound effects on the mortgage market in 2022, with borrowers paying much more in monthly payments,” CFPB Director Rohit Chopra said. “These trends are likely to continue given further increases in interest rates in 2023.”
Today, the national median payment applied for by purchase applicants…
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…
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…
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 taking action against a California-based mortgage lender that allegedly sent misleading advertisements to military families.
According to a press release, RMK Financial Corporation falsely represented that the company was affiliated with the Department of Veterans Affairs and the Federal Housing Administration.
RMK Financial does business as Majestic Home Loan and is licensed as a mortgage broker or lender in at least 29 states. Officials say that although the company originated loans guaranteed by the VA and mortgages insured by the FHA, they are not affiliated with these agencies.
Officials warned RMK about misleading consumers in 2015 but say the company engaged in a series of repeat offenses, leading to…
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 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 The Consumer Financial Protection Bureau is targeting discrimination and officials there plan to closely examine financial institutions’ decision-making practices to ensure companies are appropriately testing for and eliminating potential harm to customers. On Wednesday, an updated exam manual was published for evaluating unfair, deceptive, and abusive acts or practices. Officials said in a press release that discrimination can occur in cases where the conduct may be covered by the Equal Credit Opportunity Act – a fair lending law that covers extensions of credit – as well as instances where it does not. The example of being denied a checking account due to race was used as an example of a discriminatory practice. “When a person is denied…
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…
